Doing Business in Japan
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Knowledge base on doing business in Japan. Topics: visas and immigration (including the Business Manager visa 経営・管理 and the October 2025 reform), company registration (株式会社/合同会社/個人事業主), taxes, legal issues and cases, documents and procedures (banking, offices, accounting, hiring), useful links and contacts, and other business-relevant topics (culture and mentality, networking, marketing, real estate, lending, insurance).
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Tax, Governance, and Litigation-Funding Risk in Contracts
Hidden withholding-tax exposure in consultant contracts, how a company's articles can limit a hired director's authority, and the largely unused status of litigation funding in Japan.
A hidden tax risk in contracts with lawyers or consultants: paying the full fee without withholding tax can lead to tax claims for the underpaid withholding landing on the client company rather than the contractor, if the contractor's license type required such withholding. A company's articles of incorporation (teikan) can limit a hired director's authority — for example, requiring owner approval for purchases above a set amount, restricting banking transactions, or requiring the director's authority to be reconfirmed at least once a year. A director's authority cannot be revoked immediately; it can only be left to lapse at the next renewal. Third-party litigation funding (legal financing in exchange for a share of the winnings) is legal in Japan but is almost never used in practice — an unverified chat opinion.