Setting up a side business in Japan

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Photo being taken on a phone of a drink.

Have you ever considered creating a side business in Japan? Or maybe opening up an online store? Perhaps you have a creative-side and love doing painting, knitting, crafts or photography, or maybe you have another skill such as translation or web-designer. 

Setting up a side business in Japan is not as hard as you may think, and can be a great way to earn some extra income while studying. 

Read on to learn more about this below!

Before you start

The first thing we need to mention is we are not experts in this particular subject matter and the information in this article is subject to change. If you are serious about setting up an online or side business in Japan, we always recommend getting the latest information from an immigration lawyer or the immigration bureau of Japan.

In order to get started, you need to apply for permission to open up a side business from your local immigration bureau in Japan. This is not required for Japanese nationals, spouses of Japanese nationals, and people on a permanent resident visa.

For people on a student visa it’s important to keep in mind that you must have applied for permission to work part-time in Japan, and you can only work for 28 hours a week. For more information on freelancing as a student, see our article here.

For people on other work visas, opening up a side business in Japan is possible but if the product/service you are selling isn’t included in the scope of your visa, you need to apply for “Permission to engage in activity other than that permitted under the status of residence previously granted” (資格外活動の許可, shikakugaikatsudō no kyoka).

You also need to have a Japanese bank account. Read more on how to get one in our article here.

At the end of the year it’s important to know how to report your earnings and pay tax properly. Understanding tax obligations for different nationalities is extremely complicated and we are not experts in this matter. Therefore, we highly recommend consulting with an experienced accountant or lawyer to confirm your tax requirements. Some countries also have tax treaties with Japan which may override the usual tax obligations.

You can find more information about taxes in Japan from the National Tax Agency of Japan. 

Why set up a side business in Japan?

Japan is a booming market where, especially online shopping, is trending right now. This means that you have good chances to reach a large group of people with your products/services that you want to sell. It is also a great way to boost your resumé! Skills in, for example, SEO, digital marketing and market research are highly valued by many employers in the digital world we live in today.

Furthermore, it’s a great way to get active training on your Japanese. By engaging with customers in real-life situations you can be sure that your business Japanese and linguistic skills in general will improve.

We do recommend that you have at least an intermediate knowledge of the language, so you can explain what your products are and interact with customers and business partners in a polite way that reflects standard Japanese business culture.

Another reason why it’s great to open up a side business in Japan is because there are many easy-to-use online tools to help you sell your products and set up a SEO (search engine optimized) shop. 

Image of someone working at a laptop

Some recommended online platforms

If you want to sell products online there are multiple options in doing so, and it can be a great way to earn some extra income. Maybe you are a designer and want to spread your art? Here are some recommended platforms, and their benefits and disadvantages:

Base, a beginner-friendly service which has a low commission fee on the products you sell. However, it doesn’t have as large of a customer base as some of the other online stores.
Mercari, a flea-market app that has many users and is easy to use. It has a slightly expensive commission fee of 10%.
MercariShops is unlike the app, a service for you to set up a proper online shop. However, it also takes 10% of all your sales in commission.
Suzuri offers English support and lets you print your work on various items of your choice (such as t-shirts, cups). If you are a designer, this is great as it can generate a passive income while you do other activities such as studying Japanese.
Amazon is also a great way to sell your products online and they only take a commission of 100 yen per product. You can subscribe to their professional plan which is a good deal if you are selling a lot of products.

Another option of making some extra money online is to offer online classes in English or your native language. This can be either in-depth or just conversational – you decide the content! 

There are tons of Japanese people looking to improve their English speech, and many want to learn other languages as well. 

If this sounds interesting, one great platform for this kind of business is iTalki. This website allows you to tailor your own curriculum and set your own prices.

Don’t try and cheat the system

Whether you open up an online store, if you sell translation services, or offer outreach in English for Japanese companies, don’t step outside the parameters of your visa. This can jeopardize your stay in Japan and result in your visa being revoked. You have to apply for opening a side business and pay taxes for your secondary income.

This article is intended as a guide to give you some ideas on how you can earn some extra income from a side business in Japan, and you should always make sure to double-check the latest information with official sources.

That’s it for this time! Did you find the article helpful? Feel free to comment if you have experience opening a side business in Japan.

If you are interested in more Japanese culture or life in Japan, follow our blog!

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