Oak Admin Guides
For many foreign companies, offices and banking are treated as logistical details to be solved after incorporation. In Japan, they are central. More than almost any other element of market entry, office arrangements and banking relationships determine whether a newly formed company is perceived as real, credible, and sustainable.
Why "Substance" Matters More Than Paperwork
Japanese institutions do not evaluate companies purely on legal existence. They assess substance, the extent to which a business appears capable of operating continuously and responsibly within Japan.
This is particularly true for:
- Corporate banks
- Immigration authorities
- Large counterparties
- Regulators in certain industries
Substance is inferred from multiple signals: where the company is located, who manages it, how it is funded, and how it plans to operate day-to-day.
Office Space as a Credibility Signal
Every Japanese company must have a registered address. From a purely legal perspective, it's where official correspondence is sent. In practice, the address functions as a shorthand for seriousness and permanence.
Physical Offices
Physical office space is often expected, and sometimes effectively required, when a company intends to:
- Sponsor visas
- Open corporate bank accounts
- Hire employees
- Operate in regulated or conservative industries
Serviced offices offer furnished space, flexible terms, and administrative support, making them attractive for market entry. Coworking spaces can also be viable, provided they allow registered use and offer sufficient privacy.
Virtual Offices
Virtual offices are widely available and frequently used by early-stage companies for incorporation and mail handling. However, many banks are cautious about opening corporate accounts for companies that rely exclusively on virtual addresses.
Virtual offices are best understood as a transitional tool, not a long-term solution.
Corporate Banking in Japan: Why It Is Difficult
Opening a corporate bank account in Japan is one of the most commonly underestimated steps in the entire market entry process.
Japanese banks operate in a highly conservative regulatory environment. Their compliance obligations are strict, and risk tolerance for new, foreign-owned companies is often low.
Banks tend to look for reassurance across multiple dimensions:
- Clear business activities
- Transparent ownership
- Identifiable decision-makers
- Physical presence
- Reasonable capitalization
- Coherent documentation
What Banks Typically Review
While exact requirements vary by institution, banks commonly review:
- Corporate registration documents
- Articles of incorporation
- Identification of directors and owners
- Business plans or descriptions
- Expected transaction flows
- Office details
- Source of initial funds
Some banks may request interviews with directors or managers. These meetings are evaluative, banks want to understand not just what the company intends to do, but how it will operate in practice.
The Role of Residency and Local Management
Residency is not legally required to open a corporate account, but it often influences outcomes. Banks are generally more comfortable when at least one director or authorized signatory resides in Japan.
Timing Matters: When to Apply for Banking
Applying too early, before office arrangements, capital planning, or operational details are clear, can result in rejection that is difficult to reverse quickly.
Applying too late, after hiring plans or visa applications are already in motion, can create operational bottlenecks.
Successful companies typically treat banking as a planned project, not a background task.
The Consequences of Banking Delays
Without a corporate bank account, a company cannot:
- Receive customer payments locally
- Pay employees
- Pay taxes and social insurance
- Demonstrate financial activity
In practice, banking delays often cascade into delays in hiring, visa sponsorship, and operational launch. This is why banking is frequently the critical path in Japan market entry timelines.
Substance Is About Consistency
Ultimately, Japanese institutions are looking for consistency. A company whose office setup, business plan, capitalization, and staffing plans align is perceived as lower risk than one where each element tells a different story.
Substance is not about size or prestige. A small office, modest capital, and lean team can be perfectly acceptable, as long as they make sense together.