A business start-up as a sole trader

Japanese business start-up consultant

I used to work as an adviser at Tokyo One-Stop Business Establishment Center. Many foreign nationals came to seek legal advice on how to set up a company in Japan, especially in Tokyo.

 

Setting up a company is an option to do business, but working as a sole trader is another option. A sole trader is a business that is owned and run by one person. There is only one owner, but they may have employees who work for them. Sole traders are usually start-ups or small businesses. Sole traders have unlimited liability and the owner is personally responsible for the debts of the business. A sole trader pays income tax on their earnings.

 

A sole trader calculates the amount of income earned during the year from 1st January to 31st December of each year and the amount of income tax, and must file a tax application form at a tax office between 16th February and 15th March of the following year.

 

It has the risk of unlimited liability and there is a high level of responsibility for the business owner, but it is quick and easy to set up and has low set-up costs.

I hope the information is useful.

I will update every Monday.

For more information

Japanese business consultant

Shihoshoshi Lawyer

(Judicial Scrivener)

Akiko HORI

https://lawhelp4u.com/english/legal-advice-for-business-in-japan/

 

 

Realising women’s potential in business

My father’s family owns a business, but I grew up in a very ordinary family environment, because my father didn’t succeed in his family business and was employed by a company and my mother is a housewife. When I got married, I had no idea about taking more than a part-time job just to kill time, and I had never thought about a “business”.

 

I’m a Shihoshoshi Lawyer now, but I wish I had worked harder in that banking-related environment when I was working at a bank. However, as I always tell my child, “Failure is never a bad thing”. “The problem is what results those mistakes leave behind”, but I should think about what the reasons were for my mistakes and learn from them and apply them to my decision-making process in the future.

 

I think the percentage of women in management positions in Japan is still low, compared to other countries. There is no need to feel sad about the low rate because it reflects the past, and there are no 100% perfect methods in life. We should focus on the factors to consider when thinking about what to do in the future.

I decided I could turn the energy and positivity I was experiencing into my own business. I am working tirelessly to support everyone wanting to unleash their full potential with the “Ideas-turned-business” perspective, and how the Japanese legal system is used for those purposes.

 

I will update every Monday.
For more information

http://lawhelp4u.com/advice/
Japanese business consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

Work life balance and Japanese bank holidays

Today(10th August, 2020) is a bank holiday, called Mountain Day in Japan. It is a public holiday stipulated by the Article 2 of the Act on National Holidays, and according to the law, there are 16 days of public holidays a year in Japan. https://elaws.e-gov.go.jp/search/elawsSearch/elaws_search/lsg0500/detail?lawId=323AC1000000178

The number of public holidays in the UK, where I lived in the past, is 8 days a year. https://www.gov.uk/bank-holidays

I often feel that there are too many bank holidays in Japan, and when I find that Japan has twice as many bank holidays as the UK, I think to myself my feeling is right.

I have made a comparison of the number of bank holidays in the UK and Japan, so let’s take a look at some of the cultural differences related to holidays. As a reader of this blog, you may relate to Japanese society, and you may also hear that the Japanese people don’t take a day off work unless it’s a bank holiday.

In my experience, colleagues go to work even though they have a fever or a bad cold. Ever since I started to be self-employed, I’ve been thinking that they don’t need to push themselves too hard about going to work, but many of them I know go to work anyway. Then, if their condition gets worse, they would go home. However, it is likely for them to stay in their office until 5 or 6 pm. The background to this attitude, on the positive side, is that it is an expression of a sense of responsibility that they shouldn’t inconvenience other colleagues, but on the negative side, the old practice of “traditional loyalty” still exists in Japanese society.

I hope that the attitude above will be changed soon because of the recent Covid-19 pandemic.

On the other hand, when I talk to friends from Britain about this matter, their typical attitude is that “No way!”. Then, they ask next how many days of holiday Japanese workers have. The answer is about a week. When I answer like that, they definitely say that that is not a holiday at all. At least a month of annual holiday is needed. I’m sure that Japanese culture has certain strengths, but I personally hope, as my British friends say, that the standard holiday entitlement should be at least a month.

In addition, in Japan, there is a custom, called “OBON” (お盆), to welcome the spirits of ancestors from the afterlife to return for a few days in the middle of August. It will be from 13th to 16th August in 2020. This custom is regarded as a Buddhist one, but a memorial service has been held once or twice a year to honor the spirits of ancestors since ancient times of Japan. “OBON” is an event that integrates ancient Japanese customs and Buddhism ones.

