Capital Contributions and Foreign Remittance Regulations in Japan
Capital Contributions and Foreign Remittance Regulations in Japan
When foreign nationals establish a company in Japan—particularly in connection with a
Business Manager Visa—the timing, method, and traceability of the
capital contribution (paid-in capital) become legally and practically critical issues.
(1) Timing of Capital Contributions for Company Incorporation
In practice, when a foreign national establishes a joint-stock company (Kabushiki Kaisha),
the capital must be contributed after the Articles of Incorporation are executed and before the filing
of the incorporation registration.
As a general rule, the capital is paid into:
- The Japanese bank account of the incorporator (if the incorporator already has a domestic account in Japan), or
- The personal Japanese bank account of a Japanese-resident director, such as a
representative director or co-representative director, if the incorporator does not yet possess a Japanese account.
If the funds are paid into a director’s personal bank account, a power of attorney must be prepared separately,
granting the director authority to receive the capital contribution on behalf of the incorporator.
In the case of a Godo Kaisha (GK), the capital must likewise be fully contributed
after execution of the Articles and before the incorporation filing.
However, unlike a Kabushiki Kaisha, a Godo Kaisha is not legally required to use a bank transfer
(see Section (3) below).
Because the exact timing of capital contribution is closely examined in corporate registration,
it is strongly advisable to coordinate the schedule in advance with a judicial scrivener
or other corporate registration professional.
Even where the incorporator already holds a personal Japanese bank account with a balance exceeding
JPY 5,000,000, it is not sufficient merely to show the balance.
The authorities require a verifiable funds transfer record demonstrating that the amount
corresponding to the stated capital was actually deposited as a capital payment. Accordingly, a formal deposit-and-withdrawal
transaction must be executed through a bank counter or online banking platform.
Japanese bank personnel are well accustomed to these formalities, and where the procedure is unclear,
guidance can be readily obtained at a branch counter.
The institutions that may handle capital payments include:
- Domestic Japanese banks and their branches within Japan,
- Japanese branches of foreign banks established with approval from the Prime Minister of Japan, and
- Overseas branches of Japanese domestic banks.
Once the incorporation is complete, the paid-in capital may be freely used
even before filing the Business Manager Visa application,
for business startup expenses such as office rent, equipment purchases, and operating costs.
(2) Key Considerations for International Wire Transfers
International remittances are typically subject to multiple layers of fees, including:
- Outbound wire transfer fees,
- Foreign exchange handling fees, and
- Inbound receiving fees charged by Japanese banks.
These deductions must be fully anticipated in advance.
For example, if the Articles of Incorporation specify capital of JPY 5,000,000,
but the net amount credited after fees is only JPY 4,995,000,
the legal requirement of full capital contribution is not satisfied.
This issue is especially acute for overseas remittances, as Japanese banks often deduct a separate
inbound handling fee in addition to the sending bank’s charges.
Transfer schedules also vary depending on the remitting country, currency, and intermediary banks involved.
Accordingly, the expected settlement timeline should always be confirmed in advance.
In addition, certain jurisdictions impose statutory caps on outbound remittances.
A representative example is the restriction in China limiting foreign currency remittances to
the equivalent of USD 50,000 per person per year.
Such regulatory ceilings must be carefully verified before planning capital funding.
(3) Godo Kaisha: Bank Transfers Are Not Always Mandatory
For a Kabushiki Kaisha, Japanese law requires that capital contributions be made at a
designated financial institution determined by the incorporator.
By contrast, this statutory restriction does not apply to a Godo Kaisha (GK).
Accordingly, in a GK structure,
cash contributions are legally permissible in lieu of bank transfers.
In such cases, proof of capital contribution is established by:
- A capital payment certificate issued by the representative member, and
- Supporting documentation such as cash receipt records.
Each member of a Godo Kaisha is legally required to complete the full contribution of capital
after execution of the Articles of Incorporation and before the filing of the incorporation registration.
The Legal Affairs Bureau verifies compliance with this requirement through the attached capital payment certificate.
However, for purposes of the Business Manager Visa examination,
immigration authorities scrutinize the origin and traceability of the contributed funds.
Accordingly, from a visa-risk management perspective,
inter-bank wire transfers are strongly recommended even for Godo Kaisha capital contributions.
Although Japanese company law allows flexible proof methods for GKs, immigration practice prioritizes
clear financial traceability. In this respect, bank passbook records or transaction statements
generally carry far greater evidentiary weight than privately issued cash receipts.
Strategic Compliance Risks for Business Manager Visa Applicants
- Failure to complete capital payment before incorporation filing will invalidate the registration.
- Net remittance shortfalls caused by transfer fees may render capital legally insufficient.
- Cash-based capital contributions weaken source-of-funds verification in visa screening.
- Foreign exchange controls in the remitting country can delay or block funding.
- Immigration authorities prioritize full fund traceability under the Business Manager Visa framework.
Because capital contributions function as both a corporate law requirement
and a core immigration screening factor, foreign founders must structure funding
with simultaneous regard to company law, banking regulations, foreign exchange controls,
and Business Manager Visa compliance.
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FAQ: Business Purposes and Licensing Requirements in Japan: Articles of Incorporation Compliance
Professional
Masakazu Murai Immigration consultant, financial advisor 18 years’ experience in Investment Banking at Mitsubishi UFJ Morgan Stanley. He had provided financial advisory more than 500 entrepreneurs and senior management.
Gyoseishoshi Immigration Lawyer
– Co head of the Tokyo Gyoseishoshi Association, Minato branch
CMA(Japanese financial analyst license)
CFP (Certified Financial Planner)
MBA in Entrepreneurship
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