Approach banks like you would a company you want to work for. Be prepared with the right paperwork, practice answers they may ask you ahead of time, and dress professionally. Banks are looking to understand what your business does and how you are going to make money and to ensure you are trustworthy. Show them your earning potential by bringing financial statements or invoices that you have sent out to clients. Start with smaller banks first, like Bank of Yokohama or Seibu. Once you have established a credit history in Japan and are a less risky client, then apply at larger banks like Mizuho, UFJ Mitsubishi, Resona, etc.

My lawyers had warned me that getting a corporate bank account as a foreigner could be challenging and advised I have a Japanese partner especially for this step.

Even with a Japanese partner, I was surprised at how challenging it was to get a bank account. It was mostly an investment of time in visiting the banks coupled with the anxiety during the interviews and then the ultimate rejection that made it so hard and left me feeling a bit hollow and defeated. Why didn’t these people want to take my money?

We started approaching banks in April and didn’t get an account until July.

Before we would visit the bank, Kyoko would call and double check what paperwork we needed. Normally it was:

印鑑証明書 - Company Seal Registration
履歴事項全部証明書 - Historical Matters Document
国税電子申告 - Tax Registration (filed electronically)
在留カード - Residency card
印鑑 - Inkan

In the case of Shinsei they also ask you to print:

法人番号 - Employer Identification Number

Kyoko and I went to the major banks in Shibuya first (Mizuho, Resona, Shinsei). For Resona our accountant even came with us to try to increase our legitimacy, but to no avail.

We were rejected by all.

When we were at Resona, the bank teller was kind enough to explain before we left that we probably wouldn’t get an account with them. The reason was that the personal identification information we were using (Kyoko’s) didn’t match up with the information on certificates A and B, which had my information with my US address. They were looking for consistency across all those documents. That was frustrating to learn after so many previous rejections, and I was curious why my lawyers hadn’t recommended we put Kyoko’s info on those papers in the first place—especially since they had recommended I work with her.

We ended up just waiting to approach banks until I got my residency card and business registration papers were updated with my Japan address and phone number.

The fourth bank we tried is called Seibu. It isn’t considered a first-tier bank and tends to work with small businesses. For the first meeting, a bank teller actually comes to see your office space, and then they decide after that if they want to let you have an account or not. For people just getting started I would advise staying away from the major banks and go with banks like Seibu, or regional banks like Yokohama, to increase your chances of success at opening an account.

For this appointment, we were much more prepared. I had printed out pages from the website and reviews from previous customers, brought invoices, and Kyoko and I both had our business cards. We even wore suits!

After the tour of the office, we went into a meeting room and the bank teller asked the normal questions: Why do you need an account? How does your business work? He was way less intimidating than the other tellers we had spoken with, and when he started explaining the services Seibu offered, I knew that we had done well.

At the end of our meeting, he congratulated us and said he would gladly open an account for the business (YAYAYA! - I celebrated on the inside and remained professional on the outside).

About a week later we went to the bank and signed papers and made a deposit. Two weeks after that I received the cash card in the mail. Unfortunately I don’t think this bank will work out long-term for the business. They charge really high service fees for transfers, and since most of my clients are foreign and would be transferring, it’s not cost effective. My accountant has advised that I build credit over the next year and then re-apply to some of the major banks.

I was working with clients and getting payments (albeit not that many) for six months before I successfully opened a bank account. Thanks to services like Paypal, Square, and Venmo I was able to do that. I’d highly recommend working with a service like that if you are going to be working with clients back in the States. It makes the invoice payment process much smoother for both parties.

With corporate clients, you’ll also have to fill out a W-8 with your foreign tax ID, so it’s good to have that prepared as well.

If you are sponsoring your own visa and do not have your residency card yet, I would advise you to wait to go to the bank. If you can manage your funds and keep track of different business and personal expenses in the meantime, I think that would be your best bet—just to avoid some of the headache.

Additional Tax Resources:

W-8 tax form - for foreign entities doing business with US companies.
How to fill out the W-8 form.
Taxes for Expats - tax services for US citizens living abroad.
Taxes in America, deciding your foreign residency status.
Making sure you've taken the appropriate steps to abandon your domicile in the United States.

Entrepreneur Spotlight

Name: James ODonoghue

Country of Origin: United States

Company: In House Advisory Group, helps companies in Japan navigate the American legal system.

Years in Japan: 3+

James fell in love with Japan as a young adult when he discovered martial arts and read The Book of Five Rings, a book about samurai philosophy. He studied Japanese in college and went on to become a lawyer.

Originally he came to Japan on a two-month contract, which got extended to 18 months. During that time, he decided to open his own company that would help Japanese companies going through litigation with American companies. He found a partner company to work with and they’ve assisted him in the set-up process, providing translators, office space, etc.

The hardest part for him was opening a corporate bank account; in total it took about six months. It wasn’t that he was approaching lots of banks and getting turned down; it was instead that in order to persuade the first bank he applied to to work with him he had to go through a lot of meetings and be patient.

He ended up going with Mitsubishi UFJ, the third largest bank in the world. He chose this bank because he heard having an established bank would increase his company’s credibility with clients and colleagues. Ideally he would have been able to work with Citibank, a company that is known for making it easy to transfer money between countries. But, since he was a brand new company, he needed to go with a Japanese bank. For now it is working and he’ll stay with Mitsubishi UFJ.

The paperwork James needed to provide the bank includes:

Corporate hanko (stamp)
Proof of registration with his local ward office of the validity of that corporate stamp
Proof of registration of his company (no older than 6 months)
Articles of incorporation
Letters explaining his business and business plan
Proof of citizenship
Lease for the corporate offices

Interviews at the bank focused on explaining James’ work, the purpose of his company, and his plan for acquiring business in Japan. He brought a translator to all the meetings. The translator was invaluable because the meetings were conducted 100% in Japanese, and while James speaks some Japanese, he didn’t want anything misunderstood. Through his translator he was able to communicate clearly and effectively.

James also brings up the point that all applications have to be filled out by the actual applicant and not their translator. That means you’ll be writing in complex kanjis on all the forms and in many cases the staff will ask you to rewrite it if you have made a mistake. James redid his application for a cash card five different times before they accepted it. Be prepared for instances like this when you are at the bank. If you think it will only take one hour, schedule four. That will cut back on any pressure you feel to hurry the meeting along.

James’ advice for individuals about to go through the process:

“Ask for help and advice on the best bank to use. Personal bank accounts can be opened with relative ease at the post office, but corporate accounts require dogged perseverance. Understand that Japan’s bureaucracy stems from a system that has mixed modern finance with practices that date back hundreds of years. Japanese banks have also undergone burdensome regulatory changes in recent years to avoid financial fraud and any affiliation with organized crime or terrorist groups. As a foreigner, you are inherently suspicious, and must establish your legitimacy through navigating their litany of requests, no matter how seemingly attenuated or inane. I always took comfort in the fact that many Americans, accustomed as we are to creating any type of entity or account we want in a few minutes, may not have the patience to endure the process. As a result, those who do are protected by the barrier of bureaucracy surrounding Japan’s markets.”

— James ODonoghue