My introduction to life in Japan started in 2008 when I began studying at a Japanese language school on a student visa. Immediately following this, I worked some 21,434 odd part-time jobs, founded a sole proprietorship—a limited liability company—and then finally, in 2011, I incorporated my first business in Japan with Go! Go! Nihon. Due to my experience and background, I am constantly being asked about the process of how to open a business in Japan, I am always happy to share what I have learned along the way. Particularly, I’ve found there are a lot of common misconceptions out there. I wonder who started spreading all this misinformation!
1. You need Japanese staff
So many times I heard that you need to have Japanese staff to open a business in Japan, even I started to believe it was true. Having Japanese staff is not mandatory. Neither is having any staff at the beginning. You can start a company and still get a type of long-term working visa called the business manager visa (投資ビザ) without having any employees. That being said, having a Japanese person working with you, especially if your Japanese is not at a JLPT N1 or N2 level, is definitely recommended.
2. You need to pay 50,000 dollars for a visa
Another misconception about how to open a business in Japan is that you need to pay for a visa. First of all, if you do not need a business manager visa because you have another type of visa (spouse, descendent, working), you can open a company at little cost. However, even if you need a business manager visa, you are required only to “invest” (not pay) 5,000,000 JPY, which at the current exchange rate is less than 50,000 USD. The word “invest” means that 5,000,000 JPY must come from abroad into your Japanese bank account so that the Japanese government can see you are bringing in foreign capital. This money can be used to pay for office rental fees, employee salaries, or whatever else you may need, money that you will need to run your business in the first place.
The Japanese government in combination with the Ministry of Economy, Trade and Industry has made it easier to open a business in Japan in specific municipalities by offering start-up visas for entrepreneurs. Start-up visas range from six months to a year and applicants do not need an overly high bank balance to begin with. But it’s good to keep in mind that after the period of the start-up visa has ended, you still need to transition to a business manager or other type of visa. Each specific municipality has different requirements and restrictions for their start-up visas, but in general, expect to provide a recent resume, passport photocopy, new business implementation application and plan, proof of accommodation in Japan, as well as a recent bank statement. You can find the requirements for start-up visas on the dedicated municipality or city website such as the one for Shibuya City.
For a general breakdown of the cost when planning to open a business in Japan, the Japan External Trade Organization (JETRO) has created a model case for Tokyo, which can be viewed here.
3. You need to be Japanese or have a Japanese partner
I am not Japanese, and I did not have a Japanese partner in 2011 when I founded Go! Go! Nihon. I have heard this many times, but it is absolutely untrue. You can start and open a business in Japan as a foreign national and obtain a visa without being married to a Japanese partner.
However, foreign nationals who are married to a Japanese partner and have obtained a spousal visa can start a business in Japan without needing to apply for or transfer to a start-up visa or business manager visa.
4. You need to be a Japanese resident
Not if you don’t want to be. The owner of the company does not have to be a Japanese resident.
5. It’s easy, you can do it by yourself
I am sorry to ruin the hype I was building up to this point! If you plan to open a business in Japan, it is not easy! I have personally founded companies in Europe and other parts of Asia, and I have found that Japan is particularly difficult because:
The bureaucracy is all in Japanese
Unlike other Asian countries such as Singapore and Hong Kong where the paperwork is in English, in Japan, you need to have mastered the language in order to do everything on your own. Even for people with an N1 level of Japanese, it could still be extremely hard for you to navigate.
Japanese corporate banking sucks
Sorry for the lack of finesse, but as a business owner, this has been one of the most stressful aspects for me. While personal banking in Japan has improved over the years, corporate banking usability is like something out of the Flintstones (for the younger crowd, that means it belongs in the Stone Age). I hope someone from Mitsubishi UFJ, Mizuho, or Mitsui Sumitomo—the 3 biggest banks in Japan with which I have the pleasure of doing corporate banking—reads this. For example, Mitsubishi UFJ still does not support Mac devices. I do not mean there are a few bugs, but you literally cannot log in at all unless you are using a Windows machine. The user interface is also very hard to use and can slow down business a lot.
Understanding business culture in Japan takes a long time
It is a completely different game compared to what you are probably used to in your country. So even if you were successful with a product that works in your country, it does not mean that it will do the same in Japan. The list of companies failing in Japan is huge. Japanese people like local brands, and you need to tailor every single aspect of your business to the Japanese market, starting with your message and website. It’s good to have a general understanding of Japanese business culture before setting up shop in the country.
The language barrier
As I mentioned, running a business in Japan requires a high level of Japanese. You need to sign telephone contracts, put in security cameras, get supplies— and you will have to pay twice the rate if you want a service that supports you in English. Even if you plan to hire Japanese staff, if you are committed to Japan, I strongly suggest learning the language for at least 6 months by enrolling in an online course or even studying Japanese at a language school.
Plan a future in Japan with Go! Go! Nihon
If your dream is to one day open a business in Japan, get started by contacting us and we will work together to help you on the path to your goals. Go! Go! Nihon offers support in choosing online courses, taking short-term study trips, finding the perfect language school, vocational school, or university, and even accommodation while you study in Japan.
