Procedures Required to Purchase and Export Used Cars in Japan

We receive many inquiries about starting business to sell Japanese used cars overseas.

Since many Japanese people treat their cars as carefully as possible (for example, the bumpers of Japanese cars are often scratch-free), it seems that the price of used cars does not drop much when they are sold overseas.

To purchase and sell used cars in Japan, you must obtain a “secondhand dealer’s permit” from a regional police office. The condition is that there must be at least one sales office and one sales manager in Japan.

If you hire a Japanese person or a foreigner who is already resident in Japan, you can register that person as a sales manager.

If you are planning to come to Japan yourself and get ready to start a business, you will first have to obtain a visa (Business Manager visa).

You can start your business by:

  1. Register your company
  2. Obtain a business manager visa
  3. Acquire “secondhand dealer’s permit”
  4. Become a member of a car auction

Most of the foreign businesses use the car auction platform to purchase used car in Japan.

Kawasaki Onestop Business Startup Center can provide one-stop support for all of these steps.

For a brief information of starting a business in Japan, please see the YouTube video.

Another challenge for foreigners to start a business in Japan | Opening A Business Bank Account

For foreigners who want to start a business in Japan, there are many things that they have to do, such as finding an office, registering a company, and applying for a visa.
However, there are many specialists in Japan who can speak English, and we provide consultation and actual support. We at Onestop Kawasaki are a unique group of such specialists.

Today, let’s talk about another barrier you face when you set up a company, get a visa, get the business license you need, to start your business.

That is, “I can’t open a bank account in the name of a corporation.”
Japanese banks can easily open an account for individual account even if they are foreigners if they have a status of residence, but the hurdle is greatly raised when it comes to “corporate name”.
The reason is that in the case of a corporation, the transaction amount is also large, so “credibility” is judged more strictly. This is the same when a Japanese person starts a business individually.

On the other hand, Japan is said by the United Nations to be a country with loose restrictions on money laundering. The Financial Services Agency and other Japanese government agencies are closely monitoring the opening of bank accounts in the name of foreigners, which can be a hotbed for money laundering. Japanese used car export business is said to be the target. It seems that there have been malicious cases in the past. If you are planning a business to buy used cars in Japan and sell them overseas, you should be careful.

There are many documents required for this, and it takes time and effort to prepare financial plans and proof of assets currently owned by tax accountants and certified public accountants.
And the most confusing thing is that the criteria for opening an account have not been clarified openly.

In my experience, when I asked the bank why it was refused to open a new corporate account for a Pakistani entrepreneur, there was no further explanation saying, “I made a comprehensive decision.”
Eventually, the president gave up and decided to start the trading in his personal bank account. About a year later, the opening of a corporate account was finally approved due to the success of the individual transaction record and the appeal of the person’s enthusiastic attitude.

Talking about another case, when a foreigner started a business with the support from JETRO (Japan External Trade Organization), the person could easily open a corporate account with a support letter from JETRO. However, in order to receive JETRO support, it seems that the foreign headquarters must be of a certain size or the investment amount must be of a certain size.

When formulating a business plan, you may have to assume that there are such facts.

The walls to start a business in Japan

The 2020 Tokyo Olympics is coming soon, and there are increasing inquiries from foreigners who want to start a businesses in Japan, such as expanding sales channels for products in Japan, or importing Japanese products, etc. Both the central and local governments of Japan have begun policies such as special economic zones to support such trend. However, Japan is an island nation, and for 400 years from beginning of 17th century, Japan closed its country by restricting exchanges with foreign countries. As a result, there are many differences in the business environment. For many foreigners, it could be considered as a “wall”.
I would like to introduce such differences in Japanese business culture.

Wall 1 Government

The Japanese government has been active in accepting foreigners, but officials on the ground have not yet reached that level. Many are basically conservative, as inherited from the Meiji era. To start a business in Japan, you have to obtain permission or registration from various government offices. In order to start a business, such as the Legal Affairs Bureau of company registration, the Working visa to Immigration Service, and the used car business, you must submit a lot of documents to the police station to acquire secondhand dealer license and a tax office to import and sell liquor. Permission to start a business will not hurt you for being a foreigner, but explanations may be rough or inadequate some time.

Wall 2 Language

Unfortunately, you must submit your paper or electronically to get those permits. However, most of the documents are in Japanese. The only part that is accepted in English may be the visa application. Even the guidelines for obtaining permission are all in Japanese except for some visa-related items. Without support for those who can speak Japanese, there will be a lot of struggle to get permission. In order to obtain a business license, it is often necessary to determine the person in charge and take a seminar hosted by the government office, but most of the such seminars are limited to Japanese only. In the case of foreigners who cannot speak Japanese, there is no choice but to appoint or accompany someone who can speak Japanese.

Wall 3 Banking

In recent years, it has become increasingly difficult for foreign-invested companies to open corporate accounts in some industries, as Japanese financial authorities have put forward a policy to strengthen anti-money laundering measures.
Also, financing for foreigners is not very active, and financing for people other than those with permanent resident status or a Japanese spouse is not easy at present.

Wall 4 Business habits

The decision-making process of Japanese companies is very different from that of Western, Asian and other companies. It is often said that decision-making is slow, many business meetings, but no progress at all, have to exchange business cards with many people, but do not know who has the authority to decide. . . and so on.
A story about a Japanese company and a company in Zhejiang Province, China, said that the managers level agreed to launch a joint venture, and after that, the Japanese company delegates visited China many times, including the top management from Japan. In each case, the Chinese side responded in anticipation of when to give the go-ahead, but the Japanese side could not decide and ended up being neglected. Thus, negotiations with the Japanese also require patience.
They can all be described as one common character, a culture where responsibility is shared by as many people as possible. However, the Japanese have the habit of once they decide, they always do it.

To overcome these barriers, Onestop Kawasaki can support foreign entrepreneurs by using expertise of each member.