Name of Capital Transfer in Japan

September 30, 2019

Question:

When we remit the capital contribution from overseas into the bank account of our representative in Japan, the name of the person who remitted the amount is not reflected in the bank book. Will this be a problem?

Answer:

No, it will not be a problem.

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.

The incorporator will then need to provide a copy of their bank book that shows all the capital contribution for shares issued at incorporation to the Legal Affairs Bureau during company registration.

During this period, as stated in Q42, the owner whose account will be used for the capital contribution will have to be checked by the Legal Affairs Bureau. As such, the account holder has to be either an incorporator or [representative] director at incorporation.

However, since the contribution of capital has to be done by those who are issued shares at incorporation, the person who is doing the transfer of payment is not subject to examination by the Legal Affairs Bureau. It is possible that the incorporator hands over money to a representative, and the representative also acts as the person to transfer the money for other incorporators as well, or to transfer money from overseas to a Japanese bank account. It is common for the name of the person who made a remittance from overseas to not be reflected on the passbook.

When remitting amounts from overseas, it may be reflected in the bank book as “foreign exchange transaction” or “inward remittance”. This won’t be a problem in the company establishment.