Note to self, “OBON” is not a bank holiday, so council offices and banks are open for business as usual.

I will update every Monday.
For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

https://lawhelp4u.com/advice/

Comprehensive Estate Planning

Japanese business start-up consultant

As for the current real property trend in Japan, the number of relatively large-scale real property investment projects by wealthy people in Asia has been increasing.

The aging population and the COVID-19 pandemic has affected the Japanese economy. The government should maximise savings through rapid rationalisation of the estate and the reuse of previously developed land. For example, restructuring public property stock and exploiting surplus government land and buildings contribute to economic growth.

https://www.mlit.go.jp/common/001229088.pdf

Since such cases are intricately connected to the legal issues, a project may not be possible unless the underlying Japanese legal system is understood.

I believe that it is even more important to look at the articles of the relevant laws and precedents with a fresh feeling, and keep up networking with peers and other professionals.

Even if a client is an alien, it is no different from normal work, but it is important to understand what they want to achieve because they might not fully understand the Japanese system and the roles of experts. Clients often talk on the premise of their own system, and it is necessary to explain the Japanese system plainly and clearly. The important thing is to carefully listen to what kind of business the client wants to do. Empathy is essential.

In addition, if the contents of their request is outside the scope of my work, connecting to appropriate specialists is necessary in order for a smooth business operation.

I hope the information is useful.
I will update every Monday.
For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

 

https://lawhelp4u.com/propertyJapan/

Real property in Japan and Highly-Skilled Foreign Professionals

Regarding restrictions on foreign ownership of real property vary from country to country, but Japan is a country which falls into the unregulated category.

Up to now, with respect to the purchase of real property in Japan, the number of people who purchase real property in Japan has steadily increased because of the Tokyo Olympics and the weaker yen.
Popular options are to own apartments or commercial buildings in central Tokyo,  and resort properties in Niseko, Hokkaido.

In Japan, there are no restrictions on non-Japanese purchasing real property regardless of their immigration status, such as permanent residence, nationality, or visa type. The taxation for non-Japanese has no difference from the one for Japanese.

There is no time limit on owning real property, an owner can be freely bought and sold, and can be inherited. However, importantly the inheritance tax or estate tax should be considered.

In principle, there is no visa, such as Tier 1 investor visa (UK) or EB-5 Immigrant Investor Program (US). However, if you have a rental property in Japan with stable income, there is a possibility to be granted permanent residency under the “Highly-Skilled Foreign Professionals” system.

The problem would be a language barrier, but please feel free to contact me in English when buying or selling real property in Japan.

“Highly-Skilled Foreign Professionals”
(高度人材ポイント制)

JPN

http://www.immi-moj.go.jp/newimmiact_3/

ENG

http://www.immi-moj.go.jp/newimmiact_3/en/index.html

I hope the information is useful.
I will update every Monday.
For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

https://lawhelp4u.com/propertyJapan/

The process of buying real property in Japan

Japanese business start-up consultant

Step 1.
The intending seller appoints a real estate agent and the intending purchaser looks for a suitable property through an agent. The real estate agent can either act for both seller and buyer or just the seller.

 

Step 2.
Once the buyer finds a suitable property, they conduct their own due diligence, including whether the price is fair. The intending purchaser (or agent) sends a Letter of Intent as part of the negotiation of price. This is not legally binding.

I provide consulting services for the purchase and sales of real property in Japan.

I research the registration of both company and property on the official record basis, and report it in English. When required, I research the recent property record from the website below.

Public transaction record is available in English.
https://www.land.mlit.go.jp/webland_english/servlet/MainServlet

 

Step 3.
Once the price and any other conditions are agreed, a Real Estate Purchase and Sales Agreement and an Important Disclosure Statement for the property will be prepared by the seller. Broadly speaking, the parties are free to draw up a contract in any form they choose. The buyer should arrange to have the deposit 10% of the purchase price ready for when the contract is signed.

 

Step 4.
The buyer and seller (or authorised agents) sign the contract, which will specify a date for settlement of the balance of payment. The Important Disclosure Statement will be provided either at this time or some time before settlement.

 

Step 5.
On the Settlement date, the impartial Shihoshoshi lawyer deals with the property rights transfer and the outstanding balance of the purchase price (and any costs) is settled. The seller will also hand over various original documents related to the property. It is also possible for the buyer to appoint their own lawyer

I make sure that the transfer of real property on agreed terms is carried out correctly.

