Japan Social Security System and Immigration law
Japan’s Social Insurance System and Foreign Nationals
Foreign entrepreneurs establishing a company in Japan are legally required to enroll in social insurance. Compliance with social insurance enrollment is explicitly reviewed during the renewal of Business Manager Visa (経営管理ビザ).
Employers hiring foreign employees must also enroll them in social insurance. Failure to enroll eligible employees can lead to visa application rejections.
Information on employment insurance (雇用保険) enrollment is shared with immigration authorities, meaning any change in employment must be promptly reported according to immigration laws, or penalties could be imposed.
1. Types of Social Insurance in Japan
Japan’s social insurance system includes two major categories:
Social Insurance (社会保険)
- Medical Insurance (国民健康保険・健康保険組合): Covers approximately 70% of medical costs.
- Pension Insurance (国民年金・厚生年金保険): Provides pensions upon retirement or disability.
Labor Insurance (労働保険)
- Workers’ Accident Compensation Insurance (労災保険): Covers work-related injuries.
- Employment Insurance (雇用保険): Provides unemployment benefits. (Mandatory for work-related visas)
2. Who Must Enroll in Social Insurance?
All corporations, including companies with only one foreign director, must enroll in both health insurance and Employees’ Pension Insurance (厚生年金保険). Individual business owners must enroll if employing five or more employees in specified industries.
Companies with Only One Foreign Director
Mandatory enrollment in both health insurance and Employees’ Pension Insurance is required. Enrollment status is assessed during permanent residency (永住権) applications.
Two Types of Health Insurance:
- Health Insurance Societies (組合健保): Established by companies employing over 700 individuals.
- Japan Health Insurance Association (協会けんぽ): Typically for SMEs; most new foreign companies join this scheme.
Individual Business Owners（個人事業主）
Typically enroll in National Health Insurance (国民健康保険) and National Pension (国民年金). Businesses employing five or more workers in designated industries must enroll in social insurance. Confirm specifics with the Japan Pension Service (日本年金機構).
Mandatory Industries for Enrollment (5 or more employees)
- Manufacturing, construction, mining, energy, transportation, finance, insurance, storage, education, healthcare, telecommunications, etc.
Employees Subject to Social Insurance Enrollment
Full-time Employees
Mandatory enrollment regardless of nationality, income, or status.
Part-time Employees
Required if working at least three-quarters the hours/days of full-time employees or meeting all the following criteria:
- 20+ working hours/week
- Expected employment over one year
- Monthly wage over 88,000 yen
- Not a student
- Company employs 501+ workers
Exemptions under Social Security Agreements
Nationals from countries with social security agreements paying insurance in their home country may be exempt. Details at the Japan Pension Service.
3. Mandatory Enrollment in Labor Insurance
Mandatory for all employers (corporate or individual) employing at least one worker, regardless of employment type.
Employment Insurance Exceptions:
- Working 20 hours or less per week.
- Employment period under 31 days.
Summary and Recommendations
Japan’s social insurance system can be complex. It’s crucial to understand the basics outlined here and consult with certified labor and social security attorneys (社会保険労務士) for detailed guidance, especially if pursuing permanent residency or hiring foreign skilled workers.
About the Author
Masakazu Murai (村井将一)
Immigration Lawyer (申請取次行政書士), CFP, and Certified Securities Analyst with 18 years of investment banking experience at Mitsubishi UFJ Morgan Stanley Securities.
Specializes in immigration and financial consulting.