Transcript
Speaker: I don't, like I said, I don't want to get a backup beer. I should have, you guys should have set this up for like my evening. So I could have had a beer with you guys. We'll switch it. We'll switch it next time. Okay. Next time we'll get drunk in the morning. Welcome to the buying a house in Japan podcast. My name's Take.
Speaker: And I'm Joey and we're two friends who just quit our corporate jobs and bought a cheap house in rural Japan. The goal of this podcast is to document the highs and lows of the process while informing you of every step you need to take in order for you to do it yourself too. We're by no means experts and we're doing this for the first time, but we hope this gives you a realistic expectation. If you embark on this journey yourself and we hope you enjoy the show.
Speaker: Hey all, excited to host our second guest on this podcast. Today we have Rob Shimakura from Shimax Legal. Rob is a Shiho Shoshi, also known as a judicial scrivener. Don't worry, we'll get into what that is later. Based out of Tokyo, Rob's been an instrumental part of our plan as he's been helping us create a company entity in Japan and we hope to eventually use his services.
Speaker: to apply for the business manager visa. Also wanted to give a disclaimer on Rob's behalf that most situations are a case by case basis. So please reach out to him and know things can be a little bit different than explained in our episode. Thanks for listening and hope you enjoy. I guess while I have you Rob, what do you do? Who are you? So who am I? Well, I'm Rob. I am Japanese Canadian. So I was born in Japan, but I was raised in Canada.
Speaker: I've basically lived my whole professional career or my professional life out here in Japan. I actually started out in IT, but for the last 15, close to 20 years now, I've been in the Shihososhi industry, which, and I'll get into what a Shihososhi is with you guys a little bit later. Yeah. We're in Canada. Sorry to interrupt you there. You're both in Canada? We're in Canada. I would call Victoria, BC, my home.
Speaker: Although I've lived in like probably about 10 different cities in Canada. So I've been around, I've traveled a lot. Wow. The Canada -Japan connection is interesting. At least from our perspective, like on the real estate side of things, I feel like we've met so many people in the space from Canada, either working on the selling side of real estate or influencing or something like that. It's been interesting.
Speaker: Yeah, I don't know. To be honest, like for our client. Okay. So just to get, tell you a little bit about what our office does here. Like I say, I've been involved in this industry for about 15 years, maybe a little bit longer. Prior to my current office, I belong to one of the larger Shihososhi offices in Tokyo. And I went independent from that firm about six years ago with one of my colleagues at that time. He and I set up this office.
Speaker: What do we do as a Shiho? Okay. So a Shiho Shoshi is like a, is like a subset or a part of the Japanese legal profession. And it specializes in registrations, legal registrations filed to our register office. So that would include things like registering to set up a company. We would do all the legal process for that. Also registering title transfers on properties.
Speaker: So those are like the main things that a Shiho Shoshi does. So like in Japan, the legal profession is it's split up into different parts. So like a Shiho Shoshi does legal registrations and another professional, it's called a Gyose Shoshi, they do like visa applications.
Speaker: You say that again slowly. I feel like I always is a tongue twister. Sure. I literally was getting someone to ship something to your office and they spelled she whole show. She wrong. Maybe four times. Sure. Okay. So she whole show. She okay. And that is Scrivener.
Speaker: well the dictionary translation would be a judicial scrivener although i don't think i've actually heard that term used when i lived in canada and i don't know if you guys have that was yeah we never i was like what the f is a script exactly yeah basically that's what that profession does.
Speaker: So Shiho Shoshi does registrations filed to the register office. So if you guys want to set up a company, which you guys are, then Shiho Shoshi would do that process for you. Also, title transfers on properties. That's what we do. Yeah. So in Japan, you need a judicial, I'm just going to say judicial scrivener. You need a judicial scrivener to do things like the title transfer and setting up property, or can someone do it on their own? You can do it on your own. It's just that.
Speaker: as you would probably find that the procedures are exceeding are very complicated for the average person to be able to do. The vast majority of people would ask a professional to do it.
Speaker: Got it. And just to set context, um, yeah, Rob is helping Joey and I set up a KK. And we'll talk about what that means in a second. So Rob has kind of started us, helped us from start, hopefully to finish soon, set up this company's first off. Thank you, Rob, for the help. There are not too many bilingual she whole show. She's, I feel like that we've come across and that you're, you've been very helpful so far to us and we're happy to have you on the podcast.
Speaker: Thanks. Yeah, we've dealt with a lot of people in this industry and yeah, there probably are a limited number of Shiho Socis or just a limited number of legal professionals in general in Japan that can provide services in English. And generally you'll find that asking for services in English will cost a premium. Probably you'll find that dealing with bilingual accountants or bilingual Shiho Socis, et cetera.
Speaker: that the costs might be a little bit higher. So that's, you've probably noticed that as well, but it's just a scarcity thing, right? You really do have to pay to play. The entry to the Japanese market as a foreigner that's not currently residing in Japan seems very high.
Speaker: A lot of that is just the language thing. Like formal documents in Japan have to be done in Japanese. They don't accept things in English. Right there, you're at this disadvantage. Rob, rewinding a little bit. So you're based in Tokyo and, sorry, what was your company name again? Just to make sure I get it wrong.
Speaker: four name for it would be Shimakura Shiho Shoshi office. Awesome. Right. Which we just, Shimakura is the other partner, the other gentleman that I went, I, that was my former colleague that we went independent and did this, started this venture with. So he's the other colleague. We just refer ourselves, refer to ourselves as Schmax legal to our English clients, just because it's easier to remember. Yep. Yeah.
Speaker: I like she max. I was actually wondering where that name came from. Where that came from. That actually came from us having a beer. For everyone not watching and we're not posting this audio wise me and Joey are both with our beer. Sorry, Rob. I know it's in the morning for you. We'll switch up the time next time. So you can have a beer with us. Awesome. But how can people reach you to before we go too deep into it? Do you prefer? Well, we have, we have a, we have a website with a contact form.
Speaker: Or an email is fine. We're a small office. It's not, it's not like we're some huge outfit out here in Tokyo. So yeah, a small office of four. It's myself, Keita. He's the other guy. And then we have another Shiho Soshi and then we have our, our, our admin staff. So it's just the four of us. So we're a little office. Got it. Yeah. If it feels that way, I think when we're interacting with you, it seems like you guys have been very quick on responding and.
