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Going it Alone: A Guide to Self-Employment in Japan

Working as an English teacher in Japan certainly has its perks. As a public school Assistant Language Teacher (ALT) I love the freedom this job gives me. I can finish work at 4.15pm every day, I have almost no weekend or evening work, and anytime I do work outside regular hours I am compensated with extra days off later. Additionally, most days I teach no more than 3 or 4 classes, which leaves me plenty of free time at my desk to work on lovely blogs and other musings, such as the one you are reading now!

But of course the path of an ALT is not entirely paved with gold, there are a number of downsides to this job.

Whilst I am lucky to be reasonably well-paid in this job, across the industry salaries have been in freefall for a number of years. The simple fact is, for all my experience and all the extra benefits of being a government contracted worker, my take home salary is about 10% less now than it was when I first came to Japan back in 2006. Additionally, fringe benefits aren’t what they once were either. During my time in Okayama Prefecture, I received 20 days annual vacation, paid sick leave and a generous housing allowance on top of my expenses. Such conditions are unheard of these days. Most teachers are now made to make do with the bare legal minimum of 10 paid holidays and no sick leave. I do a little better than this, but certainly conditions aren’t what they once were.

For a single man such as myself, a salary in the range of 250-300,000 yen per month, plus the little extra I make for the work I do for the good people here at Taiken Japan, is enough to enjoy a decent standard of living. However, I do hope to marry and have a family here someday, and Japanese societal norms being what they are, as the “man of the house” my future wife will probably want to stay at home whilst I become the primary breadwinner. In short, a teacher’s salary isn’t going to cut it if you want to provide a good life for your family. For this reason, more and more “long-termers” in Japan such as myself are beginning to explore the possibilities of starting our own businesses.

Photo : Sean MacEntee on Flickr

I know many foreigners who have done this in Japan, with varying degrees of success.

The most common type of personal business is of course the English conversation school or the private English teacher.
Becoming a private English teacher is, in principle, quite easy, but the logistics of going full-time with it are tricky.

First an important point to note: in legal terms, there is no such thing as a self-employed visa in Japan. However, in saying that, it is possible to self-sponsor your own visa come renewal time.

Photo : Icars on Flickr

So basically, if you want to go full time as a private teacher, you will have to get a job and enter Japan on an ordinary working visa in the first instance. Once you have been here for a time, you can then begin the process to move over to self-sponsorship.

To qualify for self-sponsorship, some basic criteria need to be met.

Firstly, you need to earn at least 250,000 yen per month and be able to prove this. One way of proving this could be monthly bank statements, and signed contracts to use your services from existing clients. These will all need to be translated into Japanese.

Another important note, to qualify for this you will still need to have a business, school or organization as your main employer. For example, I have a friend who teaches various private students and a couple of corporate classes per week. For the purposes of the self-sponsored visa, he puts down the agency through which he gets his corporate work as his main employer. Listing a private individual as your main source of income is not acceptable.

You will also need to present documents to prove that your income tax contributions are up to date, as well as your city taxes. These documents can be obtained from your local ward office or city hall.

You also need a letter of release from your previous company, relinquishing their commitment to sponsoring your visa.
To make sure you keep your tax affairs above board, it is also recommended that you register as a sole trader with the local tax office before you make the visa application.

One other important note here, this type of self-sponsored visa is only available to certain visa types. For example, whilst specialist in humanities (the visa type usually issued to English conversation school teachers) is eligible, the instructor visa (issued to ALTs and college professors) is not. So if you are working as an ALT and you wish you to go self-employed you will also need to apply to have your visa changed over from an instructor visa, to a specialist in humanities.

Please bear in mind, that the immigration bureau are very thorough and methodical in their approval process. The process can take several weeks or even months and you may be asked for additional documentation to prove your suitability.

As I said earlier, there are 2 options available for setting up on your own in Japan.

The other option is an investor’s visa, which is a considerably more streamlined process, provided you have the funds available.

Photo : 401(K) 2012 on Flickr

There are a number of criteria that need to be met to qualify for investor status, but, in short, you need to have at least 5 million yen in working capital, a detailed and realistic business plan, and be setting up a company that will employ at least 2 full-time Japanese staff.

As with all immigration issues, what I am giving you here today is the briefest of summaries on the main issues. If you are seriously thinking of applying for self-sponsorship or investment visa status, I strongly recommend that you consult an immigration lawyer before you begin any applications. Remember that each individual application is different, and even if you meet all the criteria it is still at the discretion of the immigration bureau to accept or reject your application. Good luck.

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