So, you’ve been living and working in Japan for a few years. Maybe you’ve been teaching English to Japanese school kids in Japan’s public schools, or maybe you’ve been teaching to salarymen and housewives at an eikaiwa school. Maybe, you work at the Tokyo or Osaka branch office of a foreign-based IT company. Maybe none of the above apply to you. No matter; You’ve been wanting to have your own business in Japan for awhile now. However, you’ve been having trouble finding good, accurate information on how to get started.

If you’re looking to start your own company, you’ll have to register it. By all accounts, this is not a simple process and costs a fair bit to do. And, if you plan to run the business yourself, you’ll need an “Investor/Business Manager” visa. Immigration doesn’t hand these out to just anyone; Important documents like a professional-looking business plan are required at the time of application. For more information, check out the website for JETRO (Japan External Trade Organization).

For those looking to start a small private business, like an eikaiwa school or import/export business, there’s a simpler way to get it off the ground; You can register it as a sole proprietorship. A sole proprietorship (kojin Jigyo - 個人事業) is a one-man business that can be started by anyone at any time in Japan. Those little yakitori stands or mom & pop shops you always pass in your neighborhood are usually sole proprietorships. Registering a sole proprietorship is easy; it can be done by filing a special blue form called a kojin jigyo no kaihaigyo todokedesho (個人事業の開廃業等届出書) at your local ward/town/city office; No need to go through the hassle of registering a company.

Of course, you’ll have to keep careful records and submit an annual tax return to your local tax office. Since the forms can be somewhat complicated, many people opt to use a tax professional to help them get their paperwork in order.

As for where to conduct your business, you can rent office or store (jimusho - 事務所 or tenpo - 店舗) space, or you can conduct business at your residence. If you want to do the latter, you’ll have to secure permission from your landlord. For a simple import/export business run out of a private residence as a sole proprietorship, the overall start-up cost promises to be quite low. A small, private eikaiwa school run in a private residence would likely be even cheaper.

There is, however, one major thing to consider here; As a foreigner, you need a proper work visa to remain and work in Japan. If you have an employer that continues to sponsor a work visa for you, that’s great. But, it’s hard to run your own business while working full-time. That’s why it’s recommended that you start your sole proprietorship as a limited part-time operation at first. Once you’ve built up a fairly successful business, you might be able to convince the folks at immigration to give you the visa you need to run your business full-time without worrying about maintaining other employment for the sake of visa sponsorship.

I hope this little article has helped some of you interested in starting your own business here in Japan. Please, by no means consider me an expert on running a business in Japan. I, like many of you, am planning to start my own business in the near future. I just feel that there isn’t much in the way of clear, organized, and easy-to-understand information out there and I thought I’d put what I know on the subject here in the hope that it will help someone start looking in the right direction. For more on the subject, Danny Choo has a nice little post about his experience with sole proprietorships.

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