Speaker: It's good to see that we're, we've worked with real estate companies are like the big behemoths. Yeah. It's good to see that you guys are kind of like a small, tight team. And, uh, again, you guys have provided impeccable service to us thus far. So you're a Shiho Shoshi, you're a judicial Scrivener, high level. You do everything from real estate tile transfers. Is that the single biggest word to describe? Or do you think there's other things? Yeah, I think the, the Shiho Shoshi profession in general is in Japan, it's probably more known.
Speaker: or real estate services. So probably the vast majority, well not the vast, I would say a majority of the Shiho associates in Japan probably do real estate as sort of their main business with corporate registrations as sort of their secondary line of business. Our office is actually different. We're actually the reverse. So our main area is actually within corporations and corporate registrations do also do real estate registrations as well. But it's, I'm just going to be honest that it's not our main area.
Speaker: Which is more paperwork? Good question. They're probably almost equal I would imagine.
Speaker: If you're going with real estate, you'd have to be dealing with the brokers as well. So for us, it's actually being corporate is actually easier for us because it's, we just interact with ourselves basically. Question on the title transfers. We've actually talked to someone recently who wants us to sell her property for her. If we, is that a situation, let's say we find we're a cash buyer. We approach someone who wants to sell their house. Do we need to go through a real estate agent?
Speaker: Or can we go directly just with the she whole show sheet for that? If we probably have to create you'd probably have to create contracts, purchase and sale agreements, which we can't produce.
Speaker: Assuming that all the documentation is intact, we might be able to assist with the actual final transfer of the registration and witness the closing, but like all the stuff before, that's not in our area. Okay. But yeah, so it sounds like though you, Shiho Shoshis are an absolute must for any real estate transaction in Japan.
Speaker: Is that right? Well, for the final registration, yeah, you would need to have one. Yeah. Okay. You mentioned being there during closing. Is that the normal part of this process that you're just there as a witness or? Yeah, usually what happens is, okay. So this is.
Speaker: your typical transaction where both the buyer and the seller are in Japan. So usually what happens is all parties, so the Shihososhi, the buyer, the seller, the real estate agent, they would all get together. Typically what happens is these usually happen in a bank meeting room and all parties go there and then the Shihososhi will check all the documents to make sure everything, all the
Speaker: the keys across and all the eyes are dotted. Make sure everything is intact and do ID, verify ID, make sure everybody is, everybody is who they say they are. And then at that meeting, the buyer will instruct his bank to transfer the purchase price to the buyer.
Speaker: And the buyer will then, we all sit around in this room and then at some point the buyer's bank will call the buyer and say, yeah, the money arrived. And then it's real time. And then as soon as that happens, then, okay, then basically the Shiho associate takes all the papers and documents and goes to the, the register office and files all the papers.
Speaker: wow so it's literally a call from the bank like the funds have arrived yeah like it's all real time yeah we just we so most of the time when these are just purely domestic transactions the transfers occur fairly quickly okay it's just within the countries the funds would arrive within 30 minutes or 15 minutes but right so with an international transaction i think you're gonna have to
Speaker: figure out some different way to do this because usually the title transfer is done after all the funds are like all of the purchase amount has been received. Yeah, we've heard kind of people taking power attorney and maybe doing it like let's say we had a power attorney for a client of ours or something and we kind of signed on their behalf. Is that something? That's probably not actually in our area. So I'm not a bit hard to
Speaker: hard for me to comment on that. Got it. Kind of curveball question. What's the longest signing procedure you've done in your career so far? Were you waiting for the bank for three hours for funds? Yeah, we've had three or four hours a couple of times. It's always kind of awkward. It's good when all the people there are like chatty people because he can at least talk about the weather or something like that.
Speaker: some of these people are not the chatty types and so we all just sit there you just you guys just sit there for a couple hours just looking at your phone and yeah we're looking at the documents just yeah that's it's happened a few times
Speaker: oh goodness okay that's uh that's hilarious actually so that can you leave the room can you guys be like oh yeah we can go let's take a quick bathroom or something yeah okay wow that's interesting and i guess we're i would like to talk about this later and what's just kind of curious how you things will
Speaker: How do you think things will change? But we'll cover that a little bit later on title transfers. Can you do, are you, is your office able to do all of Japan or do you guys only do Tokyo or kind of, how does that work? Well, usually what happens is part of this is we have to verify ID for our KYC purposes. And so usually what that involves is when the, we have to actually meet with the seller of the property. Okay.
Speaker: Um, and the key word there is meet with the seller of the property. So being based in Tokyo, if the seller sort of lives in within the Tokyo area, it's, we can definitely go and meet that person. But if there's something elsewhere in the country, then yes, theoretically we could do it, but we'd obviously have to charge the client for our travel time and all that stuff. Um, so usually if we are going to be doing this most of the time, most of our, these transactions in and around our area.
Speaker: Is there opportunity to do it over zoom or I know during COVID there's probably a different thing that was set up or in principle in person. Okay. Okay. For the seller, because the reason is because the seller is basically by doing, by registering this idle transfer, we are essentially.
Speaker: taking away somebody's right from a property yes so we want to be absolutely sure that we are doing it that the person says that they are who they are understood and there is no error because you hear these stories every once in a while of people trying to pull a fast one
Speaker: Oh really? Oh yeah, you hear about these things once in a while in the news. As a Shiho social office, we want to be absolutely sure that the person who is selling the property is who they say they are and that there's nobody behind them pulling the strings kind of thing. So you guys are the detectives, you guys are double checking, making sure
Speaker: Joey's Joey when he's yeah, exactly. Yeah. Got it. Do you get into sticky situations with like inheritors? So I get a lot of our, a lot of our listeners are looking at Akiyas and there's a lot of confusion on who is the title owner or any thoughts around that.
Speaker: probably the, you could find some of the information on the property registration certificates, but I think that's something that usually the real estate person would be, would initially start looking into. So you don't have any, by the time it comes to you, it should be very straightforward. This is the person. Well, we hope it is. Yeah, we hope it is. Yeah.
