When we talk with foreign nationals who are contemplating setting up a company in Japan, we are often asked such questions as whether they can open a corporate bank account in Japan or when they can open a corporate bank account in Japan.
In Japan, a corporate bank account can only be opened after the completion of the company’s registration. In other words, a corporate bank account cannot be opened prior to the registration of the company.
So then, once the company is registered, is it possible to open a corporate bank account right away?
Even if you ask a bank if it is possible to open a corporate bank account prior to the company’s registration, the only answer that you will get is that “it depends on the screening after the application [to open a corporate bank account is submitted.
Although how the opening of corporate bank accounts are handled varies from bank to bank, we provide a general explanation below based on Kobe Legal Partner’s experience to date.
What about when you have a company, but there is no one in Japan?
Under Japanese law, it is possible to set up a company even if the directors do not live in Japan. In other words, in some cases a company may be set up, but none of its directors live in Japan.
Since this is permitted by law, is it safe to assume that a corporate bank account can be opened even if none of the company’s directors reside in Japan? In reality, even if a company is established but none of its related persons such as directors reside in Japan, it will not be possible to open a corporate bank account.
At the behest of Japan’s Financial Task Force (JFTA) which is tasked with implementing measures to combat the financing of money laundering and terrorism, opening a bank account in Japan has become much stricter. When a company’s actual business conditions cannot be ascertained, there is an inescapable doubt about the company’s being a dummy corporation for money laundering, and the bank will refuse to open a bank account. Therefore, even if a company has been established, but there is no one in Japan, the bank cannot open a bank account since the company’s actual business conditions cannot be ascertained.
What about if someone is running the business in Japan?
Even if there are no investors or representatives in Japan, a bank will open a bank account when there are other directors and employees in Japan and it is possible to confirm that the business is being properly run.
In addition, it may be possible to open a bank account when someone who is already in Japan with some kind of visa even before the status of that person’s visa is changed to a corporate manager visa. However, since this is a delicate issue, it may be up to the bank’s decision. Depending on the bank, if the person in Japan does not have a visa allowing him or her to manage the company, the bank may refuse to open a corporate bank account.
In the case where a person not residing in Japan comes to Japan to launch a business, it is difficult to open a corporate bank account if that person does not have an address in Japan after obtaining a business management visa following the establishment of the company.
When a foreign company or other foreign entity expands into Kobe, opening a corporate bank account should be relatively simple with JETRO’s assistance. Since Kobe Legal Partners has a strong relationship with JETRO, if you consult with us, we would be happy to introduce you to JETRO.
Please feel free to consult with Kobe Legal Partners about your expansion to Japan.