I hope the information is useful.
I will update every Monday.

For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)

https://lawhelp4u.com/propertyJapan/

The purpose of the property registration system in Japan

Japanese business start-up consultant

The purpose of the property registration system in Japan is to secure the rights to real property by providing for a registration system to be made to notify the public of real property descriptions and rights, thereby contributing to safe and smooth conduct of transactions.

 

In terms of safe and smooth property transactions, the kind of right that is established in the property is crucial, so the property registration system provides the information concerning property rights below specifying description of the property, the full name(s) of the person(s) and address(es).

1. Ownership
2. Superficies (Surface rights)
3. Farming right
4. Easement (servitude)
5. Priority privilege (Statutory lien)
6. Pledge
7 Mortgage
8. Right of lease
9. Mining right (Right of quarrying)

Registration identification is issued when a holder of a registered right files an application for real property rights, which an identification code is provided in order to confirm that said registered right holder files an application for the registration, with which the registered right holder can be identified.

You can search the property registration.

https://www1.touki.or.jp/beginner/index.html
However, the information is only written in Japanese.
I provide a professional translation services in real estate industry and legal documents.

Akiko HORI

I hope the information is useful.
I will update every Monday.
For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)

https://lawhelp4u.com/propertyJapan/

Tokyo Today : Population Trends in Chiyoda, Chuo and Minato

At the moment, the worldwide economy has been badly damaged by the Covid-19 pandemic. However, as long as people exists, the business never stops.

In the centre of Tokyo, there is always a lively atmosphere because there are many offices and commercial facilities and a lot of people come to work and go shopping in the city. In recent years, the number of residents has been rapidly increasing and it is becoming more active for day-to-day consumption. The graph below shows Population Trends in the three central cities of Tokyo (Chiyoda, Chuo and Minato). The graph is based on the rate of change of population from 2002 to 2019 (Each year is based on October 1st). The total population of Japan was about 126 millions in 2019, in comparison to about 127 millions in 2002, which is about 1% decrease. However the three cities of central Tokyo (Chiyoda, Chuo and Minato) have quite different circumstances. The graph shows the clear difference when comparing three cities with the percentage of Japan as a whole. The main factors are the large supply of apartments at a reasonable cost, combined with every convenience and a well-equipped urban infrastructure.

As such, now is the perfect time to change things for the future investment.

I will update every Monday.

For more information

Japanese business start-up consultant

Shihoshoshi Lawyer

Akiko HORI

http://lawhelp4u.com/propertyJapan/

Estate and Succession planning – 1-7. Making a will Part 2

Japanese business start-up consultant

3. Jurisdiction and applicable law in Succession

 

In Japan, the article 37 of the Act on General Rules for Application of Laws is applied for wills and succession. Article 37 states that the formation and effect of a will shall be governed by the national law of a testator at the time of the formation. Concerning this provision, ‘the formation and effect of a will’ means only matters concerning the transmission of wills, such as the mental capacity, defective evidence of intention, effect of a will or validity of a will. When the will comes into effect at the time of death, the contents of the will, including maintenance obligations arising by reason of death is determined by article 36 of the same law.

Under the Act on the Law Applicable to the Form of Wills, both the governing law of the will (article 37) and the inheritance (article 36) are stated to be the national law, but there is a time gap between the will at the time it was established and the inheritance. If the nationality of the person is different between the time of making the will and at the time of death, the governing law might be different. To avoid the confusion, as a practical matter, a testator can choose which law governs succession to their estate.
In addition, when acknowledging a child or putting an estate in the trust under a will, article 29 (Formation of Parent-Child Relationship with Child Born Out of Wedlock) or article 7 (Choice of Governing Law by the Parties) of the same law is applicable.

As well as the Act on General Rules for Application of Laws, there is the Act on the Law Applicable to the Form of Wills, which was created by ratifying the Convention of The Hague Conference on Private International Law in 1961.
Under the Act on the Law Applicable to the Form of Wills, a formally prepared will becomes valid as long as it complies with the law of the place where the will is established, of the country where the testator has nationality, of the place where the testator had domicile, of the place where the testator had habitual residence or the law of the place where the real property is located.