Speaker: Got it. We'll transitioning a little bit. Yeah. Like we mentioned before, Rob is helping us make a company in Japan. So our background is we bought a place down in Beppu. If you listen to this podcast, we're trying to Airbnb it. So for us, one of the big things is Airbnb is a long -term game. We hope to get a couple rentals. So we decided.
Speaker: We should probably make a company for two big reasons. One, for taxes. How are we filing taxes? And two, our main goal is really to make a bank account. Rob, where may be a unique case, but who should consider, especially foreigners who are looking to buy in Japan, should they be considering to make a company?
Speaker: That's a loaded question. Give us your disclaimer now. I guess it really just depends on what the objectives of the person is. You could buy the property as an individual if you're looking to make this into an actual business and acquire numerous properties and
Speaker: Well, as you guys say, Airbnb or rent them out and these types of things, then maybe perhaps it should be under underneath a corporate entity. But I guess it really just depends on what the person is interested in. I mean, of course there's going to be tax planning and tax issues as well. And just as a disclaimer, we're not tax specialists. We can't comment specifically on tax site tax issues, but that would be perhaps another reason why somebody might consider purchasing underneath a company.
Speaker: Do you think, so I guess, yeah, one of our big way, big reasons was to get that bank account. Do you find that is a typical reason people make companies to get that? I don't think it's a typical reason, but it's one of the reasons, I guess. Yeah, I think.
Speaker: Jerry, correct me if I'm wrong. I think this was, we were looking at like, how the heck do we get a bank account? How do we pay utilities? How do we do this? And this seemed to be registered bicycle was like, you wouldn't be able to open a bank account in Japan living abroad.
Speaker: It just wouldn't, it would be very difficult. And I would say almost bordering impossible. So it's not crazy to say that as a foreigner, one of the only ways to make a bank account in Japan is by forming a company. True false. What do you think?
Speaker: Even that's pretty loaded, I think. Yeah. Cause even if you have a company, there's still no guarantee that you can get a bank account because if all parties in that company don't, if the owners of the company and the directors of the company are non -residents, then you're going to have the same problem. Eventually there has to be somebody in Japan.
Speaker: Okay. We'll talk about that and we'll give, we're happy to share, uh, you know, our, our situation. So one of the questions we had Robin, we went back and forth a couple of times. So we would decide, yes, let's make a company. Our goal is to make a bank account. We came kind of a cross in the paths where there's two different companies we could make. There's one called a, a K K and a G K. Do you mind giving us high level kind of overview of those?
Speaker: Okay. Well, I guess a lot of your listeners are like, well, our interests in real estate. So I'll just quickly answer that. Okay. So whether you can purchase property underneath the KK or a GK, it really doesn't make any difference. So a person can use either one. So it really comes down to your choice of the company types. So the KK is a more traditionally recognized type of company in Japan. So it has a longer history. The GK is a fairly new type of.
Speaker: kind of entity and it is gaining in popularity, but the vast majority of companies in Japan are still KK. Got it. And what, sorry, what does KK and GK stand for? I always get it wrong when I say it. KK is Kabushikigaysha. Okay. And GK is Godogaysha. What does that mean? Okay. KK or Kabushikigaysha is a stock company.
Speaker: So the people who invest in the company, so they're shareholders and they are issued shares in proportion to the amount that they invest in the company. And as shareholders, they have voting rights at the shareholder meetings and they can receive dividends from profits in proportion to the amount that they've invested in the company.
Speaker: Got it. And I think that's pretty standard for pretty much anywhere in the world. I would imagine the day to day management of the company in the KK is typically run by, is going to be performed by directors. And those directors are elected by the shareholders. So basically that means that the directors and the shareholders could actually be completely different people. So you have a separation between the owners of the company and the people who, you know,
Speaker: make the executive decisions. The other one, the GK, it's the gold ovation. So this one is, in this case, the investors are called members. And those members are actively involved in the operations of the company.
Speaker: So the equivalent of the directors in a GK are always selected from among the members. So basically in order to be a director, you have to be a shareholder. And one of the big differences that we find is that in principle, in a GK, regardless of the amount that a person has invested, they have one vote. So all members in GK have basically the same say.
Speaker: Hmm. Okay. Yeah. And I guess other things that we typically, or other things that we suggest when people are trying to decide what to set up, I guess one is, okay, do you want to have the K K name value? So some people say, yes, they want to have the brand name. Then there's also this thing about getting back to the votes and the dividends and the, and the votes of the shareholders. It's a lot easier to explain to somebody how this works, if it's structured in a proportionate based system. Hmm.
Speaker: So if you are planning to increase the number of investors in the company, then perhaps a KK might be the easier way to go. Got it. And I heard that that's the shares, the relative shares between individuals. Yep. Sorry. Can you repeat that?
Speaker: So why is it easier on the share based company? Okay. Well, okay. So if you have, let's say three members in three people to start and let's say one person has got 40 % say it's 40 40 20 or something like that. And you decide to add a fourth person. It's a lot easier to explain to this person that, okay, you get 10 % of the company as opposed to the situation where you have say three members and adding a fourth member and that person only invests.
Speaker: a tiny amount of money into the company, but that person can still get basically the equals. Yeah. So it's usually when we talk about a GK, we usually talking about a small kind of relatively small size number of people involved in the company, maybe one or two people, you can set up a GK and you intend to keep it at that size going forward. But if you see a situation where you might end up having 10 or well,
Speaker: have more shareholders and perhaps a KK might be the easier way to go.
Speaker: Got it. And we, we heard a lot about, so, uh, for anyone listening, we initially started go for the G K and then we all of a sudden we got advice from a few folks, uh, that maybe a K K was to what you mentioned, Rob, a little bit. People are doing it for the name. So the perception of K K is a little bit more like not legit, or what would you kind of describe it? I wouldn't say legit because, because, because I have it because I have my own case, you're telling me that my
Speaker: You know, probably it's just, I would say recognized, recognizable. Like, I think people know what a KK, a Kabushikai Shae is, right? But when you get to a GK, some people are like, what's a GK? Is that a company? And just the recognition. And I guess the other thing is because the KK has just been around for so much longer.
