Working as a nominee representative director to numerous Japanese company clients for over seven years, I have come across foreigners commit to the whole lengthy and complicated process of starting a business in Japan.
But without the right professional person or team to assist in the step by step procedural requirements, they end up wasting enormous time and effort than what’s optimally needed.
From my working experience, there are three tips you must consider implementing in order to increase your chances for market entry success.
1. Find the Right Professional Nominee Representative Director
This is a must.
A non-resident or even a foreign resident — a foreign person granted with a long-term residence status visa — who plans to establish a company, either a KK(business modeled after a stock company) or a GK(modeled after the LLC), is prompted to have a Japanese resident representative director.
It is still possible for a non-resident or a foreign resident to open a business company, however, this will prove problematic once the prerequisite of opening a corporate bank account is reached.
Opening a corporate bank account is not so straightforward. Japanese banks, especially the reputable ones namely SMBC, MUFG, and Mizuho, will insist in dealing with a Japanese resident representative director as the official person to open the corporate account.
2. Set your Nominee Representative Director as the Business Goalkeeper
A representative director merely acting as nominee — only in declaration but not in function — is impractical for a business operating in Japan. Japan takes compliance in very high regard. Failure to perform compliance-related activities such as filing the required documents or failing to meet its deadline can be raised as a major issue. As the business goalkeeper, the nominee representative director ensures the timely and complete compliance of background business duties outside of the core operations of the business. Examples of these duties are found in management of legal, tax, HR, and other formal and legal government transactions.
3. Outsource all background office operations
Do not try conducting background office operations internally. It is not sustainable to perform numerous filings by yourself or your staff. My best advice is to outsource these ancillary business duties to an experienced and capable team. They can basically keep track of each tasks unique specifications and stringent deadlines.
This applies best, for instance, in bank management. Considering the fact that current online banking systems are still primarily Japanese and the transition to integrating English and other languages is still far ahead in Japan’s priority list.
An all in one professional team adept in handling legal requirements such as HR, payroll, visa and business license, among other background responsibilities will give you the confidence to perform your core business activities with laser focus.
Time is money, so your chief objective is to develop revenue-generating activities.
Make sure to follow these three tips to and you’ll be on your way to making your business in Japan successful.