Your Corporate Bank Account in Japan—A Comprehensive Guide
The next step in setting up your Japan-based corporation is opening a corporate bank account in Japan. While it is possible to use your personal bank account for business transactions, most accountants advise against doing so.
The benefits of opening a dedicated corporate account are numerous: your trust factor increases if you need to apply for a loan or a business subsidy in Japan. Also, having a business bank account factors favorably in how other vendors view you.
The reverse is true, too. Using your personal bank account for business transactions can look suspicious to Japanese institutions, business partners, and the general public.
This article covers the documents to prepare, factors that could cause refusal, common mistakes to avoid, and a step-by-step guide to follow when attempting to open a company bank account in Japan.
📝Documents to prepare
Forewarned, forearmed. Here is what you will need to prepare to open your account successfully.
Error-free completed application form
Photocopy of the director/representative's ID; *if someone is assisting with the application process, then that individual's ID will also be requested
Personal seal (hanko) of the director/representative
Certificate of company's seal
Articles of company incorporation (tohon)
Business plan of the corporation to prove the company is operating
Note: Some banks require less documentation. Others require more. Each bank will have its own guidelines for what must be submitted to open your company bank account in Japan. However, this is a standard list.
🛑 Factors for refusal
Even if you have successfully gathered the requested documents and have sent in an error-free application form, you may find the bank refuses your application.
Each financial institution will have its own criteria by which they decide on applications, and the requirements across the board are strict. According to Freee, a platform that provides financial services to small businesses and sole proprietors in Japan, the following are reasons that banks will refuse an account:
The amount of capital is too small
The phone number listed was a mobile phone, not a landline
The business in question has no official website
The company could provide no contracts, invoices, or receipts
The company's business goals are unclear
Certain banks will take greater issue with a single point and will disregard other points. But the above list contains the most common reasons that businesses encounter when trying to open a company bank account in Japan.
Use the above as a checklist before starting the application process and focus on gaining high marks for each point.
Opening a Japanese bank account can be a headache. Yet, your first banking experience in Japan doesn't have to be a bad one.
✅ Mistakes to avoid
Opening a business bank account in Japan can feel grueling. Even native Japanese business owners routinely find this experience brutal, proven by the numerous articles (in Japanese) on this topic.
The following list has been collected from recent first-hand experiences. Read it to learn what not to do.
Mistake #1: Not submitting the proper documents.
Each banking institution will have its own list of what must be included when filing to open a corporate account. Refer to each bank's official guidance on the matter.
Mistake #2: Mismatch of name on the application with the name on the tohon.
The representative/director's name on the bank application must be an exact match for the one on your company's articles of incorporation (tohon). The following is an example of what will be refused.
ギャラガー デイビッド トーマス on tohon
ガラハ デイビッド トーマス on the application
Katakana is a phonetic alphabet, and occasionally foreign names can be open to creative pronunciations, dependent on the person doing the writing. However, whatever is first listed on the tohon, must then be listed on the application.
Mistake #3: Using a computer to fill out the form.
For the most part, applications must be handwritten. Even if you receive a PDF copy of the application form, unless specified otherwise, the standard method you are expected to follow is to print out the files and then handwrite your application entries and mail in your documents via the postal service.
Mistake #4. Erasing an error with white correction fluid.
The correct way to fix a mistake is to strikethrough the error twice. And then, in whatever space remains, write out the correct text and add your seal next to the corrected text. Don't use whiteout.
Mistake #5: Stamping your seal in the wrong place.
English language contracts will often have two spaces for both parties to sign. Similarly, Japanese application forms will have two spaces for seals (hanko). One space will be for you, and the other space will be for the bank. Don't use the wrong space.
Mistake #6: Not using the correct seal in your forms.
When filing for other banking services, such as the online banking application, use the same seal you used to open an account. Always stamp with the same hanko (銀行印) you registered when you created your account.
Mistake #7: Using the wrong display name in your application.
For most of the bank forms, the name display should be "company name + title + name."
For example: TokyoMate株式会社 代表取締役 デイビッド ガラハ トーマス
📝A step-by-step checklist
Here is a summary of all the points that were discussed in this article. Use this checklist to help you chart a path to opening your company bank account in Japan.
Step 1: Audit your business.
Ensure your business has a clear online presence, a landline phone number, enough capital, a clear company business plan, and proof of doing business (invoices, receipts, etc.). If your business lacks in any of these areas, focus on improvements before applying to open a business bank account.
Step 2: Prepare your documents.
Apply for and gather all the documents you will need for the initial application. Refer to the bank's website for the bank's document requirements, which will often request a photocopy of the director/representative's ID, the director/representative's personal seal, certificate of the company's seal, company's articles of incorporation, the corporation's business plan to prove the company is operating, etc.
Step 3: Fill out and send in your application form.
The application form will likely need to be filled out in Japanese. If you require language support, let us know! A TokyoMate Assistant can help you fill out the form and make sure all the correct documents are included.
Step 4: Wait for approval.
The bank will screen your documents. This process typically takes between 1 to 2 weeks. Most often, the bank will request an in-person appointment to verify documents and ask any questions that were left unanswered.
Step 5: In-person appointment at the bank.
After the document screening, the bank will ask you to come in for an appointment. You will need to bring your company's articles of incorporation, your company seal, the director's seal, and the director's ID. At this point, the bank may ask you a few questions regarding your business, so it's best to be prepared to give an eloquent explanation of your business' mission. If you need language support, such as an interpreter, that individual will need to bring a photo ID. (Did you know? TokyoMate Assistants can help with in-person interpretation!)
Step 6: Banking documents are sent to your registered address.
The process will be complete once the banking documents (cash card, passbook, contract, and other related banking documents) arrive at your business' registered address. Congratulations! You are now a successful holder of a corporate bank account in Japan.
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