How to Open a Company Bank Account in Japan
- The company is owned by legitimate shareholders who are real people and not part of a larger illegitimate or illegal structure.
- The company’s directors are genuine business-people with experience in, and detailed knowledge of, the company’s business.
- The company has a physical, not virtual, office.
- The company has a justifiable business.
- The company is adequately and legitimately funded to perform its business.
- As the first step, the company completes an online application form (in Japanese), including uploading pertinent supporting documents. None of the major banks presently accept walk-in applications and if attempted, will probably politely point the applicant to the online application portal.
- The bank’s branch closest to the company’s registered address reviews the application and after 2 – 3 weeks will either: (1) decline to open the account, (2) request further documents, or (3) request an in-person visit to the bank. If it declines the application, the bank will not give any specific reasons for its decision and will decline to answer any questions regarding it.
- Assuming the bank requested an in person visit, either the company’s representative director or ordinary director, or a knowledgeable and credible employee, should attend. The meeting will be in Japanese, so for non-Japanese, language skill or an interpreter is essential.
- Assuming the bank is satisfied with the answers it receives at the in person meeting, it will open the account.
The process usually takes 4 – 6 weeks to complete.
- Shareholders. Shareholders of privately-held Japanese companies are not public record, so the bank will request details of each shareholder and, if a shareholder is a corporation, details of its ultimate beneficial shareholders. We recommend full disclosure upfront, because the bank will decline an application if it suspects the applicant is attempting to hide any shareholder’s true identity.
- Directors. As noted above, a KK or GK company does not need any resident directors, but the lack of one can cause a bank to decline to open a bank account. The bank’s concerns are: (1) if all directors are non-resident, it could be they intend to use the bank account to funnel money into (or out of) Japan for illegal purposes while evading the possibility of detention in Japan, and (2) more simply that there will be no local director the bank can talk with if issues arise with the account.
- Employees. If there are no resident directors, but the company has a senior experienced local employee who understands the company’s business in detail, the bank is likely to overlook the absence of resident directors. The emphasis is on senior and experienced; in our experience, putting a young and relatively inexperienced local employee in the in person meeting with the bank will probably result in the bank declining the application.
- Office. Banks tend to be very suspicious of companies registered at virtual office addresses, mainly because: (1) leases for such offices are month to month and easily ended, and (2) the company will have no infrastructure (desks, office equipment, etc.) invested in the office, meaning there is nothing to anchor it there. A virtual office address gives the bank a strong sense of a company’s lack of commitment to its business and, unless other factors convince the bank otherwise, it will probably reject an application to open a corporate account.
- Collateral. Even with a virtual office address and without a resident director or local employee, it is possible the bank will accept an application if your Japanese company can provide very strong collateral. For example, some of our clients are multinationals with hundreds of millions of dollars annual revenue, with excellent banking relationships in other territories, and with very strong business plans and investment strategies for their Japanese business. Even though (for corporate governance reasons) they have no resident directors in Japan and are in the pre-hiring phase using a virtual office address, they successfully opened bank accounts because their global credentials are so strong. If your Japanese company can provide very strong supporting collateral to the bank, it is possible that even with other factors being negative, the bank will accept the application to open a corporate account.