How to Freelance in Japan [Your Paperwork Checklist]

How to Freelance in Japan [Your Paperwork Checklist]

Interested in how to freelance in Japan as a foreigner? Specifically, what paperwork should you complete to make it official? 

We’ve put together this paperwork checklist for freelancing in Japan to help you out. 

Here are the 4 to 5 pieces of paperwork that are essential to file + some other considerations to get your freelance career in Japan off to a good start. 

1. Notification of Opening a Sole Proprietorship [開業届]

The official title of this form is 「個人事業の開業・廃業等届出書」= kojinjigyou no kaigyou, haigyou nado todokede sho, translated as "Notification of Opening or Closing of a Sole Proprietorship." 

Often, it is simply referred to as 開業届 = kaigyou todoke.

This form notifies your tax office that you are starting up a business, and you are required to submit it within a month of starting your freelance career. We have an article dedicated to this topic: Sole Proprietorship in Japan: Your Quickstart Guide.

You can find the form here on the National Tax Agency (NTA) site, and then use this page to find out which tax office to submit it to. Submission of the form can be in-person, via mail, or online. 

You’ll want to keep a copy of your kaigyou todoke in safekeeping, as it is often requested when opening a business bank account and completing other paperwork related to freelancing. 

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2. Application for Approval of the Blue Tax Return [青色申告承認申請書]

The next form to fill out and submit along with your kaigyou todoke is an application called 青色申告承認申請書 = aoiro shinkoku shounin shinsei sho, which will allow you to submit the blue tax return. 

The blue tax return provides significant tax breaks for sole proprietors, so although this application is not mandatory, if you want to ease your upcoming tax bill, then consider this an essential step to that end.

The application form must be submitted by March 15 of the year in which you plan to file a blue tax return. If you start your business in the middle of the year, you can submit the form within two months of the start of your business.

The form is here on the NTA site, and you can send it in along with your kaigyo todoke to your local tax office.

3. Applying for National Pension [国民年金の手続き]

As an employee of a Japanese company, your company split the cost of your National Pension premium and deducted the pension sum from your salary. 

But now, as a freelancer/sole proprietor, you must apply and pay for national pension premiums for yourself within 14 days from the day after you leave your company.

You can apply to begin National Pension payments at the municipal office of the city or ward where you live. Make sure to bring your pension book or a 通知書 = tsuuchi sho that shows your pension number when you go to the city office.  

4. Applying for National Health Insurance [国民健康保険の手続き]

While it is possible to remain enrolled in your company’s health insurance for up to 2 years after you leave the company, most freelancers and sole proprietors opt against this option as the premiums will exceed what you used to pay. 

In almost all cases, freelancers will choose to enroll in 国民健康保険 = kokumin kenkou hoken, because all residents of Japan must be enrolled in the public health system.

You can apply for kokumin kenkou hoken at the municipal office of the city or ward where you live, and this should be done within 14 days after your last day at your previous company. 

Each city has a different rate for premiums, but all of them include a calculation that factors in income reported for the previous year. 

5. Applying for a Work Permit Outside of Your Current Visa Category [資格外活動許可申請]

For foreigners already residing in Japan, if you would like to work as a freelancer within the same field as your visa category, you can do so for the duration of your current visa without taking this step. 

However, if you want to work and earn money in a different visa category from the one specified on your visa, you will need to apply for a permit that will allow you to engage in activities other than what is specified on your current visa. 

The application is called 資格外活動許可申請書 = shikakugai katsudou kyoka shinseisho.

To apply, simply fill out this application (available with English captions) and bring it along with your passport, residence card, and a document stating the activities in which you wish to engage to an immigration office. 

Think of it like a self-sponsor visa, where you will be in charge of your work.

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Is there a freelance visa for Japan? 

For those outside of Japan who wish to get a freelance visa, suffice it to say, there is no “freelance visa” category that will grant you Japanese residence. Yet, having a legit visa for Japan and being freelance is possible. 

Essentially, you will need a long-term contract with a client company/organization in Japan that is willing to be your visa sponsor for the COE application. (This is, naturally, subject to you meeting the other requirements for the visa type you are applying for, and the contract with your client in Japan should be for the length of 1 year at least and provide a minimum of ¥200,000 yen per month.)

A notable point: On the topic of freelance visas for Japan, one Redditor has outlined here how they were able to get a visa extension using a kaigyou todoke, proof of tax, and proof of payment slips which took the place of client contracts/sponsors. But, of course, we definitely recommend consulting with an immigration lawyer to answer any questions you may have and for peace of mind. 

👉 On the topic of visas for freelancers in Japan, this guide by Kimi was quite thorough. 

6. Further steps to consider as a freelancer in Japan 

While these next steps aren’t mandatory in Japan, the following business-savvy actions might be worth considering. 

a. A business address that isn’t your home address

Many freelancers start off by working from home, which keeps overhead low. However, one drawback to WFH is the necessity of listing an address on invoices and other business materials to prove legitimacy. If you want to avoid putting your home address on invoices or other business materials, we’d recommend using a virtual mailbox service that gives you a unique business address. This way you can check your physical business mail from your home and protect your private home address.

