Bank Account for Capital Payment When Setting Up a Company in Japan

In our previous article, we explained the different business structures available when foreign companies expand into Japan, such as subsidiaries, branches, and representative offices.

After choosing the most suitable company structure based on your business plan and future growth, the next important step is the company incorporation process.

One of the key points in this process is preparing a bank account for paying in the share capital.

　Why a Bank Account is Required?　　　　　　　　 　　　　

When establishing a company in Japan whether a Kabushiki Kaisha (KK) or a Godo Kaisha (GK), you must prove that the registered capital has actually been paid in.

To do this, the capital must be transferred to a bank account, and this payment record is required for company registration.

　Common Issues for Foreign Founders 　　　　　　　

For foreign nationals, especially those living overseas, opening a Japanese bank account can be difficult. Foreigners who already live in Japan on a mid- to long-term visa usually have a Japanese bank account. However, foreigners living overseas normally do not have a Japanese bank account.Japanese banks generally do not allow bank account opening for short-term visitors.

Because the capital must be paid into a personal bank account of the incorporator before the company is established, it is not possible to proceed if no bank account is available.

　Using a Local Cooperation Partner 　　　　　　　

f an overseas resident does not have a Japanese bank account, a common practical solution is to involve a Japan-based cooperation partner.

In many cases, this person temporarily becomes:

• an incorporator, or

• a director at the time of incorporation

and allows their personal bank account to be used for the capital payment.

Due to recent legal changes, if all incorporators and initial directors live outside Japan, it is now exceptionally possible to use a bank account belonging to a third party who is not an incorporator or director.

However, even in this case, someone must still agree to provide their bank account.

Please note that if no director resides in Japan, practical issues may arise later, such as:

• difficulty signing real estate lease contracts

• delays in opening a corporate bank account after incorporation

　Timing of Capital Payment　　　　　　　　　　　　　　　　

If the money is transferred before notarization, it cannot be clearly determined whether the funds belong to the individual or are intended as company capital. For this reason, capital payments made before notarization are not accepted.

As a general rule, the capital is transferred only after the Articles of Incorporation are notarized.

If you are sending the capital from overseas, please make sure to plan your transfer schedule carefully.

Standard Process:

The typical incorporation process is as follows:

1. Prepare and notarize the Articles of Incorporation

2. Transfer the share capital to the incorporator’s personal bank account

3. Prepare documents proving the capital payment

4. Submit the company registration application

Important Note

⚠️ Even if there is already money in the bank account and no new transfer seems necessary, you must withdraw the funds once and then transfer them again after notarization.

The rule is that the capital must be paid after notarization, and this is confirmed based on the date of deposit.Funds that were already in the account before notarization are not considered capital, even if the amount matches the required capital.

To remember easily:

“On or after the notarization date of the Articles of Incorporation.”

　Can the Capital Be Used Before Applying for a Visa?　　 　

Yes. Once the company has been officially incorporated, the capital that was paid into the personal bank account can be used for business purposes.

For example, if a company is established with JPY 30,000,000 in capital, there is no rule that the bank balance must always remain at JPY 30,000,000 or higher.

Even before applying for the Business Manager Visa, the capital may be used for necessary business expenses, such as:

• equipment and machinery,

• office rent,

• staff salaries,

• advertising and marketing costs,

• other expenses required to operate the business

As long as the company has been properly established, using the capital for legitimate business activities is allowed.

　Important Points When Sending Capital from Overseas　 　　

When sending capital from overseas, for example, when funds are transferred by family members or related parties in your home country, it is important to consider bank transfer fees and currency exchange fees.

With international transfers, it is common for several thousand yen to be deducted as fees. If you send exactly the same amount as the registered capital stated in the Articles of Incorporation, there is a risk that the received amount will be less than required.

For this reason, even if the capital is JPY 30,000,000, it is recommended not to send exactly JPY 30,000,000, but to a slightly higher amount to cover fees.

For example, sending around JPY 30,200,000 provides a reasonable buffer and helps avoid problems.

There is no issue if the amount received is more than the registered capital of JPY 30,000,000.

However, if the received amount is JPY 29,990,000 due to fees, the capital is considered not fully paid, and the company incorporation process cannot proceed.

In addition, international bank transfers may take several days, so it is important to plan the transfer in advance while considering the schedule for notarization of the Articles of Incorporation and company registration.

　Summary　　　　　　　　　　　　　　　　　　　　　　　　

When foreign companies or overseas residents plan to establish a company in Japan, preparing the bank account for capital payment is one of the most important steps, as it can greatly affect the overall incorporation process.

Depending on the bank account situation, capital transfers may not proceed smoothly, and in some cases, the entire company setup can be delayed.

In addition, when capital is sent from overseas, there are several points that should be considered in advance, such as transfer fees, exchange rate differences, and the time required for the funds to arrive.

To ensure that the full capital amount stated in the Articles of Incorporation is received, it is important to send a sufficient amount and manage the schedule carefully.

To proceed smoothly with company incorporation in Japan, practical preparation from an early stage is essential. This includes decisions about how cooperation partners are involved and the proper timing of capital payment.

At Royal Office, we provide practical support for company incorporation procedures, tailored to each client’s individual situation.

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