Starting Up Your Business in Osaka: Introduction
Business start up
1. Opening a bank account
(1) Company bank account and Personal bank account
A company, a branch, or an LLP is able to obtain a “certificate of company registry (Tokijikoshoumeisho)” as such entity requires registration at the Legal Affairs Bureau. Therefore, these types of entities can open their own bank account under the name of company, branch, or LLP by certifying their existence in Japan by the certificate aforesaid. (There is a case that the bank account opening is rejected as a result of examination by the bank. Therefore, prior research and meeting with each bank are recommended.)On the other hand, a representative office cannot open its bank account under the name of the representative office as it cannot obtain any public certificate such as a “certificate of company registry (Tokijikoshoumeisho)” certifying its existence in Japan. Only a personal bank account of a representative, etc. can be opened.
(2) Foreign bank vs. Japanese bank
Foreign companies generally prefer to open a bank account at a Japanese branch of foreign bank that deals with their headquarters. However, it is advisable to have at least one bank account at a Japanese bank, since using foreign banks is usually inconvenient for daily transactions, etc. because foreign banks do not have many local branches in Japan (even in Tokyo) and are not registered as a national revenue agency which may handle payment of various taxes and social insurance premiums.
(3) Checking account vs. Ordinary account
In the US, checking accounts are commonly used for general cash disbursements, as checks are the primary means of payment there. In Japan, however, we make most payments via cash remittance through ordinary bank accounts rather than checks. Therefore, it is advisable to open an ordinary account at a Japanese bank.
(4) “Hanko” (Seal)
It is not common to register the signature of the authorized company representative at a bank for the purpose of verifying identification like in foreign countries. Instead, we register a personal seal in the case of a representative office, and register a company’s seal in the case of a corporation or branch, at the bank. We can withdraw up to a certain amount using a cash card and ATM, however, if the amount required exceeds certain limits, it may be withdrawn only with the registered Hanko and a passbook at the bank in person. The Hanko and the passbook should be stored separately to avoid unauthorized withdrawals. Currently, the internet banking service is available, however, the service is provided in Japanese only.
(5) Automatic transfer arrangement
In Japan many companies set up automatic bank transfer arrangements for periodic payments such as rent, utilities (electricity, gas and water) and telecommunications. When implemented, an advance notice of the automatic withdrawal is sent to the company for verification purposes together with a receipt for the prior month’s charge.
2. How to find an office location
(1) Bilingual real estate agencies
Generally speaking, it is not easy to find an office location without experienced assistance, as it is quite difficult to understand the terms and conditions of lease agreements. And in some cases, office owners are still reluctant to lease their offices to foreign companies.
(2) Leasehold deposit and key money
A leasehold deposit, and, occasionally, payment of key money are required by a landlord for renting an office. Key money, a charge that is very common, especially in Western Japan, is nonrefundable. If a lease agreement states that some or all of the leasehold deposit is also nonrefundable, the non-refundable portion of the leasehold deposit, as well as the key money, can be treated as a deferred charge and can be amortized in accordance with Japanese tax law.
(3) Sub-lease and social insurance registration
Newly established companies often lease offices from other tenants under sublease agreements. In such cases, a social insurance office usually requests that you should register both the main leasing contract and the sub-lease agreement for social insurance purposes.
3. Recruiting
(1) Regular employees
There are several ways to recruit a new staff, including:
- An Employment Service for university graduates, training schools, etc.
- Public employment security office
- Private employment agency
- Advertisement in newspapers or magazines
- Direct recruiting through personal contact
If you seek a candidate with business experience, professional expertise, or English language ability, private agencies and English media, e.g. daily English newspapers, are effective means.
(2) Temporary staff
It has become popular in Japan to use private agencies to hire temporary or part-time staff. Some agencies specialize in recruiting staff from specific professions, e.g.
secretarial, clerical, accounting and engineering. One particular benefit of using the staffing service provided by such agencies is that an employer who uses temporary staff does not have to handle social insurance and withholding income tax matters, which are taken care of by the agencies. Therefore, hiring temporary staff from these agencies can be extremely beneficial in the start-up stage of a company when its payroll function has not been established.