Speaker: It's obvious, obviously lawyers have, have, well, there's lots of precedents and there's lots of past cases around KKs, even from the legal side of things, the KK is just far more studied. Yeah. Do you think it has an effect? So this advice was in reference to opening a bank account. Do you get an effect on opening a bank account as a foreigner? I don't think so.
Speaker: I don't think so, but it's really hard to tell how the bank looks at these applications. I mean, somebody closer to a bank may have a better idea of these things, but our clients, we have probably 75 % KK, 25 % GK and, you know, people with GKs open bank accounts. Yeah.
Speaker: So I guess the people that are opening the GKs, why they very apparently, I think we saw it as a simpler kind of a corporation or yeah. That's the way that the GK is kind of presented. People have this impression that it is simpler, but the GK can be a little bit. One of the, okay. So one of the, one of the issues that we find with the GK is when that there are, when there are two members.
Speaker: Yep. Yeah. So they're two members. And one of the issues that we find is this deadlock situation, because basically significant decisions of a JK are made by a majority of the members. And when there are only two, a majority is all or nothing, right? Yeah, it's both have to agree. And then you end up, you could end up with this potential deadlock situation
Speaker: Yeah, if there's two people that are planning to set up a GK, one of the things that it always raises flags with us, this, this control issue, who breaks the deadlock. Yeah. So that's one thing that you need to consider. I remember you, you mentioned that to us too. Yeah.
Speaker: Yeah, because we actually did have a situation where we had two friends that set up this thing and then I don't know what happened to them but they had some issues and yeah, and it was because I don't I actually honestly I don't even know what happened to these guys afterwards but the other there was that situation.
Speaker: Got it. From an incorporation cost and timeline and stuff like that? Cost wise, yeah, the GK is definitely a little bit less because the registration taxes, well, the disbursements in general on a GK are less than that of a KK. The initial cost wise, the GK is probably less expensive than the KK.
Speaker: but that's just initial cost, right? Got it. Initial cost -wise, would you say it's like a 10 % difference? I know you don't need to, we're not putting it on the spot for price exactly. Okay. I'll give you just the disbursement. So basically when you set up a company, there's, there are two major costs. There's, well, there's the registration tax paid to the government. And then there's the professional fees that are, that the service provider is going to charge, obviously. So I'll just talk about the registration, registration tax side of thing. So in a KK,
Speaker: The registration tax is 150 ,000 yen.
Speaker: minimum, which is in dollars, 150 ,000 yen. It's about a thousand dollars. Yeah. It's about $1 ,200. Okay. I don't know what the rate is right now. One to one 50 right now. So I think I'm just going to say it's roughly a thousand dollars. Okay. Let's say a thousand bucks. Okay. Yep. Plus there's also notarization fees just from disbursements. You're probably looking at about 200 ,000 for the KK with a GK. The registration tax is typically 60 ,000 yen. So it's about $400 or so.
Speaker: So the disbursements there, you can see a difference in the disbursements right there. The professional fees for setting up, I don't, I don't, I can't really speak for other service providers, but typically the incorporation fees.
Speaker: there wouldn't be that much of a difference between the KK and the GK. As far as we're concerned, process -wise, there isn't a huge difference in what we do. The documents that we produce would obviously be different, but in terms of actual how much work do we have to put into these? I would say they're fairly similar.
Speaker: Got it. Yeah, Rob, I guess people are listening are probably going to be like, how much does it cost from start to finish? Don't want to put you on the spot here, but ballpark, like general for a GK or KK, we can even use our ours as a reference. I mean, I guess part of it would depend on how much capital you're going to put in the company. But just in terms of costs, in terms of registration taxes and
Speaker: professional fees for incorporating the company and I'll say, I don't know, dollars, like $5 ,000 or so.
Speaker: Got it for both the GK and the KK. It'll be a little bit less for the GK, but yeah, roughly similar, I would say. Got it. Follow -up question. People listening probably be like, what's the minimum amount I can put in the bank account? Well, the capital, the legal requirement is, as you guys might know, it's just one yen. So it can really be any amount, but the amount of capital is seen as one method of, let's say,
Speaker: credibility or seriousness, the more you can show, I guess the better it looks and the more legitimate it kind of looks. Yeah. I think that was one of the considerations about us getting a bank account. We're like, okay, how much money do we need to start our investment to make it seem legit enough that a bank would.
Speaker: Listen to you guys, right? Yeah. Yeah. I think for people listening, I think we're putting about a thousand US dollars plus or minus in there. We'll report back if that's enough, but we have a K K we have that. And I want to actually segue. We have a Japanese representative. So Rob, in our situation, both Joe and our foreigners, we want to make a bank account. You gave us some great advice on what, how do we do that? We need an address. Can you kind of describe how to thread the needle to get that bank account?
Speaker: Theoretically. Well, theoretically. Okay. So one of the things is you're going to, if, because both of you are non -residents, if, if it was just you as the directors of the company, the odds of opening a bank account would be very small. So you pretty much have to have somebody in Japan. So that's, I guess that's how our discussion went. Yep. Yeah.
Speaker: And so I guess from that we worked with a company and we'll try to get them on this podcast actually soon. JOS were referred by Rob, a really great folks and they are, correct if I'm wrong Jerry, like they are assigning an employee of theirs to be our representative nominee. Yeah, nominee director. Got it. And we're able to, so temporarily they're on the company and Rob, do we take, can we take them off at some point after we make the bank account? Of course. Okay.
Speaker: Yeah, I think that was actually our original plan. I think when we talked about this earlier. Okay. So yeah, our plan is after the bank account at some point to remove them. Another important piece, Joey and I have made a company in the US. So we have an, our US entity is actually owning our KK entity. Rob, is that pretty common for foreign investors or? Yeah, we see that most, okay. So.
Speaker: Yeah, most of our clients are actually probably subsidiaries of a foreign company. We do have cases where like individuals will set up a company, but yeah, it's quite common. Yeah. Yeah. So our US entity is going to be owning our Japanese entity and we're still figuring out that so many tax implications. So again, disclaimer, do your own research. It's a complicated thing, but that's kind of how we're set up. And again, we have this other company and director as our Japanese director to try to make the bank account on our behalf.
Speaker: Yeah. It's actually interesting. The direct, the director that we're assigned is not Japanese. It's a foreigner. So three, three foreigners here trying to get this bank account open, but they're very professional over at JOS. And I think they're our best shot.