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b. A dedicated business bank account 

Most accountants advise freelancers and sole proprietors to open a separate bank account for their business. This isn’t mandated and you won’t get directly penalized if you don’t have a dedicated business bank account. However, in order to streamline your accounting process, it is generally recommended that you separate your business and personal bank accounts. One solution here is to designate an existing personal bank account the one you use solely for business purposes. 

c. A dedicated business credit card

As a freelancer, your income will likely fluctuate from month to month. Therefore, many Japanese business sites recommend getting a credit card before leaving your current employment, as your income will look stable during the credit card check. Additionally, having a credit card that is dedicated to business-related items will be easier for you to sort through when doing accounting for your business. 

Frequently asked questions about freelancing in Japan

Is freelancing allowed in Japan? 

Freelancing is allowed in Japan, and there are no government laws that prohibit it. According to Lancers’ 2021 report, the freelance population in Japan increased by 5 million compared to 2020. The report stated that 24% of Japan’s working population can be classified as freelancers.  

How can I become a freelancer in Japan?

The main way to work for yourself in Japan is to become a freelancer, also known as a sole proprietor (kojin jigyo nushi 個人事業主).

Can I freelance in Japan as a foreigner?

Yes, it is definitely possible for foreigners to do freelance work in Japan. However, it's important to note that to initially enter Japan, you will need a sponsored job. Once you have established this, you can certainly do freelance work on the side for some extra income.

What are some of the best freelance websites in Japan?

Some of the top freelance websites in Japan include World In Freelance, Fivver, Upwork, Freelancer.jp, Crowdworks, Lancers.jp, Crowdtech.jp, and IT kyūjin Nabi.

What is the official status of a freelancer in Japan?

In Japan, a "Freelancer" is officially named a sole proprietor (kojin jigyo nushi 個人事業主) and needs to be registered at the tax office.

What is the process to apply for freelance work in Japan?

To apply for freelance work in Japan, fill out the necessary paperwork in the checklist provided by MailMate, which links to all the needed forms on the official website of the National Tax Agency.

How much do freelancers make in Japan? 

In May 2020, the cabinet that overseas Japan’s economic revitalization conducted a survey of 7,478 freelancers in Japan. The survey results showed a median annual income of ¥2 to ¥3 million for freelancers (Japanese PDF). In a separate report by Lancers in 2021, the average annual income of freelancers in Japan was recorded at ¥1.46 million per year.

What type of online work-from-home jobs in Japan are there? 

Popular work from home jobs in Japan for foreigners include the following top choices:

  1. Online English language instruction. 

  2. Online English to Japanese or Japanese to English translation.

  3. Software engineering.

  4. Bilingual customer support. 

  5. Recruitment consulting. 

  6. Virtual assistant support. 

There are other ways to earn money online in Japan, but the above are the most popular.

What does kojin jigyo mean? 

Kojin jigyo means “sole proprietorship.” The kanji for kojin jigyo is 個人事業. Kojin jigyo refers to an individual running a business on one’s own. 

Kojin jigyo nushi means “sole proprietor.” The kanji for kojin jigyo nushi is 個人事業. It refers to the individual behind the sole proprietorship.  

What’s the difference between sole proprietors and freelancers in Japan? 

In Japan, “freelance” refers to a way of working that consists of contracts on a project-by-project basis. “Sole proprietorships” in Japan are a tax classification assigned when submitting a kaigyo todoke "opening notification" to the tax office. In short, freelance refers to a style of working under project contracts, and sole proprietorships (kojin jigyo) are a taxable group under Japan’s tax law.

How much tax do freelancers pay in Japan? 

Income taxes in Japan for sole proprietors depend on the amount of income earned. 

  • Taxable income under ¥1,949,000 has a 5% tax rate.

  • Taxable income from ¥1,950,000 to ¥3,299,000 has a 10% tax rate.

  • Taxable income from ¥3,300,000 to ¥6,949,000 has a 20% tax rate.

  • Taxable income from ¥6,950,000 to ¥8,999,000 has a 23% tax rate.

  • Taxable income from ¥9,000,000 to ¥17,999,000 has a 33% tax rate.

  • Taxable income from ¥18,000,000 to ¥39,999,000 has a 40% tax rate. 

Taxable income from ¥40,000,000 on up has a 45% tax rate.  Here’s a chart provided by JETRO. 

Image. Japan’s individual income tax rates, chart by JETRO.

Image. Japan’s individual income tax rates, chart by JETRO

In 2020, the National Tax Agency released a survey of income tax returns for the year 2018. The report showed the average annual income of sole proprietors in 2018 to be 4.17 million yen.  Based on the figures published in that report, web magazine Moneyism calculated the average annual tax amounts paid by the various income tax brackets in Japan. Sole proprietors with taxable income of less than 1 million yen, paid an average of ¥8300 on income tax. On the other side of the scale, sole proprietors with taxable income of over ¥5 million and under ¥10 million paid an average of ¥533,300 on income tax.

Image. Google translated chart showing average tax amounts of various income brackets in Japan in 2018, based on a 2020 National Tax Agency Report. Chart by Moneyism.

Image. Google translated chart showing average tax amounts of various income brackets in Japan in 2018, based on a 2020 National Tax Agency Report. Chart by Moneyism

Final thoughts

For foreign residents who are ready to explore freelancing in Japan, one of the primary hurdles is making sure your visa paperwork is in order. But once that is cleared up, you must still complete these other pieces of paperwork to be in good standing with Japanese regulations. 

If you need further assistance, consider TOSBEC in Tokyo. The Tokyo One-Stop Business Establishment Center - TOSBEC will provide individuals with free assistance on information related to taxes, social welfare, and immigration issues.

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