
Entrepreneurs who want to
open a company in Japan should know that this requires appointing an individual as a director. Even though sometimes there are no legal residency requirements for the
nominee director in Japan, utilizing a foreign resident could make it difficult to do business in Japan. In this article, our
company formation consultants
in Japan present you a few aspects related to
nominee directors in Japan.
Changes in the local legislation in Japan
The business environment in Japan has changed so much in the sense that it became more international and because the new technology enables individuals to be in several places of the world at one time, that it has resulted in a growing pressure and demand for local businesses to be able to incorporate under the Japanese legislation without having a local nominee director.
Therefore, the officers of the Ministry of Justice announced in 2015 that the
company registration practice
in Japan used until then would be abolished, and that the Legal Affairs Bureaus would accept applications for the establishment of
share (KK) company without having to present a local
nominee director in Japan.
The abolition of the local nominee director requirement does not apply to branches of foreign entities in Japan. The Companies Act clearly rules that a branch of a non-Japanese company must have at least one nominee director who resides in the country.
Because this is a clear statutory requirement, it cannot be abolished by an administrative decision of the Ministry of Justice.
When is local residency required for nominee directors in Japan?
Nevertheless, the local residency is required for nominee directors in Japan for two main reasons:
1.
The initial incorporation of a company in Japan necessitates proof of capital to be demonstrated in a personal local bank account of a director or of the shareholders, which could be difficult for businesses with non-
Japanese nominee directors. Our
Japan company formation agents can provide more information related to this matter;
2.
The local companies and banking institutions could be hesitant to deal with businesses with foreign
nominee directors, since there would be no authoritative person on the
local scene to be held responsible for company negligence.
In case you need to know more about
who can be a nominee director in Japan, or for assistance related to
setting up a company in Japan, please
contact our friendly team.