Self-employed to Company
Posted: Tue May 10, 2022 5:48 am
Hello,
I’m looking for some advice on whether to change from operating as self employed to opening a company in Japan.
The business is currently set up with my Japanese spouse registered as self-employed with myself as a salaried employee. We both work equally on the business.
We plan to expand the business more this year and estimate in 2022 to have a turnover of more than 10 million yen.
Some benefits to opening a company that I can see are:
1. Can work together easily with other Japanese companies
2. Reduce liability
3. The structure is fair for both my spouse and I
4. Tax rate may be lower compared to self employed
5. Rate for project work might be higher (We’ve been told before by some Japanese companies, if we are a company they pay more)
Downsides to setting up a Japanese company:
1. The fee I have been quoted by my accountant is 800,000 yen to set up the company and manage it for 12 months (200,000 yen to set up the company and 50,000 yen monthly fee).
Another point to note is that this business is 100% online and can be operated from anywhere. With the high tax rates in Japan, language challenges and crazy expensive accounting fees compared to my experience of running a company in the UK, I am also considering opening a corporation in a different country with a lower corporation tax rate and operating the business through that. Does anyone have any experience with this while being a resident of Japan?
I’m interested any insights or advice. Also if anyone knows of an English speaking Japan-based business consultant, it would also be helpful.
Thanks!
I’m looking for some advice on whether to change from operating as self employed to opening a company in Japan.
The business is currently set up with my Japanese spouse registered as self-employed with myself as a salaried employee. We both work equally on the business.
We plan to expand the business more this year and estimate in 2022 to have a turnover of more than 10 million yen.
Some benefits to opening a company that I can see are:
1. Can work together easily with other Japanese companies
2. Reduce liability
3. The structure is fair for both my spouse and I
4. Tax rate may be lower compared to self employed
5. Rate for project work might be higher (We’ve been told before by some Japanese companies, if we are a company they pay more)
Downsides to setting up a Japanese company:
1. The fee I have been quoted by my accountant is 800,000 yen to set up the company and manage it for 12 months (200,000 yen to set up the company and 50,000 yen monthly fee).
Another point to note is that this business is 100% online and can be operated from anywhere. With the high tax rates in Japan, language challenges and crazy expensive accounting fees compared to my experience of running a company in the UK, I am also considering opening a corporation in a different country with a lower corporation tax rate and operating the business through that. Does anyone have any experience with this while being a resident of Japan?
I’m interested any insights or advice. Also if anyone knows of an English speaking Japan-based business consultant, it would also be helpful.
Thanks!