This page outlines the necessary procedures from the set up of the company to the payment of salary for the first employee
The company (K.K. or G.K. ) or branch is legally set up in Japan once it has registered with the Legal Affairs Bureau. Around one week after the registration with Legal Affairs Bureau, the company or branch can obtain a certificate of registration. This certificate of registration called “Tokibo Tohon” or just “Tohon” in Japanese is an essential documents for all following procedure. In addition to the certificate of registration the company will also get a certificate of registration for the registered seal of the company under the name of the representative director “inkanshomeisho” in Japanese.
As soon as possible and less than 3 months after date of creation to benefit from “blue return tax status” the company should register with relevant tax offices which are the national tax office and Local Tax office for the equivalent of federal tax and state tax on the U.S.
Please note that the first tax return for the company is for the period from creation of the company to end of fiscal year. For example, even is the company is created on December 28 , if the end of fiscal year if December 31st, company must submit a full tax return for the first fiscal year from December 28 to December 31st. This point is to be kept in mind when creating a new company in Japan.
One of the document submitted to tax office will be a report on establishment for a salary payment office for withholding tax purpose. This documents is necessary to register the company with Social Insurance and Labor Insurance so that employees of the company can enjoy the standard benefits of Japanese employees.
Typical list of documents to be filed are:
– Report on establishment
– Application for “blue form “ return status
– Report on establishment for a salary payment office for withholding tax purpose
– Application for extension of filing due date of corporate tax return (usually one month)
– Report on approval of extension of filing due date for prefectural and municipal tax offices
– Application for approval of semi-annual payment of withholding tax to tax authorities
– Report on accounting method used for inventory valuation, securities valuation and depreciation and valuation of short term receivables and payables denominated in foreign currencies
JMC tax partner can take care of this registration.
In order to register with Social Insurance and Labor Insurance, the company must first hire a first employee. Please note that if the first employee is a director of the company he may not be allowed to register with Labor Insurance. If employee wishes to be registered with Social Insurance, company can use Eric Perraudin representative services, so that the employee is no more the representative and can register with Labor Insurance.
With the document mentioned above “report on establishment of a salary paying office and information details about its first employee, company can register with Social Insurance and Labor Insurance. JMC partners can take care of this process.
JMC can open a bank account for a company which has a certificate of registration and manage the bank account on behalf of the company in order to pay salaries, payroll taxes, corporate taxes and vendor invoices. Please note that it is difficult to pay taxes form an account with a foreign bank in Japan. For more details please consult JMC page about cash management.
Disclaimer: This information is for illustration purpose only. JMC cannot be held liable for any decision made based on this information. For any advice regarding company set up, taxes and social insurance in Japan, Legal Professional, Licensed tax accountant, Licensed Social Insurance consultant should be consulted.