MK @ Legal Biz Leaf Wiring Capital
At the time of incorporation, hundreds or thousands of millions of legal tenders would be transferred between countries, and the procedures at the bank or other financial institutions tend to be difficult and time consuming. Thus, this is one of the most important process where you’d want to complete without any failure.
Today, I will explain about some of the option and regulation pertaining to the remittance bank account or other financial institutions where you can wire/deposit your investing monies.
The available accounts to be used
Option 1: Japanese branch of Japanese bank
Option 2: Japanese branch of overseas bank
Ex.) Tokyo branch of China Bank
Option 3: Overseas branch of the Japanese bank
Ex.) Shanghai branch of the Japanese bank
Unavailable option: Overseas branch of an overseas bank
Ex.) Shanghai branch of Chinese Bank
The available account to be wired
1. Account of the incorporator (in principle)
The most common accounts to be used for remitting/depositing investing monies. If there is more than one incorporators, monies can be transferred to one of their account.
Important: The paid-in capital at the time of the incorporation need to be literally “wire/deposit” the money.
Ex.) Incorporator Mr. A and Ms. B each invests 500,000 JPY
Mr. A transfers 500,000 JPY to Ms. B’s account.
Ms. B can either withdraw 500,000 JPY from her account once and deposit it again, or transfer 500,000 JPY from her own account ① to account ②.
* Proving for having 500,000 JPY in your bank balance is not acceptable.
2. Account of the director
If incorporators do not have any bank account which they can wire their money into, then those monies can be transferred to the account of the director of the incorporating company.
In this case, a “proxy letter” must be issued from one of the incorporator to the director.
Ex.) Incorporator Mr. A and Ms. B are residing in the UK and hiring Mr. C as nominee representative director in Japan.
Mr. A and Ms. B can transfers their money into Mr. C’s bank account in Japan.
3. Account of the third person
Only if neither incorporators nor representative director(s) have accounts that they can wire their monies into, they are allowed to wire monies into a third party’s account. In this case, a “proxy letter” from one of the incorporators is required.
Ex.) Incorporator Mr. A and Ms. B are residing in the UK and Mr. A will become the representative director of the incorporating company.
Since it is obvious that they do not have an account in Japan, they can remit their monies into Mr. C (an assistant in Japan)’s Japanese bank account by giving the proxy letter. (In this case, “petition to Legal Affair Bureau” will be required for as an additional document for the registration)
Conclusion
As it is shown above, there are various restrictions regarding the process of wiring capitals, and this is where people often stumble during the incorporation process.
Especially in cases where a company is setting up a subsidiary in Japan, it might not be admirable to remit company money to the personal account of a local representative director or a local assistant. Therefore, at the time of incorporation in Japan, it is highly recommended that concerned parties prepare for the opening of a brank account with one of the options above (option 1 to 3) as early as possible, or to search for a reliable assistant in Japan (such as a legal corporation or tax accountant corporation) to arrange for the remittance account.
Other Important Information:
When remitting money from overseas, please keep in mind about the remittance fees and exchange rate, so the full amount of investing money will be remitted to the account as it has been planned. My recommendation is to wire some extra to the actual investment amount.
MK@ 03/14/2022
