Okay, so you aim to launch your business in Japan. Several options exist, but being a sole proprietor has the advantage of being the quickest and least complicated.
However, becoming a single proprietor in Japan is filled with technical difficulties and language barriers.
The sole proprietor is responsible for all aspects of the business, including liabilities, losses, and business decisions.
Becoming a sole proprietor can be challenging. We have compiled a detailed yet simple-to-follow guide for you on becoming a sole proprietor in Japan.
What is Sole Proprietorship?
The sole proprietorship is the most basic business structure. You’ll have full ownership and responsibility for the company, allowing you to create the foundation for its future success.
Sole proprietorships in Japan are called kojin jigyo, meaning “personal business.” In contrast to a kaisha (company) or hojin (corporation), in which the business entity exists independently of its owners.
A sole proprietorship is a business form where a single individual is a business’s sole owner and operator. The sole proprietor is responsible for all aspects of the business, including liabilities, losses, and business decisions. He must also register their Business with the local government. This business form is popular among small and medium-sized businesses in Japan. It is relatively easy to set up and allows the owner to keep a greater share of the profits.
How to Become a Sole Proprietor
Sole Proprietorships (kojin jigyo), sometimes known as “one-man businesses,” are a better option for those who want to be the sole proprietors of their businesses.
It has many benefits over a corporation, including easier tax filing and the absence of the need for an accountant. However, even if you’re a solo owner, you can still hire employees and pay for your visa sponsorship.
Any individual may establish a Sole Proprietorship at any time with no initial investment. Even if one is currently employed (as a salaried employee), that person can still start a Sole Proprietorship to earn additional money, notwithstanding any restrictions by the present employer.
Which Type of Visa Must You Obtain?
In Japan, you need to hold either of the following to launch a company:
– Permanent residents status (永住者 – Eijusha
– Long term resident status (定住者 – Teijusha)
– “Spouse or Child of Japanese National” visa (配偶者 – Haigusha)
– “Spouse or Child of Permanent Resident” visa (永住者の配偶者等 – Eijusha no haigusha tou)
– “Investor / Business Manager” visa (投資家/経営者 – Toshi-keiei)
• Japan’s Ministry of Foreign Affairs (MOF): check for information on work and long-term stay visas in great detail.
• The Immigration Bureau of Japan: check for detailed information on all relevant immigration rules and regulations.
Permits You Need
A “Notification of Commencement of Business” ( – Kojin Jigyo no Kaihaigyo Todokedesho) must be filed within 30 days of a Sole Proprietorship’s establishment with the local tax office in the Ward or City where the Business is located.
The number and variety of licenses and authorizations you’ll have to secure will be determined by the kind of enterprise you’re setting up. As export-import trade companies, restaurants, and language schools make up most businesses run by foreign residents in Japan. Only permits relevant to these industries will be discussed further below.
Exporting & Importing: Check out the Japan Customs website.
School: Check out the Ministry of Education. A private, specialized language school, although an “Eikaiwa – ” or similar after-school program, only requires such approval.
Restaurant: Check out the Local Public Health Center. Suppose the restaurant will be open past 10:00 pm or serve alcoholic beverages, a license from the Public Safety Commission.
Post Office Registration
This is a necessary step for any business to operate legally. The Japanese government requires it. It proves that a business is properly registered and authorized to conduct business activities.
Registering with the Post Office allows your Business to obtain a unique identification number known as a “Jusho-In.” This number is necessary to open a business bank account, comply with tax laws, and receive government subsidies.
Sole Proprietor Tax
You must pay the “kojin jigyo-zei” tax for sole proprietors.
Keep track of all business-related income, expenditures, bills, and receipts. You may need to provide references to these items when submitting your taxes. Check out the Japan National Tax Agency’s homepage for further info.
For more information on how to establish your Japanese Business, contact us!
"Otsumami" - a bite size snack:
A sole proprietorship is a business operated by a single individual.