Is a bank account necessary for opening a business in Japan as a foreigner? Detailed explanation of required situations and account opening methods

When a foreigner establishes a company, one of the barriers is the preparation and opening of a bank account. Without a bank account, it becomes difficult not only to manage the capital but also to receive payments from business partners and make payments to suppliers. However, opening a corporate bank account as a foreigner is not easy, and it can hinder the smooth progress of the company establishment process.

The key points of this article are as follows.

This article summarizes the methods and necessary documents for opening a bank account when a foreigner establishes a company. It also introduces points to consider when opening a corporate account proves challenging.

By knowing the procedures and required documents in advance, you can ensure a smooth account opening process. Please take a look.

1.Bank Accounts Needed During and After Company Establishment

When establishing a company and after it is established, a bank account is necessary. Bank accounts are mainly required in the following situations:

• Management of capital before and after company establishment (personal account of the representative founder)
• Incoming and outgoing payments (corporate account after company establishment)

Let’s look at each situation in detail.

1-1. Procedure for Establishing a Company in Japan as a Foreigner

The procedure for a foreigner to establish a company in Japan is as follows:

1. Decide on the basic matters of the company.
2. Create a registered seal (jitsuin).
3. Prepare the articles of incorporation and have them notarized by a notary public.
4. Pay the capital (investment) into the personal account of the representative founder (investor).
5. Apply for company registration and submit the business opening notification.
6. Change to a Business/Management visa.
7. After establishing the company, open a corporate account and transfer the capital to the corporate account.

Out of these procedures, two bank accounts are required: the account for paying in the capital (investment) in step 4 and the corporate account for managing the capital after the company is established in step 7.

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1-2. Managing the Account for Capital Payment During Company Establishment

In the process of establishing a company, a bank account is required to pay in the capital. The bank accounts that can be used for company registration are as follows:

• The main branch and branches of the Bank of Japan located in Japan.
• Branches of the Bank of Japan located overseas.
• Japanese branches of foreign banks located in Japan.

If a foreign investor (founder) residing overseas has a bank account with an overseas branch of the Bank of Japan, that account can be used. However, opening a new account with an overseas branch can be difficult. This is because overseas branches of the Bank of Japan mainly provide financial services to Japanese companies and may not offer account opening services to foreign residents.

Many foreign residents living overseas do not have a Japanese bank account. Financial institutions often impose conditions for account opening, such as “having stayed in Japan for more than six months” or “having a residence card.” Therefore, it is difficult for foreigners who come to Japan for short-term stays to open a bank account in Japan.

Note: This refers to a bank account with a main or branch office of a Japanese bank in Japan, an overseas branch of a Japanese bank, or a Japanese branch of an authorized foreign bank. If the capital is paid into an overseas branch of a Japanese bank, the amount must be indicated in Japanese yen based on the exchange rate on the day of the transfer.

Using a Collaborator’s Bank Account in Japan for Capital Payment is Recommended

If a foreigner residing overseas does not have a bank account in Japan, it is recommended to have a collaborator in Japan make a partial investment and become a founder or temporarily act as an initial director. There is also an exception (※) where a collaborator can help without becoming a founder or director, but considering the opening of a corporate account and domestic transactions after the company is established, it is better for them to become a founder or director.

By using the personal bank account of the individual who becomes a founder or initial director for capital payment, the company registration can be completed.

※The exception applies if none of the founders or initial directors have an address in Japan.

Points to Note When Transferring Capital

When a foreigner residing overseas transfers capital (investment funds) to the account for capital payment, there are several points to be aware of.

Transfer Capital After Articles of Incorporation Are Notarized

Even if there is a balance equivalent to the capital in the account for capital payment, it is necessary to withdraw it once and then transfer it again as capital on a date after the articles of incorporation have been notarized. Simply having a balance is not sufficient. It is necessary to record a history showing that the funds were transferred as capital.

Transfer More Than the Capital Amount

When transferring capital (investment funds) from overseas, it is advisable to transfer a slightly higher amount than the capital because there may be transfer fees costing several thousand yen. If the transferred amount is less than the specified capital, the company cannot be established. Additionally, since the transfer may take several days, it is important to transfer the funds early to allow for sufficient time.

Capital Can Be Used Freely After Company Establishment

After the company is established, the capital can be freely used for business operations. It can be used for purchasing office equipment, advertising, and marketing activities. The capital can be used even before transferring it from the founder’s or initial director’s account to the new corporate account. However, receipts for expenses paid should be kept.

