Can I establish a company with only non-resident foreigners and open a bank account in the name of the company?

Barriers to commercial registration for non-resident foreigners and foreign companies establishing companies in Japan have been eliminated one after another, in Notice No. 29 of the Civil and Commercial Code dated March 16, 2015, the previously required requirement that at least one of the representative directors must have an address in Japan was eliminated, and under the Civil and Commercial Code No. 41 notification dated March 17, 2017, the requirement was relaxed, stating that “the account holder of the bankbook in which the investment is paid in may be a person other than the promoter and the founding director, only in the case that all of the promoter and the founding director do not have a domicile in Japan. As a result of these changes, it is now possible to incorporate a company even if the representative director and all promoters are non-residents and none of them has a bank account in Japan. However, the aforementioned companies face high hurdles when trying to open a corporate bank account. This is because even in the case of opening a company account, there is the step that “identification of the representative or the beneficiary owner is required” in addition to identification of the company itself. Identification documents such as driver’s license and resident card are required to verify the identity of individuals. In many cases, when the representative director and all promoters are non-residents, they are unable to provide these identification documents, making it difficult to open a corporate account unless there are special circumstances.

Incidentally, it is similarly difficult for non-residents to open a personal account, and even when they can, they are not allowed to open an account other than a non-resident yen deposit account. These are due to the requirements of the Law for the Prevention of Transfer of Criminal Proceeds and the Financial Action Task Force (FATF), etc., and seem to have become stricter in recent years. If you cannot open a bank account, it will be difficult to operate your business. You will not be able to transfer funds to and from your home country, and you will not be able to deposit or withdraw money from your business partners in Japan. Some banks, such as online banks and Japan Post Bank, are relatively easy to open, but it is preferable to have an account at a city or regional bank to ensure smooth transactions with Japanese business partners.

So how can we do this? Although it has become easier for foreign nationals to establish a company, it would be safer to continue as before: “One of the representative directors must be a resident of Japan, a resident of Japan must initially be a shareholder, and shares will be transferred only after an account has been opened. Regardless of whether there are residents or not, the entity of the company should be prepared, as the bank will often ask for documents proving the company’s business activities (lease agreement for the head office, business plan, company brochure, invoices from suppliers, etc.) in advance.

By the way, on February 7, 2023, the Financial Services Agency issued a document titled “Provision of Financial Services to Foreign Entrepreneurs Utilizing the Foreign Entrepreneurship Promotion Program,” requesting banking associations to “provide resident accounts or accounts equivalent to those of residents to those who have received a certificate of confirmation of a plan to prepare for entrepreneurial activities from an organization promoting foreign entrepreneurship and have been granted residence status (specified activities) and who have requested an account opening transaction before six months have passed since their entry into Japan. We are going to keep a close eye on future developments.