Chicken and Egg — we want to cut red tapes.
Incorporation process is complicated. Visa procedure is even more complicated especially with some special treatments under covid19 outbreak.
In June and July, I visited Immigration Bureau for five times. Renewal wasn’t too hard, but applying for a new CoE and the attached procedures to renew the temporary visa for the next couple of months was completely chaotic.
All the staffs sitting at the desks told us to go different place because they are not in charge of the process. We ended up visiting five desks to get a procedure done, and waiting for 6 hours.
Level of inspection — visa
Visa inspection process is still unclear. We just know the level of inspection is based on Category — category 1 for listed companies, category 2 for companies paying over 10 million JPY of withholding tax last year, category 3 for companies that finished tax filing, and category 4 for startups that have never completed tax filing. Seems the inspection process is not that hard for category 1 and 2.
However, many of my clients are in category 4 and we go through the hardest process. The entire process and the struggle is very tiresome. So tiresome that we cannot stay without beer, and my client decided to look for beers at the convenience store located on the first floor of the immigration bureau.
The only clear thing we found out was — the convenience store in immigration bureau does not serve beer, because everyone gets crazy especially if their visa is rejected.
What’s the clue to disentangle the chicken and egg process?
Supporting incorporation procedures for entrepreneurs, I found some clues to overcome the chicken and egg problems. The first bottle neck is always when we incorporate — at Notary Office and Legal Affairs Bureau.
- Notary Office
If we want to create a Kabushiki Kaisha (KK, stock company), we need to get notarized in Notary Office. Administrative Scrivener (Gyo-sei-shoshi) can complete the procedure on behalf of us, but Notary Officers often say “we cannot surely say if these purpose of your business are accepted during the Company Registration process, so ask that to Legal Affairs Bureau.” - Legal Affairs Bureau
If we want to create any kinds of companies or associations (KK, GK: Godo Kaisha, Association: Ippan Shadan Hojin, etc), we need to visit Legal Affairs Bureau. They usually say “we cannot comment on the contents of Articles of Incorporation because Notary Officer decides what to notarize.”
My solution
Although I am a native Japanese understanding complicated sentences on the legal documents, many “officers” say the same thing — ask the other parties because I cannot decide.
So the step should be:
- Make a phone call to Legal Affairs Bureau, and make a reservation to get a free consultation. Note: go to the legal affairs bureau that controls the area where we incorporate our company. If we are incorporating in Shibuya, go to Shibuya Legal Affairs Bureau. If it’s Shinjuku, go to Shinjuku office.
- Go to Legal Affairs Bureau and get free consultation and make sure they accept the contents of “the purpose of our business”.
- Go to Notary Office and finalize Articles of Incorporation and tell Notary Officer that “the purpose of our business” is accepted by the Legal Affairs Bureau in my business’ jurisdiction.
- Finalize the Articles of Incorporation, and get notarized.
- Deposit capital amount to one of our bank accounts.
- Go back to Legal Affairs Bureau and finish Company Registration (to-ki).
We all want to finish the process at once, but sometimes visiting office back and forth make the entire process easier.
My experience
When I tried to incorporate, Notary Officer told me “ask Legal Affairs Bureau” so I said “I went to the specific Legal Affairs Bureau in jurisdiction, and the Judicial Scrivener at XXX legal affairs bureau said YES.”
When my client didn’t have hanko, “officers” told us that the process will be difficult without hanko. Later on, we met a good Judicial Scrivener and found out that we can use Signature instead of hanko.
When my client didn’t have hanko certificate, my client had to get Signature Certificate at embassy, and“officers” told us “you need to provide us your ID with photo with the home address” but there was no ID with photo and the latest home address was not reflected on the ID. We found out an alternative.
When my client didn’t have visa, “officers” told her “you cannot incorporate without visa”. This is not true. The Law changed.
Do not get discouraged even people say “No” or “Impossible”.
Entrepreneurs all get used to listening to these negative answers, because we are always trying to start something new that nobody has ever tried in the past, and entrepreneurs are strong enough to push these comments aside and move forward.
That’s the same for red tapes in Japan. People say “No”, “Difficult” or “Impossible” because they are not the ones who have to do the procedure.
But we sometimes need to get it done regardless of how hard and difficult the process is because we need to start and grow our business.
There are laws that we need to follow and there are some procedures that we cannot avoid, but there are always some people who understand this complexity and try to help entrepreneurs stuck in this process.
We are not chicken.
Entrepreneurs are eggs that hold new lives waiting to come out.