Furthermore, although there is a requirement of 5 million yen in capital for the Business/Management visa application, it is permissible to use the capital as company expenses before applying for the Business/Management visa, as long as it is after the company has been established.

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1-3. Account for Incoming and Outgoing Payments

After establishing a company, business activities progress through transactions with other businesses. Therefore, a corporate account is necessary for receiving payments from clients and making payments to suppliers.

Additionally, there are instances other than transactions where deposits and withdrawals occur. For example, when purchasing supplies necessary for the business, it is easier to account for these as expenses if payments are made from the company’s account. It also helps in keeping track of the company’s cash flow.

2.Opening a Corporate Account as a Foreigner is Difficult

In reality, opening a corporate account is not easy. For foreigners, the required documents may be more numerous than for Japanese citizens, making the process even more challenging. Let’s look at some tips and methods for foreigners to open a corporate account.

2-1. Open a Personal Account First

As mentioned later, opening a corporate account takes about 2-3 weeks. Meanwhile, if you have a visa that allows you to stay in Japan, such as a Business/Management visa, you can open a personal account. Personal accounts have relatively quick processing, and some financial institutions can open them as quickly as the same day.

You need an account to manage company funds until the corporate account is opened. Open a personal account for the corporate representative first and use it for managing operating funds.

2-2. Consider Local Financial Institutions and Online Banks

Due to the review process during account opening, it is not always possible to open an account with the desired financial institution.

The ease of opening an account can be ranked as follows:

1. Internet banks
2. Credit unions (Shinkin banks)
3. Japan Post Bank (Yucho Bank)
4. Regional banks
5. City banks

Especially for major banks and city banks with branches and offices nationwide, the number of account opening applications and review criteria is high, making it difficult to open a corporate account.

If it is difficult to open an account with a major or city bank, consider financial institutions such as regional banks and credit unions. Regional banks and credit unions may offer more flexible responses. Also, consider online banks, which allow all procedures from application to account opening to be completed online, eliminating the need to visit a branch.

Banks aim to open accounts for companies with which they can conduct future transactions, such as lending. Therefore, banks often refuse to open accounts for companies without a track record and whose business situation may result in the company returning to its home country.

By opening an account with an internet bank and getting your business on track in Japan, you can later open accounts with credit unions, regional banks, and city banks.

2-3. Easier Account Opening if the Representative Director Resides in Japan

Many financial institutions, not just online banks, offer online procedures for account opening. These procedures can be completed from anywhere, but often come with conditions such as “the applicant must reside in Japan” and “the applicant must have a residence card in Japan,” making it difficult to open an account while residing abroad.

Therefore, it is recommended to appoint a resident of Japan as the representative director at the time of company establishment. This will facilitate smoother administrative procedures associated with the company establishment.

3.Required Documents for Foreigners to Open a Bank Account

When opening a corporate account, the following documents are required:

• Certificate of Registered Matters (履歴事項全部証明書)
• Corporate Seal Registration Certificate (法人の印鑑証明書)
• Identification documents of the person in charge of transactions

Identification documents include a driver’s license, passport, or individual number card (My Number Card). If the corporate representative or person in charge of transactions is a foreign national, a residence card will also be required.

Depending on the industry, documents showing permits or registrations from administrative agencies may also be necessary. Additionally, the following documents may be requested, so it’s essential to prepare them:

• Documents or URLs that clarify the company’s business activities
• Documents confirming the ultimate beneficial owner

4.Time Required for Foreigners to Open a Bank Account

When applying to open a bank account, whether personal or corporate, the designated review process by the financial institution will be conducted. For corporate accounts, the review period typically takes 2 to 3 weeks.
If there are any deficiencies in the documents or if additional documents are requested during the review process, the review may take even longer. It can take about a month to open an account, so if the date of company establishment is fixed, apply early, working backward from that date. It is also important to prepare the correct documents without any omissions and to respond promptly when additional documents are requested.

A bank account is essential for a company to conduct its business activities. When you decide to establish a company, in addition to arranging for financing and selecting business locations, make sure to also prepare for opening a bank account.

5.Summary

In this article, we have explained the essential points that foreigners should know when opening a bank account for company establishment. To summarize the content:

Although it is possible to establish a company without a corporate bank account, it is advisable to open a corporate account instead of using a personal one to gain credibility with business partners and other financial institutions. Refer to the introduced procedures and methods to open a corporate bank account as soon as possible.

Establishing a company and opening a corporate bank account require various documents and compliance with numerous requirements. If you fin