Business Immigration for Japan

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Question Answered 18th January 2016

Question: 

I am looking to recruit a manager to oversee my distributor operations in  japan.  We do not want to set up a corporate entity if possible.

What are my options to enable this manager to obtain a visa and work within the law in Japan?

Answer: 

When a foreign company wishes to send an employee to Japan without having a hosting structure in Japan, it is firstly required to set up at least a representative office. To do this, there is no registration procedure required, but it is necessary to have a dedicated/physical office space. It is then possible to apply for the “Intra-Company Transferee” visa if the visa applicant has worked more than one year at the overseas company that is sending you to Japan.

If you haven’t worked long enough for your company to apply for the Intra-Company Transferee visa, you can still try to get other visa such as “Specialist in Humanities and International Services” or “Engineer”.
However a representative office doesn’t allow you to engage in the commercial activities in Japan, so you might like to consider setting up a branch office or a subsidiary depending on the company’s intended activities in Japan.

If the visa applicant becomes the Representative Director of a Japanese subsidiary, the appropriate visa status to ask for is “Investor / Business Manager” visa.

LIMITATIONS OF REPRESENTATIVE OFFICE

  • Opening Corporate Bank Account – Impossible
  • Social Security – Could be mandatory depending on cases
  • Employing Staff – Possible
  • Setting Up Costs  – Virtual office rental only
  • Capital  Required – None
  • Registration – Not required
  • Commercial Activities – Not Allowed

The Representative Office in Japan can not engage in sales or marketing activity. Basically it cannot be engaged in any “for profit” activity that would give raise to a tax liability in Japan. It is a light first step to establish a company  in Japan. Typical activities of a representative office are public relations, advertising, market intelligence and research and preparation to set up of a subsidiary.

How to create a Representative Office and have employees in Japan, pay them salaries, without creating a company?

The Representative Office needs to have a Representative resident of Japan.

In order to pay salaries to employees and give them the same benefits of Social Insurance and Pension as enjoyed by other regular company  employees the process if relatively strict and a lot of paper work is required by the Social Insurance Office:

The Representative Office needs to prove the reality of its existence by showing:

  • a lease for office space in its own name
  • a utility bill in the Representative Office name
  • a copy of the  contract between the representative and the foreign company

The Representative of the Representative Office also needs to prove its good standing with Social Insurance, Tax and Legal authorities by providing documents such as:

  • registration with the local ward office “Juminhyo”
  • registration with Social Insurance, typically a copy of Pension Book is needed.
  • proof of payment of resident tax and national tax and also individual enterprise tax if she/he was self employed.

The representative office also need to register with relevant tax office to report and pay the tax withheld on employees salary.