Going freelance or starting a business in Japan: the first steps

Step 0: does your residence status allow it?

• Permanent residents, spouses of Japanese nationals or permanent residents, and long-term residents can freelance or run a business freely.
• Work visas (e.g. Engineer/Specialist in Humanities/International Services) cover a type of work, not an employer. Some freelancers keep the same status by contracting with several companies in the same field; this needs care at renewal. Work outside your status needs permission. Side work on your visa.
• Running a company as its manager needs the business manager status (経営・管理). Its requirements were tightened sharply in October 2025: they now include at least one full-time employee and Japanese ability, among others. Check the current list before planning around it.

For anything beyond simple freelancing, an administrative scrivener registered for immigration filings (申請取次行政書士) is worth an hour before you quit your job.

The notices to file

Money basics

• File a tax return each spring for the previous year. Tax on side income covers the basics.
• Keep business and personal money in separate accounts. It makes filing an evening's work.
• Your National Health Insurance and resident tax will be based on this year's profit next year. Put aside a share of every payment.
• With taxable sales of ¥10 million or less (counted from two years earlier), you're usually exempt from consumption tax, and invoice registration (インボイス) is only needed if business clients ask for it.

Working with clients

• Put the scope, price and payment date in writing, even by email. Since November 2024, Japan's freelance protection law requires businesses hiring freelancers to set out terms clearly and pay within set periods.
• Japanese companies often pay at the end of the month after the invoice (月末締め翌月末払い). Plan your cash for it.
• Invoices (請求書) are expected: your name, the client's, the work, the amount, bank details, and the date.