Speaker: Yup. Rob, you might not know a lot, but like, why is it so hard to make a bank account in Japan? Is it like money laundering fears? Yeah, I think that's what it is. I think it's probably the finance authority that are telling the banks to be extra cautious to avoid potential money laundering, sending money to certain parts of the world, perhaps, that the government doesn't want money to be sent to in this type of stuff. I think it's pretty standard around the world, I would imagine.
Speaker: Got it. I feel like it's harder in Japan. I don't know. That's just my personal feeling. Joey, do you, what do you feel? I do. I do feel like it's also harder in Japan. I've sent money between the U S and Canada. Maybe those two have their own different working relationship, but way easier to send money between us to Japan.
Speaker: Yeah. And then Rob, let's say someone's listening, they want to make a K K or G K start to finish timeline. What's kind of the average? I know we've hit a couple of hiccups and paperwork back and forth. What would you say the average start? Well, usually what we tell our clients when there's an international element, which in this case there obviously is, we usually say about six weeks, six to eight weeks or so.
Speaker: Okay. Yeah. You guys are champions. We had so many documents and want to give a shout out and call out to you guys. Very, very organized. I know we had, we went a couple, went back for a couple of times. Interesting. Yeah. Yeah. I want me and Joey went for the E signatures just to try to make it faster, but wet signatures, wet signatures are important in Japan, right? Is that just, well, I think it really, it goes back to the hanko or the seal or the chop or whatever you want to call it that people use.
Speaker: So usually, if the company is being set up,
Speaker: only by people in Japan, then we wouldn't be asking for signatures, but we would be asking for the people to stamp those documents using their chop. But when we're asking non -residents to do this, we ask for a signature. And the register office requires that documents submitted to them are actually signed by the person, like an actual signature. They won't accept a digital signature.
Speaker: Okay. Interesting. I was actually very curious about that too. And I was wondering, is this you dotting your T's and crossing your eyes here, or is there someone along the chain of events where it's like mandatory has to be a wet signature? Oh, it has to be a wet signature. It just wouldn't be accepted. The register office just won't accept it at the calendar. Okay.
Speaker: Oh, geez. I was really nervous. Like some of my signatures might not look exactly the same, Rob, but I was just like, okay, if someone's looking at it, like I'm, I was like really trying to focus. Yeah. That's another one. Um, I think I actually asked Joey about this. So I was, yeah, I was wondering about that. Yeah. Well, I think one of the things is, so first Japan is not a signature culture. So a lot of people aren't used to, aren't accustomed to signatures.
Speaker: So naturally when we sign, I grew up in Canada, so I know all this stuff too. When you sign, there's no way that you can sign something identical every single time. There's going to be some variance. But I think the difference is because Japan is a seal, a hanko type culture, well, the hanko won't change. So it's going to look the same every time you push, you stamp it right. So people here tend to look for a difference.
Speaker: Is there a certain difference in the way the lettering, is the font type slightly different? That's what they're looking for. So they spot a difference and they say, no, this isn't the right seal because it looks different. Okay. So then you come back to the signature thing and well, there's no way that you can sign exactly the same every single time. Exactly. Right. So there's going to be some variance and you have some people who, some people who may not be particularly accustomed to
Speaker: verifying signatures might think, well, this looks different. Okay. Right. So that's why we ask that your signatures are as close as possible to the specimen that you provide. That was really funny. Most of the register offices that we deal with, they understand this. There's a certain level of variance, let's say that they can tolerate.
Speaker: Got it. Yeah. Hopefully those same issues are good. We're fairly, we're pretty good at recognizing when this might be a little bit too much for the register office. So we'll, we'll tell our clients before him.
Speaker: Yeah. And the registrar's office, is that when you're dealing with real estate transaction title transfer that for, okay. That's for both. Yeah. So in the register office, it's called the, it's called home kyoku in Japanese home kyoku. And I guess the English translation, the English translation is legal affairs bureau. Okay. And that's where you would file like corporate registrations and real estate transfer registrations. Is that a prefect based thing or is it as a all nationwide? There's one.
Speaker: one office or one, yeah, one office in each sort of area. In, for example, in Tokyo there, there's actually quite a few of them. So I think your company is being incorporated in the Minato Ward. Yes. I think that's where it is. Yeah. Of Tokyo. So within Tokyo Minato Ward, there is a legal affairs bureau office for that area.
Speaker: So you basically, you submit these applications to the legal affairs bureau office with jurisdiction over that location.
Speaker: Got it. Just thinking about the real estate transaction, again, just talking about the digital signatures. That was one of the things that, that kind of slowed us down and sending FedEx documents between Canada and Japan, it's $150 a pop. Yeah. Do you think that this could ever change, will ever change that a real estate transaction or incorporation could be done completely digitally? Well, it might. And I think you see sometimes in the news, sometimes in the news that they're, they're trying to
Speaker: it's like quote unquote modernize these things but yeah but it might happen someday but probably not for a while and I think you're probably gonna give and I would just imagine I don't know if this is true but I would imagine that there would be resistance from the hanko makers yeah
Speaker: Could we, I know we probably are too far on our own company, but could we customize like Honko? Could it Honko be a picture of a cat or something? Like what I'm curious. Well, it should be something reasonably similar to the name.
Speaker: Okay. Yeah. Got it. So if we had a, I guess our KK is Takamori, which is like what? High trees or high forest or something. Right. Like we had a forest on the hanko. Would that be accepted? I'm just from a creative artistic perspective, curious. And I suppose you could, you could, basically what we do is we register an impression of that hanko with the legal affairs bureau office, the register office. And, um.
Speaker: So I mean, there are certain size restrictions on the, there's some restrictions of the dimensions of the seal, but generally speaking, I think it would be something with the name of the company. Can you sign your name as a cat? I don't think so.
Speaker: Cool. Well, let's move on and I'll cut this real quick. Rob, do you, are you have a hard stop at the top of the hour? Or can you go over a little bit over? Yeah. Okay. Cool. I've got time for you guys. Okay. Awesome. I think the most wanted topic that people are going to listen to is business manager visa. So we've made a, we've made a company. We've made a bank account. Joey and I are both on tourist visas, but Hey, we want to spend.
