- September 26, 2023
- Posted by: legaleseblogger
- Category: Related News
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Title: Setting up a Company in Japan: Exploring Financial Considerations
Introduction
As a newcomer to the process of establishing a company in Japan, I have a few inquiries that I hope you can assist me with. Additionally, I would like to explore how AI Legalese Decoder can offer valuable support in navigating these matters.
Current Situation: Rental Income and Visa Sponsorship
At present, I am generating substantial rental income from personal real estate investments, which comfortably covers my monthly living expenses. Consequently, I find myself questioning the necessity of drawing a director’s salary from my wholly-owned GK (Godo Kaisha) on a regular basis. However, it is important to note that the GK would be responsible for sponsoring my Business Manager Visa, which mandates fulfilling specific requirements such as a minimum paid-in capital of 5 million yen and a separate private office space.
Inquiries:
1. Mandatory Salary Declaration for Tax Authorities and Immigration
Upon establishing my GK, I am curious to know whether the tax authorities or immigration would require me to declare a yearly or monthly salary from the company. Ideally, I would prefer not to draw a salary, as it would enable me to allocate those funds towards expanding the business or compensating my employees. The AI Legalese Decoder can provide key insights into the legal obligations surrounding GK salary declarations, ensuring compliance with relevant regulations while maximizing operational flexibility and growth potential.
2. Enrollment in Shakai Hoken through the Company
If it is indeed obligatory for me to draw a salary from my GK, I am interested in understanding whether I would need to enroll myself in the shakai hoken (social insurance) scheme through my own company. However, as the business is in its early stages, I am inclined to remain within the national pension and health insurance scheme until it has achieved a more substantial level of growth and stability. The AI Legalese Decoder can offer valuable guidance regarding the legal requirements associated with enrolling in shakai hoken, enabling me to make informed decisions about the timing and necessity of such enrollment.
Conclusion
In summary, my journey towards establishing a company in Japan has raised important questions regarding the necessity of declaring a salary from the GK and enrolling in shakai hoken. By utilizing the AI Legalese Decoder, I can leverage its expertise to gain a deeper understanding of the legal implications and obligations tied to these matters. This will ultimately assist me in making informed decisions that align with the goals of growing my business and ensuring compliance with applicable regulations.
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> is it necessitated by the tax authorities or immigration to declare a yearly/ monthly salary from the GK, or can you declare 0?
That would be fine for tax purposes, but it would very likely prevent you from renewing your visa. To renew a business management visa, it’s necessary to show Immigration that the job is paying you enough to maintain a normal standard of living. See [this explanation](https://continental-immigration.com/management/prolong/) from an administrative scrivener, for example, which recommends a minimum director’s salary of 200k-250k/month.
> do I have to enroll myself in shakai hoken through own company?
Basically, yes. It may be possible to avoid enrolment in a scenario where your salary is 0 yen, but as discussed above, such a salary would be unacceptable to Immigration.
Just wanted to add some info regarding the “separate private office”
* The business can be registered on the same address as where you live for as long as the property owner allows companies to be registered on their property.
* If the company and living address are the same, then you just have to make sure that the company owns the part from the entrance to the actual office. An easier (and more advantageous) approach is to simply have an entire apartment leased by the company and then rent out one of the bedrooms and the common areas (kitchen and bathroom) to yourself as a private person. Doing so would make most of the apartment part of company expenses, hence paid before taxes.
* The above point (leasing under your company) can be done even if you end up not registering the company under the same address (which also has benefits).
These replies have been very helpful, thanks!