Hello knowledgeable people. I am working at seishain, but also doing some gigs on the side. Gigs now seem to be getting big, and are set to start paying 2-4M jpy within the year.
I started getting worried about how I am supposed to deal with this.
- Just get paid in my personal account and add whatever extra amounts in my tax declaration next March? (so far I never had to do one, the company I work for takes care of it). Is this something people do, and is there a money cap over which it cannot happen, or is too costly?
- Go open a goudou gaisha? If yes, I have heard some horror stories of people being straight out refused by banks to have a company opened, because they could not provide enough justification for it. Can I just open one, without having already some MOU or services contract draft with clients in Japan? (my clients are all abroad).
by opalakia
5 comments
No need to open a company (if you don’t want to / it isn’t beneficial).
Make sure your current company is ok with the side work.
Both options are fine.
1. Yes, this is the correct procedure. You file taxes by yourself the following year (any time between January and mid March if you’re filing online). There is no cap, but you should be aware of your marginal tax rate and compare that with the corporate tax rate to judge whether it would be worth it to start a corporation.
2. First, a GK is not the only option, though it seems to be the most popular with foreigners for some reason. What you heard is either a misunderstanding or false information. Banks don’t decide whether or not you can open a company, only whether or not you can open a bank account. Prefectural banks and online banks are fairly easy to open an account with. Perhaps it’s easier to open an account as a KK rather than as a GK. Anybody can open a company without any justification for it.
As always, the above is presuming that 1. Your visa allows you to do this work and 2. Your main employer is ok with you doing side work.
Wow, 2-4m side gig. Can you share what you do?
1 is a fine option. If you’re doing this in an organised way you should register for blue form filling to get better tax treatment. Conventional wisdom is that incorporation makes sense for business income over about 8M/year, and frankly it’s enough hassle that I’d continue as a sole proprietor even above that.
You can form a company without having contracts or the like, but you may find it difficult to open a company bank account at least to start with. E.g. one bank recommended here actually straight up refuses to open accounts for companies that were founded less than a year ago.