Latest rules for opening corporate bank accounts
If you’ve tried to open a yen corporate bank account for a newly registered entity this year, you may have realised that the process takes longer and has become more bureaucratic, with obligations harder to meet for some firms. There has been little fanfare about the new process, although some banks issued notices in the last quarter of 2010.
Until late last year, all one needed was a firm’s registration certificate, the corporate seal, corporate seal registration certificate, and identification for the person authorised to carry out the process. With one trip to the bank, one could open a new corporate bank account that was ready to use, while an ATM card would be posted to the firm’s registered address within the week.
Now, however, at least two visits to the bank by an authorised person from the firm are required. The first visit is to apply for a new corporate bank account, and one is required to fill out forms and answer questions about the business’s activities in Japan. In addition to the items mentioned above, one must now provide copies of the following:
• Contracts with clients in Japan (prospective and/or existing)
• Purchase orders from clients in Japan
• Employment contracts with staff in Japan
• Service contracts with Japan-based service providers
• A printout of the firm’s website
It is believed that these documents are required as proof that the firm actually exists and is committed to doing lawful and genuine business in Japan. The provision of the additional documents could be problematic for a new firm that does not have signed contracts with clients or service providers. In the case of newly established subsidiaries of foreign firms, however, contracts between Japanese entities and the parent company of the subsidiary are acceptable.
Banks take about two weeks to review an application and then contact the firm by telephone, requesting either additional documentation or one more visit to the bank to open the account.
This phase also requires the presence of an authorised person from the newly established firm. The new firm can then activate the bank account by depositing any amount in yen, and any ATM cards and online banking documents applied for will be delivered later to the firm’s registered address.
Should there be a delay in submitting the necessary documents, the account-opening process could take a month or longer. In the case of a multinational corporation’s subsidiary, it is thus advisable that the Japan country manager or representative ask headquarters well in advance (while the Japanese entity is being registered) for copies of customer contracts. This will ensure that a corporate bank account is opened within two weeks of receiving the firm’s registration certificate.
