Opening a Bank Account & Managing Your Taxes in Japan

Jump right in:

• How to Open a Bank Account in Japan?
• Popular banks for expats
• What is the Tax System in Japan?

How to open a bank account in Japan

Learning how to open a bank account in Japan as an expat is easy as long as you have all the necessary documents ready. At most banks, it’s possible to simply walk in and ask to open an account without booking an appointment first. If you don’t have a strong grasp of the Japanese language, this could be a bit of a challenge. Nearly all official forms in Japan, including those needed to open a bank account, will be written in Japanese. Major banks often have English-speaking employees.

When you open a bank account in Japan, you’ll ask to open a futsū yokin, which is a general deposit account. The primary requirement when opening this account as an expat is to have a residence permit. You cannot open a bank account with a tourist visa. Depending on the bank, you may also be required to provide a hanko seal (personal stamp), but this will not always be the case. Most international banks will also accept a handwritten signature.

During the process, expats may be surprised when asked if they are a part of a criminal organization. Do not be offended — this is a standard question and asked of everyone opening an account in Japan.

Requirements to open a bank account

Requirements to open a Japanese bank account will vary from bank to bank, but on average you’ll be asked to present:

• your passport

• your Japanese visa

• your residence card (zariyu card)

• Japanese address and phone number

• your “my number card” (social security card)

• hanko seal / personal stamp

Once you’ve submitted the required documents, you’ll be given a small passbook with your account name, account number, and the three-digit sort code for your local bank branch. You should receive your ATM card in the mail within a week of opening your account.

It may be surprising to learn that Japanese society is very reliant on cash. Because of this, you'll want to have cash on you at all times. Luckily, you can find ATMs fairly easily whether you’re in the city or countryside.

Can you open a Japanese bank account from abroad?

Setting up a bank account in Japan from abroad is not possible as you’ll need to present your visa and residence card in person to your chosen Japanese bank. You must have a residence permit to open a bank account in Japan.

Popular Banks for Expats

Because Japan can sometimes make life hard for foreigners given the language barrier, there are two banks that are especially popular among the expat community.

The first is Japan Post (Yucho Ginko). Japan Post Bank is popular because you don’t have to have a personal Japanese phone number to open an account, nor do you need a hanko. Instead, you can list your work number and sign the papers with your written signature (a rarity in Japan as the hanko is required of most official documents). You can also open a Japan Post Bank account without six months’ residency or a job contract, if you have at least three months left on your residence card. The account will have limited services, though.

The second bank popular among foreigners is Shinsei Bank. For this bank, you need to have a personal Japanese number, have been a resident for at least six months, and possess a hanko. This bank is also popular because all forms are written in, and can be filled out in, English.

Shinsei Bank is linked to most ATMs found in Japan’s 7-Eleven convenience stores, and they don’t charge withdrawal fees for account holders.

Top banks in Japan

If having a hanko or personal Japanese phone number is not an inconvenience for you, the following banks are some of the top-rated in Japan:

• Resona Bank

• Bank of Yokohama

• Shizuoka Bank

• MUFG Bank

• Mizuho Bank

• Norinchukin Bank

• SMBC

Best online banks in Japan

Although Japan is a technically innovative society, banking is still largely traditional. Online banking is possible, but many transactions require residents to visit their bank in person.

You’ll find the best online banking options with the major bank branches:

• Rakuten Bank

• Sony Bank

• SMBC

• Seven Bank

• Japan Post Bank

• Shinsei Bank

Some applications may only be available in Japanese. You may also find yourself being able to transfer and receive money through the popular instant messaging service Line.

Top international banks in Japan

In addition to national Japanese banks, the island nation is also home to many international banks:

• Bank of America

• Barclay’s

• JPMorgan Chase Bank

• HSBC

• ING

• BNP Paribas

• Deutsche Bank

Banking fees and minimum deposit

You may have to pay a fee each time you use an ATM, but on average the cost of having a Japanese bank account is very low.

• Account maintenance: The majority of bank accounts in Japan are no-fee bank accounts and do not require a minimum deposit.

• Domestic transfer fees: Transactions within the same bank are often free, but transactions with other banks can cost between 100–500 JPY (approx. 0.65–3.30 USD).

• International transactions: Transfers overseas can cost anywhere between 3000–7,500 JPY (approx. 20–50 USD).

• ATM fees: ATM withdrawals can cost around 0–220 JPY (approx. 0–1.40 USD) per transaction.