 

4. Advice

This selective listing of a large number of laws in the Act on the Law Applicable to the Form of Wills allows a statutory will as far as possible, and most wills made under the law of the place where the testator resides will become valid in most of cases. However, in practice, a will which follows the methods of Japanese law is prepared separately in many cases in order to carry out the post-death administrative procedures for Japanese estate smoothly.
It is possible for an individual to make a will for themselves, but that is not without its risks. There might be technical issues that potentially could go wrong. If there are any errors, these could cause problems after the death. I can advise on arrangements for a will, and highlight potential problems that might arise.

I hope the information is useful.

I will update every Monday.

For more information

Japanese business start-up consultant 

Shihoshoshi Lawyer

(Judicial Scrivener)

http://lawhelp4u.com/advice/

http://lawhelp4u.com/propertyJapan/

Estate and Succession planning – 1-7. Making a will Part 1

Japanese business start-up consultant

1. Historical Background

In Japan, since the Middle Ages, the custom was not only for the firstborn legitimate son to inherit most of his parent’s estate, which was generally the case, but also for the eldest girl or youngest son to succeed to and maintain the family business, such as farm fields or business rights.

In the modern era, when an estate was considered as the sum of a person’s assets, the inheritance process was regarded as one of the division of an estate between a small range of close relatives, such as a person’s spouse and their children or parents. Therefore, the principle is that the sum of a person’s assets is distributed equally to the heirs of a certain rank.

As in France and Germany, the Japanese laws have definite rules on who will receive most of a deceased person’s estate, whether there is a will or none, but there is the freedom of making a will.
In addition, there is a system of legally secured portions for certain legal heirs in order to harmonise the legal inheritance rules and the freedom of making a will.

 

2. Legal heirs and the inheritance process under the Japanese law

In Japan, a deceased person’s legitimate surviving spouse will always be their heir, but will only be their sole heir if there are no legal heirs in the first, second or third ranks. Legal heirs in the first rank are the children, lineal ascendants (parents, grandparents, etc.) are in the second rank, and the deceased person’s legal siblings are in the third rank. Heirs of the second rank only inherit if there are no heirs of the first rank, those of the third rank only if there are none of the first two ranks.

If there are several people in the same rank, their portion will be divided equally among all those in the same rank. There is no legal distinction between a biological child or an adopted child or by gender, and even if they become married or adopted, they will still be heirs.

If a deceased person’s child dies before them, and if the child has a child (a grandchild for the deceased person), the grandchild is entitled to inherit and will have the same rank as a living child of the deceased person. Furthermore, if the grandchild also dies before the deceased person, and if the grandchild leaves their child (a great-grandchild for the deceased person), the great-grandchild will be one of the deceased person’s heirs. If the deceased child has several children, they share what would have been their parent’s share equally, and the same principle applies to the children of a deceased grandchild.

If there is no child at all, a deceased person’s lineal ascendant (parents, grandparents, etc.) as the second rank becomes the heir. Amongst lineal ascendants, the heirs will be close relatives (parents will be heirs if there are parents and grandparents). If there are biological parents and adoptive parents, both can be heirs as the same rank.

If there is no lineal ascendant, legal siblings become the heirs as the third rank. Legal siblings mean children who have shared at least one parent in common either by blood or adoption. However, if the legal siblings have shared only one parent in common, their share in the inheritance is one half of the share of a sibling who shares both parents. In addition, in this case, if the siblings who are supposed to be the deceased person’s heirs die before the deceased person, only their child (the deceased person’s nephew and niece) can succeed the third rank of heirs, and not the nephew’s or niece’s child.

If it is not clear who is a deceased person’s heir, the family court will conduct a legal procedure. Under this procedure, an executor for the succession who is appointed by a family court, and will search for the deceased person’s heirs under the family court’s supervision, and deal with matters of succession. If no heirs can be found, the deceased person’s estate may be distributed to those who have physically lived together with the deceased person, such as de facto partner or children, or the family court may consider special circumstances respectively. If there is still any remaining estate, it will become national assets.

An estate consists of various assets such as money, land, movables and loan claims, and the methods of division amongst their heirs is called the inheritance division. If the deceased person determines the method of this division by their will or entrusts their assets to a third party, the division will be followed by the method chosen. If there is no such determination, their joint heirs will decide the method. If no agreement amongst heirs is possible, a family court will be involved. The family court carries out the inheritance division in consideration of the type and nature of the estate, rights relating to the assets and any other circumstances.

To Be Continued.

I hope the information is useful.

I will update every Monday.

For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

https://lawhelp4u.com/propertyJapan/