RetireJapan

Hi!

I am 18, and me and a partner are trying to set up a service in Tokyo.

The service has little to no overhead, and is trying to run on as little capital as possible as we are students.

The model is that we hire several part time workers, who get payed by commission, and we take a small (500 to 1000 yen) margin on each session.

We are asking for advice on if we need to declare this as a business, or if we are legally allowed to run it as a "side hustle". Preferably, we would like to run this without declaring a business, as we believe that there is very low legal risk (unless a worker assaults someone).

Furthermore, we would also like to ask for advice on if it is recommended to hire a consultant or an accountant to help us set it up as we have no prior experience.

Thank you for your time!
Kyle

I've just watched Ben's latest video on YouTube, so I'll be very careful in the way I phrase advises (I'm not doing legal advises) but I would say you just want to make some research about Sole Proprietor (個人事業 - Kojin Jigyo) system.

In this system, you don't have to hire an accountant, but you have to do things right. People from the tax office may assist you if you speak the language. An English-speaking accountant would make things easier and you would be certain that everything you do is by the book.

William wrote: ↑Wed Jul 12, 2023 9:27 am I've just watched Ben's latest video on YouTube, so I'll be very careful in the way I phrase advises (I'm not doing legal advises) but I would say you just want to make some research about Sole Proprietor (個人事業 - Kojin Jigyo) system.

Ha, ha, I think this kind of thing is fine

OP might also find the local business association (商工会) can provide information and assistance.

JohKun wrote: ↑Wed Jul 12, 2023 2:31 pm This is not a comprehensive list.
You need to declare to have a business to tax department and annually declare your income from the business and tax profits, you need also apply to become qualified to hire people. You also need to enroll at least for workplace accident insurance and prepay insurance fees, possibly for other insurances as well.
For a complete list, I’d suggest to get specialist advise or read any of the books on starting a business, as well as getting advise from the tax department and your local Hellowork.

Good advice.

'Side gig' is usually something you just do yourself to earn a bit of cash, isn't it?
Not hiring and paying a bunch of part-time workers.

William wrote: ↑Wed Jul 12, 2023 9:27 am I've just watched Ben's latest video on YouTube, so I'll be very careful in the way I phrase advises (I'm not doing legal advises) but I would say you just want to make some research about Sole Proprietor (個人事業 - Kojin Jigyo) system.

In this system, you don't have to hire an accountant, but you have to do things right. People from the tax office may assist you if you speak the language. An English-speaking accountant would make things easier and you would be certain that everything you do is by the book.

Hi, Thank you and everyone else who has taken the time to reply!

I apologize if some of my questions seem "too basic" for a chat forum like this, but I really seem to get mixed messages from web searching.

We were interested in Sole Proprietorship, but feel that having one person as an owner, and employing the other partner may lead to complications down the line. Yet, most places we check also suggest we explore Sole Proprietorship. Is there a misunderstanding that we have in this format, or something we are missing out on?

We are currently looking into setting it up as an LLC or an LLP (likely LLP), as this seems to match what we are looking for. However, given that we have no experience setting up a business, we would love to hear what you, and other people, think of setting it up like this.

Thank you again for any responses, we really appreciate it!
Kyle

kyle_bruce01 wrote: ↑Thu Jul 13, 2023 5:17 am...
We are currently looking into setting it up as an LLC or an LLP (likely LLP), ...

I'm not sure what LLP is, but from reading posts both here and elsewhere, using an LLC (foreign one, like in the US) causes problems.

Sure, in the US it's the bees knees, but that's within the tax and biz framework of the US. Someone using a US LLC in japan becomes liable for japan's business taxes--besides paying taxes in the US. So, double taxation. (and no foreign earned income exclusion for businesses)

*

Look into setting up a 合同会社. You'll very probably need an accountant (i.e., to pay an accountant) to follow thru on it all--the book-keeping and then tax reporting--but that's the nature of the game.