• Debit cards: Many banks charge a foreign transaction fee, which is often 1–3% of the purchase amount on debit cards, or a flat fee depending on your bank. Otherwise, domestic transactions are typically free.

What are the operating hours for banks in Japan?

Most banks in Japan operate from 09:00 to 15:00, Monday through Friday. They are typically closed on weekends and public holidays. Certain branches inside major train stations or shopping centers may have slightly extended hours. ATMs, on the other hand, typically have much longer operating hours and are often available 24/7, depending on the location and bank.

What is the Tax System in Japan?

Taxes in Japan are paid based on income, property, and consumption. These are paid at the national, prefectural, and municipal levels. Tax obligations will vary from individual to individual depending on your type of work, resident status, length of stay in Japan, and whether you’re financially responsible for just yourself or other dependents.

The tax system in Japan

Here are the main types of taxes you’ll encounter while living in Japan:

• Income tax: paid by residents on the national, prefectural, and municipal levels

• Residence tax: a tax paid by all Japanese residents, typically 10% of your income

• Enterprise tax: paid by self-employed individuals

• Property tax: municipal tax paid by those who own property

• Consumption tax: paid by consumers when buying goods or services, typically 10%, but the price can vary slightly depending on the good or service

• Vehicle-related tax: paid annually by those who own a vehicle

• Liquor, tobacco, and gasoline tax: paid on the national, prefecture, and municipal level

How much is income tax in Japan?

The income tax rate in Japan is based on the assessed tax liability of your previous year’s salary. This means the tax rate you pay in the current year is based on what you made the previous year.

While Japanese natives are taxed based on their worldwide income, non-Japanese nationals working in Japan will only be taxed on what they make within the country. However, this status changes based on your resident status in Japan.

• Non-resident: In Japan, a non-resident is classified as someone who has lived in the country for less than one year and doesn’t have their primary address listed in Japan. People in this category will only pay taxes on what they make in Japan, not money from abroad.

• Non-permanent resident: This is someone who has lived in Japan for one to five years, but does not have the intention of living in Japan permanently. This type of resident will pay Japanese income taxes, but they won’t pay income taxes on money made abroad unless it is sent to Japan.

• Permanent resident: A permanent resident is someone who has lived in Japan for over five years or enters the country with the intention of living there permanently. These residents will pay income taxes based on money made in Japan and abroad.

Tax returns

It’s uncommon in Japan for individuals to file their own tax returns. Typically, your company should do this for you. If they do, they should only need basic information from you to do so:

• your address

• your relationship status (single, married, divorced)

• number of dependents

You can do this at your local tax office, by mail, or online (e-tax). There are some exemptions for insurance costs, medical expenses, business operations, and self-employed people.

Types of tax returns in Japan

• Tax return A (kakutei shinkoku A): People who file under this tax return bracket are employees with a single income source and no complicated deductions.

• Tax return B (kakutei shinkoku B): People who file under this tax return brackets are freelancers, business owners self-employed individuals, and anyone with additional income.

You should file your own tax return if:

• You have more than one job.

• You plan on leaving Japan before 31 December (you must file for that year).

• You have a side income of more than 200,000 JPY (approx. 1,300 USD).

• Your employer doesn’t withhold taxes from your salary.

• You have an annual income that exceeds 20 million JPY (approx. 130,000 USD).

Residence tax

This is a very important tax to be aware of in Japan as it is often the one that is most overlooked. All residents living in Japan need to pay residence tax.

You aren’t taxed your first year but will owe for the previous year if still in Japan the next 1 January, even if you leave before the bill arrives. You'll receive the residence tax bill as a separate bill at your home from the local tax office. Like income tax, the residence tax is based on your previous year’s income and is typically 10 % of your income. You will not have to pay this tax during your first year in Japan.

When you receive this bill in the mail, you can pay for it at a local convenience store (such as a 7/11 or Lawson’s). You can work with your local tax office to break the payment into installments or one large annual payment.

Again, this tax is the one that is most often overlooked by expats. However, it’s important to stay up-to-date on the payments and not fall behind. Doing so could affect your visa renewal.

Taxes for self-employed people in Japan

Self-employed people in Japan are subject to income and residence as well as enterprise taxes. The residence tax rate will be based on your income and will be 10% just like for traditionally employed people. The enterprise tax is based on the type of work you do as well as your income and where you live in Japan. It will typically be around 3–5%.