When Indonesian entities or individuals consider investing in Japan, the following legal points and practical considerations are essential:
1. Foreign Investment Regulations (Foreign Exchange and Foreign Trade Act)
Before proceeding, it is necessary to check for restrictions on foreign ownership ratios, which vary by industrial sector. While certain sensitive industries require prior notification, our experience with Indonesian clients—specifically in real estate acquisition and hotel operations—has shown that these sectors generally do not face specific restrictions.
2. Incorporation of a Japanese Company (Kabushiki Kaisha)
Foreigners can establish and maintain a Japanese corporation (Kabushiki Kaisha) without physically visiting Japan.
- Structure: It is legally permissible for a non-resident foreigner to serve as the Representative Director. Since the minimum number of directors is only one, a single individual can set up the entity.
- Subsidiaries: Alternatively, an Indonesian corporation may establish a Japanese subsidiary with Indonesian nationals appointed as officers.
- Capital: The minimum capital requirement is only 1 JPY, making the technical setup straightforward. However, seeking professional legal support for the articles of incorporation and registration is strongly recommended.
3. Corporate Bank Accounts (The Practical Hurdle)
This is a critical point: although you can establish a company, opening a corporate bank account is extremely difficult if all officers are non-resident foreigners. Most Japanese financial institutions will not approve a corporate account under these circumstances. To overcome this, investors typically need to:
- Appoint a local Japanese resident as a director (at least initially), or
- Obtain a Business Manager Visa and reside in Japan.
4. Visas: Business Manager vs. Retirement Options
There is a growing demand for long-term residency visas tied to investment.
- Business Manager Visa (Keiei-Kanri): Previously, the capital requirement was 5 million JPY, and the process was relatively simple. However, due to an increase in "paper companies" lacking actual operations, the Japanese government has decided to increase the capital requirement to 30 million JPY. Moving forward, investors must demonstrate not only business substance but also a significant financial commitment.
- No Retirement Visa: Please note that unlike some other jurisdictions, Japan does not offer a "Retirement Visa" for residency without active business management or employment.
If you require legal support for investing in or expanding your business into Japan, please feel free to contact our firm at any time. We offer 16 years of legal expertise and are dually qualified to practice law in both Japan and the United States.
Yuki Nakamura (Mr.)
Attorney admitted in Japan and New York
Founder & Managing Partner
Nakamura Law Offices
Portal Point 1003, 4-17, Sakuragaokacho, Shibuya,
Tokyo, 1500031 JAPAN
Japan: +81-3-6825-4482
US: +1 (415) 373-2953
