Items to Note when Remitting Capital from Overseas in Japan

October 2, 2019

Question:

We are planning to contribute capital from a foreign country to the bank account to a representative’s bank account in Japan. If our capital amount is planned to be 5 million yen, then would there be a problem if we transferred exactly 5 million yen?

Answer:

There may be cases where 5 million yen would not be enough.

Explanation:

The Article 31, paragraph (1) of Companies Act stipulates that an Incorporator must pay in the entire sum of monies relating to the incorporator’s contribution without delay after subscription for Shares Issued at Incorporation.

Remittances from overseas tend to incur bank charges in the form of transfer fees, which are often deducted from the overall amount that was remitted. For example, if a capital of 10 million yen was sent from overseas, a transfer fee of 864 JPY would be deducted from the overall amount. As a result, only an amount of 999,136 JPY would enter the receiving bank amount.

Therefore, it is necessary to consult with financial institutions such as banks that transfer money, and then adjust ensure that the amount of 5 million yen or more is deposited to the bank account of the Japanese originator representative.

However, as long as it can be confirmed that there is more than 5 million JPY in capital that entered the bank account, there wouldn’t be a problem.