Model case:
3-person office (of which 1 is a foreign national)
One condition of the investment/management visa company must employ two or more Japanese people. Thus, the personnel make-up of the company in this model case is three people: two Japanese and one foreign national. Indeed, this is typical for an overseas company's initial entry into Japan.
Basic premises of the model case
Having spent three months based at Japan Business Center preparing to open for business, the overseas company establishes either a kabushiki kaisha or a branch.
A 50m2 office is rented in Makuhari New Town business district. The company buys office machinery and equipment, but no decoration, renovation, or other construction work is done on the office. One of the Japanese employees is manager-level, and was hired through a placement agency, while the other is a clerical worker that answered the company's situation vacant advertisement in a newspaper.
The non-Japanese employee has relocated to Japan alone. Until he found a place to live, the foreign national stayed on a long-term basis in hotel located in Makuhari. The non-Japanese employee rents a 75m2 apartment in a residential area of Makuhari. The company generally engages a professional to carry out various procedures on its behalf related to the establishment of the company, tax, and other matters.
The figures shown on the following list are given in US$: we calculate US$1 as ¥110(fractions are rounded out to the nearest whole number).
| Kabushiki Kaisha | Branch | |
| Preparation | ||
| Rent on temporary offices*1 | 2,000 | 2,000 |
| Deposits payable on temporary offices*1 | 7,818 | 7,818 |
| Long-term hotel stay*2 | 5,455 | 5,455 |
| Subtotal | 15,273 | 15,273 |
| Obtaining visas | ||
| Certificate of eligibility*3 | 1,364 | 1,364 |
| Visa application*4 | 55 | 55 |
| Re-entry permit*3 | 227 | 227 |
| Subtotal | 1,646 | 1,646 |
| Company establishment and tax notices | ||
| Expenses payable when registering a company*5 | 2,527 | 918 |
| Paid-up capital*6 | - | 0 |
| Having a name seal made*7 | 455 | 455 |
| Company registration and notices*3 | 2,273 | 1,818 |
| Tax notices*3 | 409 | 409 |
| Social insurance notices*3 | 1,182 | 1,182 |
| Subtotal | 97,755 | 4,782 |
| Personnel matters | ||
| Hiring a manager*8 | 28,636 | 28,636 |
| Hiring clerical staff*9 | 909 | 909 |
| Subtotal | 29,545 | 29,545 |
| Setting up an office | ||
| Rent (monthly)*10 | 1,455 | 1,455 |
| Security deposits*11 | 14,550 | 14,550 |
| Broker's fees*12 | 1,455 | 1,455 |
| Buying office machinery and equipment*13 | 15,636 | 15,636 |
| Fire and damage insurance*14 | 364 | 364 |
| Subtotal | 33,460 | 33,460 |
| Setting up a residence | ||
| Rent (monthly)*15 | 1,364 | 1,364 |
| Security deposits*16 | 6,820 | 6,820 |
| Broker's fees*17 | 1,364 | 1,364 |
| Subtotal | 9,548 | 9,548 |
| Total | 96,318 | 94,254 |
*1 Assumes the company uses Japan Business Center in Makuhari New Town.
Separate communication charges apply.
*2 Assumes 60-night stay in a standard-class hotel in Makuhari.
*3 Assumes using administrative scrivener, accountant, legal offices, etc.
*4 Actual expense for two general entry visas.
*5 Actual expense for registration and licence tax, actual fee, and actual expense for obtaining an official copy, etc.
*6 The model case does not include paid-in capital, as paid-in capital amounts vary by business type. Therefore, the total initial cost for setting up business in Japan will be the above total plus the paid-in capital. The minimum requirement for paid-in capital was abolished under Japan's new Corporate Law (it was formerly JPY10 million), therefore new entrants are free to set the paid-in capital amount themselves. They must, however, take into consideration when setting up business in Japan various requirements (set forth in relevant rules and regulations), such as those in relation to visa eligibility and dividend distribution.
*7 Assumes company and personal seals are made.
*8 Assumes commission of 30% of annual income of ¥10 million (incl. consumption tax).
*9 Assumes recruitment advertisement placed in English-language newspaper.
*10 Assumes office building in Makuhari New Town (incl. common services fee).
*11 Assumes deposit of ten months' rent.
*12 Assumes commission of one month's rent.
*13 Assumes OA equipment, desks, chairs, etc., for three people were purchased.
*14 Assumes advance payment of insurance premiums for one year's coverage of general non-life insurance.
*15 Incl. administration fee.
*16 Assumes deposit of five months' rent.
*17 Assumes commission of one month's rent.