Speaker: two years in Japan, maybe making this rental business. Can you talk a little bit about the business manager visa service and how are you guys involved? Okay. So I think at the start of this interview, I said that our office or we are licensed as a Shiho Shoshi office. And as I mentioned, the Shiho Shoshi specializes in these types of registrations visas or I'll just call it visas. Okay. Or it's not, it's legally, it's not the correct term, but I'll just call it a visa are typically handled by another
Speaker: professional in the japanese legal profession which is called a kyose shoshi similar sounding to to me confusing i'll spell them out for you guys later yeah i think specializes in for example licenses and permits visas these are the typical ones that they would do and i think the dictionary translation is administrative scrivener
Speaker: And again, I don't know what the hell that means, but our office is actually licensed. We actually hold both offices, both licenses. We can perform in corporations and we can also perform visa application services as well.
Speaker: Okay, so the business manager visa. Okay. Well, there are a lot of, okay. I guess I should probably just start off by saying that when a person applies for a visa in Japan, you, or especially like a working visa, you apply under a category which depends on what the person is actually going to be doing once they come to Japan.
Speaker: So for example, if, well, like Joey, let's say you come to Japan to work at an IT company, you would apply for an engineer visa because presumably that's the closest type of visa to what you would be doing as an engineer. So the business manager visa as the name implies, it's a visa for people who are coming to Japan to manage or operate a company. Okay. Got it. Right. So there's obviously like a lot of,
Speaker: a lot of things that are evaluated by the immigration bureau when somebody applies for these things, but usually these things are, well, not usually, they are always evaluated from two perspectives. One is the company, like how solid is the company? Is it legit? But they look at the company, and then the other aspect they look at is obviously the person.
Speaker: When we put together an application to apply for these visas, we request documents both related to the company and the applicant. So the first thing, then getting back to the business manager visa, is the person is applying to manage or operate a business. So sometimes what people ask us, we get, well, not ask us in,
Speaker: particular, but we've actually heard stories of these from other industry colleagues is that they get a situation where somebody sets up a company in Japan buys a condo and decides to rent it out. And that's all they do. That's all they do. They just buy one, a condo, like just one condo.
Speaker: that they could theoretically live in themselves, but they just buy it and they just run it out and they say, okay, this is my business. That's it. And as far as immigration is concerned, they don't consider that as a business. Okay. Good to know. All right.
Speaker: Yeah, they wouldn't consider that a business. If you're looking at collecting rental income, okay, perhaps if this company is set up in Japan and it purchases, it has purchased many properties or intends to purchase many properties. And therefore, from somebody looking at it from the outside, they would say, okay, yeah, this is a business. They're purchasing various properties and
Speaker: Yeah, so if you're going to say that you're going to be setting a company just to collect rental income and you only have one property and you don't intend to ever increase that, it would be probably pretty hard for you to convince immigration that this is a business. So the key thing is to understand that you need to be operating a business.
Speaker: So if it's like, for example, in your guys' case, Airbnb, I would imagine that you're looking at buying and selling properties, holding properties. In that case, it's a business. Right. So as part of that, when we actually submit the applications, you have to prepare and submit a business plan.
Speaker: And in that business plan, you would have to outline what you intend to do and all these things, right? That's one of the important factors. The other one or the other two is the amount of capital in the company. And I think we talked about this earlier that the minimum is one yen. In the case of a business manager visa, the company has to have at least 5 million yen.
Speaker: How much is that US dollar? 35 ,000 US dollars? So this is a minimum. So in your case, you set it up with a smaller amount. So when you're ready to apply for business manager visa, you can raise the capital of the company. So you can meet the minimum. So that's another one. And then the third one that a lot of people get stuck on is the office requirement. So business manager visa requires that the company
Speaker: has an actual office like a real office. So it can't be a virtual office. It can't be like a share office. It's got to be an office space dedicated for the company. So that also means that you can't, it can't be like your house.
Speaker: Got it. Some follow -up questions on that. And starting from the end there for context, we had a house burned down a couple blocks from a couple of houses down from us and Joey and I were thinking like, do we buy that lot and put a quote unquote office? Like do people check that or if we have an address or a mailing PO box equivalent and it's an empty lot, for example. Okay. So when we, when we apply for the business manager visa as part of the application package, we have to submit photographs.
Speaker: of the office exterior and the interior burned down a lot. Yeah, not going to work. All right. You got to submit photographs of the exterior or interior of the, of the facility or the building. So the interior would have to actually look like an office setup. The interior would need to look like an opposite. Yeah. Interesting. And the, from the outside, there would have to be like a sign to show that it's, this is the office of Takamori KK and there's got to be like an, a dedicated mailbox for the company.
Speaker: We would also be we'd also asked to submit floor plans. Of the office, which you. Technically have, let's say it is it's not your primary residence. It's a second home, but you only use portion of it as there's an office. Is.
Speaker: That one's a really hard one, and it's probably case by case. But in principle, there has to be a clear separation between the office and the residence. Got it. So let's say you were to use a house. The house would actually have to be partitioned so that it is clearly separate from where you actually live. So for example, separate entrances.
Speaker: Yeah, I see. You can't go into your Yeah, you are. Generally, we would suggest that you rent a small office, there's no size requirement for the office, get a small office. Yeah, yeah.
Speaker: Joey and I are thinking about buying an Akia office and now it's good that you told us that we're going to retrofit it, office chairs, work to kind of make it look like an office. Right. Right. Question on the capital actually. So you mentioned that, let's say $35 ,000, does that just need to be there during application time or does that need to stay there for some holding period? Okay. So when you register.
Speaker: a capital amount for the company. That amount actually appears on the company's registration certificate. It'll show the amount of capital. So we would register the capital increase. So the certificate would show that Takamori KK has 5 million yen capital. That's proof right there. It's formally registered.
Speaker: And I know we registered our company in Minato in Tokyo, but let's say if we were trying to move that to an Akiya we bought down in, I don't know, Shikoku or Ehime, for example. Is that possible? And what are kind of transfer fees for that? Yeah, of course it's possible. You can relocate the address of your company. That's something that we do all the time for our clients.
