Banks are an essential part of performing business in Japan. . With Covid-19 pandemic pressing on, this routine of regularly visiting the bank, being already burdensome on its own, has been made to be more challenging.
Covid-19: A Bane to the Banking System
Store-type mega banks bear the brunt of these challenges. Customary protocols such as face to face transactions at the counter — inconsequential in the days before the pandemic — now have to abide with stringent guidelines. One has to have a mask, sanitize the hands with the alcohol dispensed at the bank entrance, be at a safe distance with the staff and fellow customers, and so on. With more steps done by every serviced patron, one can already see how this problem can balloon and negatively impact the whole banking sector and their customers. Nowadays, customers have to stay waiting longer at their respective bank branches for even the most mundane matters.
The Pandemic as a Catalyst for Digitalization
Mega banks have made palpable efforts towards digitalization of their services, but the current state of execution of their services is still far from ideal. Prompt delivery of their online banking systems still resides in delays. Frequent changes in internal policies largely dependent on strict bank regulations have caused confusion amongst bankers and their customers.
We cite one example in which one of our clients have requested for an urgent overseas remmitance via SMBC. In the days prior to Covid-19, transactions of this kind didn’t take longer than 10 minutes save for expectedly busy days at the end of the month. This particular transaction took more than 3 hours to get completed. There were more than the usual number of banking personnel, but the internal confusion caused by volatile internal policies must have affected their operations that it felt inefficient and dysfunctional.
Opening a Japanese Corporate Bank Account
With regards to the opening of a corporate bank account, nowadays, it takes more than a month to complete such process for both mega banks and internet banks. Bank rules have become stricter in this Covid-19 period.
Selecting which bank to initiate opening a corporate bank with is a crucial decision for anyone interested in setting up a company in Japan. Things such as what information and documents the bank requests, fees incurred, and even the automation of their services have to factored in the decision making.
Bank Recommendations for Opening a Corporate Account
Here is our recommended list of Japanese banks for newly setup companies to open a corporate bank account with, along with their respective pros and cons.
Online Banks
Sumishin SBI Net Bank
Pros
• company seal is not required to apply
• bank transfer fee is almost half of store-type bank fee
Cons
• monthly social insurance premium for employee cannot be auto-deducted from online bank
Japan Net Bank
• Pros
• bank transfer fee is almost half of store-type bank fee
Cons
• company seal is required to apply
• some application documents such as business plan have to be written by hand
monthly social insurance premium for employee cannot be auto-deducted from online bank
Store-type Mega Banks
SMBC (Mitsui Sumitomo Bank)
Pros
• Holding coporate account in mega bank gives prestigious impression
Cons
• Bank transfer fee is twice higher than internet bank
Caveats and Conclusions
Tax and government payments such as social insurance premiums is not available for processing via internet banking. It requires visitation to a bank branch for these transactions to proceed.
English interface is not available for most Japanese banks. Even though MUFG offers English interface internet banking service, Katakana is still obligatory for vendor payments.
Our best choice for opening a corporate bank account would be either at Sushin SBI Net Bank or with Japan Net Bank.
We do not recommend Rakuten Bank for opening a corporate bank account. Their requirement of ownership of a landline office phone number is an extra step we deem unnecessary and problematic as most startups don’t have a landline to begin with.
