Starting a Business? How to Pay Your Employees in Japan
If you want to start a business in Japan, you must give much consideration to the county’s rules and regulation. Also, you must consider some of their unwritten rules. This is important because the economy of Japan is different compared to other countries, especially the United States economy. A simple mistake may lead to unpleasant consequences, like not having the right payroll outsourcing in Japan may lead to consequences you will not like. It is best to understand their rules and regulations in business. It is also very advisable to have a bilingual consultant or lawyer. You must also pick the right firm to have a good payroll outsourcing in Japan to pay your employees.
Here are four things you must do if you want to start a business in Japan:
1. There are four major business models in Japan, you must study and understand each of them. First is a representative office, which is a business wherein an already-established foreign company in Japan is being replicated. In this business model, you can conduct surveys and implement duties incorporated with advertising and publicity. However, you are not allowed to sell anything. The second model is a branch office. This model has no legal corporate status yet, but is allowed to sell products and make trades representing the foreign parent country. Third is the subsidiary company model. This model can be a joint-stock corporation or a limited-liability company. This has its own identity regardless if it has a parent company or not. Fourth is the limited-liability partnership business model. The Japan External Trade Organization or JETRO describes this model as a partnership not a corporation.
2. For your legal document, you must get an official seal or hanko in Japanese. This seal must have your name or your company’s name. Signatures are sometimes allowed, but because of the variation of signatures, some agencies will not accept your documents without the official seal. Seals are not expensive; you can get them for 15,000 to 25,000 yen. There are hundreds of seal carver establishments in Japan where you can get your seal.
3. You must register your company with the Legal Affairs Bureau. This bureau can be found at the National Ministry of Justice. To register you must submit an application of company registration and a certificate of seal registration. This will authorize your business to operate in the district of Japan where you plan to run your business. Registering may cost you 0.7 percent of the total capital of your business or around 60,000 yen. This process will take you a month to complete.
4. The documents you obtained in the Legal Affairs Bureau must be submitted to the local tax office of your district. You must provide health insurance applications for your employees to the Social Insurance Office to prevent any delays in opening your business. If you have 10 or more employees, you must file your terms of business or business practice standard. You must submit these documents to the Labor standards Supervisory Office.