Speaker: Back, back to, sorry, question about the, the business manager visa again, sorry, to kind of a two part question, but what about a spouse? If you have a spouse, can they get on the visa? And also you can apply, um, for family dependent. Usually we submit those applications at the same time simultaneously. And obviously the family dependent visa being issued is going to be contingent on the main visa applicant being approved.
Speaker: And they would, immigration would probably look at things that look at things like, Oh, how much salary are you going to be earning in Japan? Is it enough to be able to support two people? So yes, it's possible. So second question there is in our case, both of us potentially at the same time would like to get a visa.
Speaker: I know you mentioned before that only one person can get the business manager visa, but there is a way to set it up where the second person is the employee of the company. Yeah. So in principle, unless the company is really like a huge, massive organization, typically a company, you can only apply for one business manager visa for that company. As far as applying for the
Speaker: visas for the two of you. One of you could say that you were the business manager and apply for that. And the other could apply as basically as an employee of the company. And there would be a different category of visa for that.
Speaker: Interesting. So I guess, let's say, yeah, Joey and I, we bought this house. We're starting to get income. It shows enough income to support, let's say me and my wife. And then Joey's coming like, how did you structure that? So Joey, let's say Joey's the company head, or I guess gets the business manager visa. If me and my wife were to come.
Speaker: What kind of visa would that look like? Well, you can look at them. Okay. So first you can look at the business manager or the business manager visa would be almost looked at could, could almost be viewed as the visa for the employer. And then the most common white collar visa would be the specialist in humanities, international services, which covers like a really broad scope, like marketing manager kind of thing.
Speaker: That visa would be for the employee. So you would structure it as one of you is the employer, one is the employee. Okay. So from a success perspective, does that matter? That doesn't matter. No. Okay. Got it. What, so I'm a software engineer here in Canada and the U S is there, could I say Takei was a business manager. Could I work as a software engineer at the
Speaker: my own company or just cause you mentioned the pipes as the employee, right? Should it match my personal background? No, it doesn't. Well, it should match what you're going to be doing in Japan. So for example, if you're going to be like, I don't know, let's say you're marketing manager or something like that. And marketing could include building websites and stuff. It would be a marketing tool, I suppose. Yeah. Yeah. Match it to what you're doing in Japan. Exactly. Yeah.
Speaker: Got it. What's the average time? Let's say I want to move to Japan and get this business manager visa. I have things set up application process. I know here in the U S we have a really lengthy process. What, what's that look like in Japan? Usually. Okay. So there'd be probably first there'll be the lead up time. So the time for you to collect all the information that we need to put together your application package. And we usually say that takes about a month or so to do.
Speaker: Okay. So we would send a list. Okay. We want you to provide us with this and that. And usually that takes about a month or so. And then we put together the application package. And then after it's submitted to immigration, the immigration department will perform their evaluation. And it's really hard to say how long it will take, but from experience, we usually find this takes about two or three months. Yeah.
Speaker: Okay. So after let's say three months, immigration approves it. What they'll do, they will send us a, well, they'll send us a letter to say that it's been approved. And then we would forward that letter to you in the U S or in Canada. And then you would take that letter to the Japanese consulate. That's closest to where, wherever you are. And then they would actually issue the landing permits in your passport. You come to Japan and then you're a resident.
Speaker: How long does it take? Okay, one month lead time, three months evaluation, and then the landing permit. So let's say about five months or so. Could you start this process on a tourist visa?
Speaker: Or would you have to leave? Okay. So in principle, so again, this is in principle. Yeah. In principle, you were supposed to apply for this from outside of the country. You could theoretically come here on a tourist visa, begin collecting all the documents and stuff, go back home for a bit. And then, yeah. And then come back. Okay. Is there like a minimum duration you need to remain in the country to keep the V the business manager visa, for example, valid?
Speaker: isn't like a minimum like from a like the immigration perspective there isn't like a set number of days you got to be here but i think you'll find that there might be tax issues it's a possibility okay and another thing we find is if in the future you're considering permanent residency they will look at your the number of days you're in japan so just in terms of
Speaker: That visa as a spot visa, yeah, there, it wouldn't really be like a set number of days you have to be here, but in terms of other applications that other, yeah, it could have other implications. Okay. Got it. And how long are these business manager visas for? Are they two years? I know there's a couple of different. Okay. Visas are typically one, three or five years.
Speaker: So when you apply, you tell immigration how long a visa you want. We can say five years. But how long it's actually issued for is at their discretion. And usually when it's a new company and you're a first time applicant, in almost all cases, it'll be one year. Gotcha. And then you can apply to extend that visa.
Speaker: And when you apply to extend that visa, they will look at things like the financial status of the company during that course of that year, right?
Speaker: Okay. This might not be your wheelhouse, but let's say we're, we've been on a business manager visa for five years. How long does it take to go PR if we decide Japan's the spot we want to be? Okay. So again, this is the, in general, for most cases, you have to have been living in Japan for 10 consecutive years to apply for permanent residency. Depending on the type of visa that you apply for, there's a possibility to have that shortened.
Speaker: And when, again, that just opens up like a discussion on another type of visa, but basically there's, in addition to the business manager visa, there's what we call highly skilled professional, highly skilled foreign professional visa, which we just call HSP for short, highly skilled professional. And you can think of the HSP status as being like a gold version visa. Okay.
Speaker: So you would apply for a business manager visas HSP status. So obviously applying for this status
Speaker: means that you have to clear all of the regular business manager requirements plus additional requirements. And additional requirements would be things such as your educational background, career history, the amount of salary that you're going to earn from the company, et cetera. But if you are given this HSP category visa, it's for five years.
Speaker: And so it's not this one, three, five thing, but it's five years. And by holding that visa, you can act theoretically, you could apply for permanent residency after just three years of being in Japan. So it's something that it's something to look into when, when you get to be a highly skilled professional. Yeah, it is. That's you, Joey. That's you, your computer software. Yeah. What kind of people secure these visas? Well, usually if they're people, okay. They're okay. In most cases, fairly high income earners.
Speaker: So like over a hundred K a year, pretty, pretty strong educational background and fairly like the career in their field. We've actually had quite a few of these applications. We do quite a few. Yeah. Wow. You do a little bit of everything. So you do.
