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vol.4 Office lease contract and opening of a bank account in Japan
Since the residency requirement for officers of Kabushiki Kaisha (KK) and Godo Kaisha (LLC) was eliminated in 2015, officers no longer need to be residents of Japan, and it is possible to establish a Kabushiki Kaisha (KK) or a Godo Kaisha (LLC) in which all officers are foreign residents based on the Companies Act.
However, in most cases, at least one representative director (executive director) residing in Japan is appointed in practice, as the process of concluding lease contracts and opening bank accounts after establishment of the company is very difficult without a representative director (executive director) residing in Japan.
1. Office Lease Contract
In general, finding an office space without real estate agents is not easy 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-based companies. Therefore, it is useful to use bilingual real estate agents who deal primarily with foreign tenants.
As unauthorized use of a residential property for business use may be a breach of contract, please consult with office owner in advance.
Please note that if you are planning to obtain the status of residence “Business Manager”, an “actual” place of business is required. A virtual office is not considered as a place of business. (See a column “Visa for foreigners and status of residence in Japan (2)”)
2. Opening of a Bank Account in Japan
“Certificate of Company Registry (Tokijikoshoumeisho)” is issued for a company or a branch (Foreign Company’s business office in Japan) 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 a company or a branch by certifying their existence in Japan by such Certificate. 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.
However, the “Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT)” has been tightened recently worldwide, and it has become very difficult to newly open bank accounts.
There is a case that the bank account opening is rejected as a result of examination by the bank.
It is no exaggeration to say that a Kabushiki Kaisha (KK) or a Godo Kaisha (LLC), where all the officers are foreign residents cannot open an account. Therefore, please appoint at least one representative director (executive director) residing in Japan. However, the presence of a representative director (executive director) residing in Japan does not necessarily mean that a bank account can be opened and bank account opening screening process takes time, therefore, prior research and meeting with a bank are highly recommended. You may consider applying to several banks for bank account opening.
Website goes live March 22th 2023.