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Employer of Record Japan

Our Employer of Record in Japan service enables clients to hire employees without the need to operate a local legal entity there.

It makes a big difference to develop a new market with your own personnel on the ground. Particularly for functions related to sales & marketing, business development, distributor management, and service & maintenance, our customers are very satisfied using our Japan Employer of Record Service. 

Our customers and their local teams can be free of the distractions of administrative tasks and complex local requirements. So you can fully focus on the development of your core business.

If your local business grows large enough, you can easily transfer the employees to your own subsidiary. It also provides a quick exit strategy if necessary. In addition to Japan, we offer Employer of Record services in several other countries.

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Get in touch with us

alp atasoy

Alp Atasoy

Sales and Business Development Consultant

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+90 549 499 40 95
a.atasoy@fmcgroup.com

Employer of Record Japan - FMC Group's Approach

  • Quick, flexible, and easy entry into Japan in compliance with local employment laws
  • Complete control over business development with your own team
  • Good option for building up, managing, and supporting your distributors and key accounts by directly observing local developments and adjusting the strategy whenever necessary
  • Using our comprehensive recruitment experience for international clients, we can form a local team that fits your corporate culture.
  • Focusing on your core business instead of dealing with the time-consuming and complex local administrative tasks
  • Allowing for easy market exit if necessary
  • Integrating your employees into our team through motivational events and special meetings

EOR Japan Management & Reporting Flow

Management and Reporting Flow Chart

Hiring an Employee

Employment Contract – indefinite vs. fixed term

In Japan, it is considered standard practice for employers to create a written employment contract that outlines the terms of employment. This contract should specify the employee’s salary, benefits, duties, and termination policies. Additionally, any offer letter or employment agreement should list compensation and benefits in Japanese Yen, rather than in a foreign currency.

Probation Period

Probationary periods are common in Japan, typically lasting between 3 to 6 months. Any option to extend the probationary period must be clearly outlined in the employment contract.

Work Week, Overtime & Maximum Working Hours

Standard working hours for employees are generally capped at eight hours per day and 40 hours per week. Employees are entitled to premium pay for overtime (ranging from 25% to 50%) or night shifts (25%)

Income Tax

Taxable Income Tax Rate
0 – 1,950,000 5%
1,950,000 – 3,300,000 10%
3,300,000 – 6,950,000 20%
6,950,000 – 9,000,000 23%
9,000,000 – 18,000,000 33%
18,000,000 – 40,000,000 40%
over 40,000,000 45%

*local currency

Typical Benefits

In Japan, employees are entitled to a wide range of social security benefits, including health insurance, pension plans, and employment insurance, all of which are essential to the workforce’s welfare system.

Mandatory Benefits
Japanese labor laws outline several benefits that every employer must provide, which include:

  • Pension contributions
  • Health insurance
  • Unemployment insurance
  • Workers’ compensation
  • Annual health check-ups
  • Paid annual leave
  • Maternity leave

Additional Benefits
Employers may also offer supplementary benefits, such as:

  • Housing allowances
  • Flexible working hours
  • Holiday bonuses
  • Opportunities for telecommuting

Visa for the Employees

In Japan, “work visa” and “work permit” are often used interchangeably but refer to different stages in the process.

To work in Japan, a foreign national must first obtain a Certificate of Eligibility (CoE) from the Ministry of Justice, which confirms eligibility for a specific visa. The employer then uses the CoE to apply for the employee’s work visa, granting entry into Japan for employment purposes.

Key Steps for Obtaining a Work Visa:

  1. Obtain the CoE: The employer applies for the CoE on behalf of the employee, confirming eligibility for the visa type.
  2. Submit Visa Application: After receiving the CoE, the applicant applies for the visa at the Japanese embassy or consulate in their home country.
  3. Provide Required Documents: Submit necessary documents, such as a valid passport, visa application form, photos, and the CoE.
  4. Pay Visa Fee: The applicant pays the applicable processing fee.
  5. Wait for Processing: Visa processing can take several days to weeks.
  6. Receive Visa and Enter Japan: Upon approval, the visa is added to the passport, and the applicant enters Japan. A residence card is issued upon arrival.

Time off Policies

Public Holidays

Japan has 16 public holidays, during which employees receive a day off, including:

  • New Year’s Day
  • Coming of Age Day
  • Foundation Day
  • Vernal Equinox Day
  • Showa Day
  • Constitution Memorial Day
  • Greenery Day
  • Children’s Day
  • Marine Day
  • Mountain Day
  • Respect for the Aged Day
  • Autumnal Equinox Day
  • Health and Sports Day
  • Culture Day
  • Labour Thanksgiving Day
  • The Emperor’s Birthday

Annual Leave

In Japan, employees are entitled to paid annual leave, starting at 10 days per year and increasing with tenure:

  • 6 months: 10 days
  • 1.5 years: 11 days
  • 2.5 years: 12 days
  • 3.5 years: 14 days
  • 4.5 years: 16 days
  • 5.5 years: 18 days
  • 6.5 years and beyond: 20 days

Sick Leave

An employer is not typically obligated to provide paid leave for an employee absent due to illness or injury, unless specified in the employment contract.

Other Leave Types

Maternity and Paternity Leave
New mothers are eligible for 14 weeks of paid maternity leave, receiving two-thirds of their regular salary. This leave can be taken anytime from the third month of pregnancy up to eight months after childbirth.

Recent legislative updates now grant fathers up to four weeks of paternity leave, within eight weeks of their child’s birth, at 80% of their regular salary. Fathers have the option to take this leave as one continuous period or split it into two separate intervals.

Terminating an Employee

Japan’s employment laws provide strong protections, making employee termination subject to strict evidentiary and procedural requirements. These rules apply equally to regular and probationary employees.

Dismissals may be considered invalid if there are no reasonable grounds or if the termination is deemed unfair by societal standards. Grounds for termination typically include:

  • Significant poor performance or a breakdown in trust, such as fraud in the hiring process.
  • Breach of duties, policies, or internal rules.
  • Redundancy due to downsizing, economic factors, or corporate changes.

Employers must provide 30 days’ notice or pay in lieu of notice. It is customary for employees to also give 30 days’ notice when resigning.

Disclaimer: Although we carefully researched and compiled the above information, we do not give any guarantee with respect to the actuality, correctness, and completeness.