We've all been there: filled out what we thought were all the forms and brought them along to the bank only to be told after an hour's wait that there’s a minor discrepancy or something missing and we have to make another appointment. Cue: purple face and impotent gaijin apoplexy.
So why is banking in Japan so difficult?
So why is banking in Japan so difficult?
Paper remains king and hand-written forms are necessary for every transaction. Queues are often long, as are wait times. No wonder there are stacks of magazines to help while away the wait time. Such passion for paper is largely a legacy of bureaucratic bank culture.
Japan was previously pretty lax in terms of the so-called "know your customer" requirement. However, due to the proliferation of well-advertised fraud schemes over the past ten years or so, banks have been getting tougher. One of the more well known schemes that targets the elderly is the "Ore Ore" ("It's me, it's me") ruse whereby a charlatan will call up a random unsuspecting granny and pretend to be their estranged grandchild. Surprise, surprise, said supposed grandchild happens to be in trouble and guess what? He needs money urgently. Doting grandparent duly makes a transfer to fraudster's account and the money is never to be seen again. You have been warned.
So banks are getting tougher, which is no bad thing, but it makes for more paperwork and potential frustration.
Opening a bank account is the beginning of your social life in Japan, so let's start here. And if you're looking to run a business, having a corporate account is obviously one of the first key steps you need to take.
So let's look at some of the common pitfalls in trying to open a corporate bank account in Japan.
- Insufficient capital
The minimum legal capital requirement can be as low as ¥1. However, in order to open an account, banks often require far more than this—certainly enough to ensure your survival
- Lack of business substance
If you are looking to open a corporate bank account with a Japanese mega-bank, you may need to submit an office lease agreement to prove that your business has substance, so if you're operating out of a shed you may find your application denied.
- Unclear business objectives
It's common practice when incorporating a business in Japan to fill the teikan (articles of incorporation) with every business under the sun in order to prevent the need to return to the law office in the future to get them changed. Very sensible approach. However, this can sometimes make banks suspicious of your intentions, so make sure your home page and business plan are consistent with the articles.
Finally, here is our guide to the different types of banks in Japan. You should choose the one that best suits your business. And beware: an ability to operate in English is not their forte!
- Mega banks
Having an account with a mega-bank affords your company a certain status and their extensive branch and ATM networks are very convenient. The flip side is that their charges tend to be high and they are the most onerous in terms of opening an account.
- Regional banks
Regional banks tend to be relatively small business friendly. It's easier to open an account and borrow money from them. The downside is that they have a limited branch and ATM network.
- Internet banks
Internet bank charges are cheaper than the mega and regional banks and you can do transactions 24-hours a day. It is also easier to open a bank account. The disadvantages are that their credibility may be the lowest among three types and they usually do not provide loans for you.
- Application to open the bank account
- Copy of a registration certificate
- Verified article of corporation
- Corporate stamp certificate
- Representative stamp certificate
- Stamp for bank account
Fraud scheme utilizing the bank account / 振り込め詐欺 (Furikome sagi)
Capital / 資本金 (Shihon kin)
Office lease agreement / 賃貸借契約書 (Chin tai shaku keiyaku sho)
Articles of corporation / 定款 (Tei kan)
Copy of a registration certificate / 登記簿謄本 (tou kibo to-hon)
Stamp certificate / 印鑑証明 (Inkan sho-mei)
Checking account / 当座預金 (tou za yo kin)
Saving account / 普通預金 (Futsuu yo kin)
If you have any questions, need more information or would like to have a chat regarding the ins and outs of bank accounts, please contact us by e-mail or direct line at 03-6805-1926. We're here to help.