Speaker: Everything Shihou Shoshi title transfers, you do business, creating businesses. You also do visas, right? That's, yeah, that's probably what we do. Yeah. Okay. Wow. You got your work cut out for you. All right. Want to switch gears, final segment here. Got some hot questions for you, Rob. Totally okay. If you don't have answers to these, Joey and I, we're going through the real estate process in Japan, just kind of frustrated a little bit by all the hankos, all the paperwork and.
Speaker: We're trying to figure out what we can digitally transform DX. That's the hot word we've learned about recently. What, what are you seeing in the specifically the real estate kind of paperwork segment, any opportunity for that to change in the near future? Or is it kind of just.
Speaker: Stuck in the past a little bit for the real estate side for the contracts. Those are probably things that your real estate agent is gonna explain to you so I'm not gonna really speak for them so I don't know what their requirements are but as far as what we Submit to the register office to perform the registrations as we've already discussed you pretty much have to sign things
Speaker: What if, so this, again, we're getting a little crazier, a little more experimental here. What if, so this is what we did when we bought our house. We actually gave a limited power of attorney to this company in Fukuoka to sign documents on our behalf. So what if we had a client give us power of attorney, right? And then, or sorry, we gave our teammate in Japan, power of attorney. Then could they do all the wet signatures, hankos on their behalf?
Speaker: Yeah. That's probably something you're going to want to again, discuss with you really, um, that the, the agent, the broker that's handling this. Okay. Yeah. Again, totally understand about the, we're pushing the boundaries here. What I want your estimate on when do you think Japan year wise is going to adopt digital signatures? If you're like, this is a hundred years, 50 years, 30 years. Like I love Daki sign. I mean, I think.
Speaker: Certain industries are just very traditional. Yeah. For example, the banking industry is probably very traditional as you guys are probably finding the registration legal, the register office, I think it's pretty traditional as well. I'm traditional as well. I don't know.
Speaker: Uh, it's hard to say you hear these things in the 100 years. Well, we won't be around to find that out. Would we? 15, 50 years, maybe 50 years. You might be around, but I probably won't. Okay. Okay. So do you think within 50 years, we might get digital signatures? Okay. Okay. Got it. 50 years. We'll be ready. You guys might, I'll be long gone. We're trying to push that. And if you or anyone listening to this, uh, season opportunity there, I think.
Speaker: I see how quick we move a little while west over here in United States with signatures, but I also do see the benefit of digital signatures as me and Joey are sending these documents for 175 bucks for a piece of paper. If you guys, if you guys are become resident in Japan.
Speaker: If you guys become resident in Japan, so you have a visa and you're actually a resident in Japan, you can register your personal hanko, like a personal stamp, and that would be your signature. In that case, you would be using that hanko instead of actually signing things. So you think that digital hanko is a higher potential than digital signatures?
Speaker: I'm thinking of business ideas here for Joey and I to get this business manager visa. Digital Hanco business. I think it has a higher chance than digital signatures.
Speaker: Well, I mean, for, for regular transactions and stuff, if both parties are fine with it, even we see digital signatures being used. That's assuming that both parties of the contract agree to that, but certain traditional areas, they're pretty resistant to change. So you kind of just have to go the way it is.
Speaker: Yep. Okay. Speaking of resistant to change, both me and Joey are crypto guys in the past. Okay. Go all time highs for Bitcoin. Let's go. I know. So it's, I'm a big fan of like tokenization of real world assets. I think we're far away from that, but thinking of putting titles on blockchain technology, eliminating maybe the discrepancy of who owns this property. Do you see opportunity or some appetite in Japan for that kind of stuff?
Speaker: There might be, but years out. Yeah. Yeah. I don't know. I think that's might be a ways away. Okay. Yeah. That's something we thought about too. Like one of the big friction points for us has been transferring money across borders. Do we buy these properties and we sell them for X Bitcoin and figure out how we can do the on -ramp and off -ramp there. But those are things we've kind of dreamt about. I know we're many years from that, but it's probably crypto is coming and yeah. Okay.
Speaker: That's good. So do you think like the average government official is probably not going to be pro crypto for the future? Right? Probably not. Okay. All right. What's it going to take? Is it just time? You think probably yeah, probably time. Okay. Got it. All right. Well, I think those are all the questions I had, Joey, anything else for Rob?
Speaker: Not what is a Scrivener was the big one for me. I didn't know that till right now. I'll shoot an email after this and I'll just go over. There's actually quite a few of them. I don't know if anyone's, I don't know if you or if anyone is interested, but in the Japanese legal profession, there's, we call it Bengoshi Bengoshi would be. Yeah. That is the equivalent of an attorney or a lawyer in the Western sense. So these guys can do everything. Oh, okay. These guys are like almighty. They're.
Speaker: They sit at the very top, the pinnacle of the legal profession.
Speaker: They also charge a lot too, but there's the top. And then I wouldn't say beneath, but handling different aspects of the legal profession. For example, I mean, the registration process in Japan is quite complicated. There's a lot of things that need to be done and we need to be fairly specialized in that field to be able to prepare and submit all the documents exactly the way the register office wants to see them. So those things are done by the Shiho associate.
Speaker: And then, as I mentioned, the Gyo Seishoshi does the permits and the visas and these types of things. And then there's another one called the Sharoshi. These guys do social insurance and labor related issues. So they would do, they would have a payroll matters and all the employment insurance and all that stuff.
Speaker: and then there's another one called the Zaydishi and these guys are basically I guess they'd be like a chartered accountant or something like that and these guys do tax related things and then there's a couple of other ones as well but those are like the main characters that you might encounter
Speaker: We'll have to go down the list and interview each one. All right. Well, I guess Rob, thank you so much for being on this. One last thing. Do you mind where can people find you? What's the best way for people to contact you? We'll also put your website and email in the. Okay. Sure. I'll just send you the link to our website. We have an inquiry form there and you can just contact us through that or you just email us directly.
Speaker: Perfect. Well, Hey, thanks for being on this. Really appreciate it. You've demystified a lot of questions for us. And I think a lot of it listeners. So thank you so much. Thanks a lot. It was fun being, it was fun being on this. Now we got, you got to do this in the evening though. So I can hear where we're in Tokyo. We'll come, we'll do a live version.
