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Employer of Record in Japan
Expand your orbit in Japan.
Velocity Global’s Japan Employer of Record solution enables a quick, seamless expansion solution without setting up an entity. This agile global expansion method expedites employee hiring and onboarding, delivering a faster and more affordable expansion solution than traditional entity establishment.
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JPY
Currency, Japanese yen
126.3 million
Population
$5.08 trillion
GDP
monthly
Payroll cycle
63rd Ranked
Ease of Doing Business
Japanese
Language
How can EOR help you
Hiring Considerations in Japan
Benefits of hiring in Japan
Home to the world’s third-largest economy, Japan’s diverse and innovative economy offers businesses across many sectors a stable market for growth. Tech firms, especially, find Japan an attractive market.
The Japanese government invests heavily in R&D and ranks among the top three countries in R&D spending as a percentage of GDP. This dedication extends into the private sector, with more patent applications per one million residents than in any other country.
Japan’s geography makes it a strategic location for continued activities in the Asia-Pacific region. With 18 free trade and economic partnership agreements, Japan offers significant export opportunities to neighboring markets.
Japan’s diverse and innovative economy offers businesses across many sectors a stable market for growth.
Challenges when expanding into Japan
Although Japan presents many growth opportunities, it ranks 29th regarding ease of doing business. Businesses must anticipate regulatory and bureaucratic factors that may not exist in their home country.
Companies must plan for the lengthy tax-paying process in Japan. At 129 hours per year to complete the required 19 payments, paying taxes in Japan is likely quite different from its domestic location.
Japan’s business culture departs from some Western norms despite its close relationship with many Western markets. Most Japanese businesses operate under a relatively formal, hierarchical structure, which may present communication and deal-making challenges for foreign companies.
Companies must plan for the lengthy tax-paying process in Japan.
Cultural nuances and must-knows for doing business in Japan
Bow during introductions, though most Japanese understand that Westerners may not immediately adhere to this cultural norm. Accordingly, handshakes are increasingly common. However, remember to bow, as it is a sign of respect.
Greet the most senior meeting members first. Doing so shows respect for both age and position.
Utilize a few Japanese phrases when appropriate. It is reasonable to expect at least one English-speaking participant, but using a few Japanese phrases goes a long way.
Avoid placing your hands in your pockets during a conversation, and do not look at your phone.
Greet the most senior meeting members first. Doing so shows respect for both age and position.
Onboarding
Hiring in Japan
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Minimum wages and salaries
- Japan’s national minimum wage is ¥901 per hour, or $8.45.
- The country’s Labor Ministry announced in August 2020 that the minimum wage will increase to ¥902 on October 1, 2020, or later.
- Minimum wages vary between regions and industries. If an employee is subject to two different minimums, they are entitled to the greater amount.
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Probation periods
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Bonuses
Leave
Leave entitlements in Japan
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Maternity leave in Japan
Expectant mothers receive six weeks’ paid leave before birth and eight weeks’ paid leave after giving birth. Mothers receive 100% of their salary during this time.
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Paternity leave in Japan
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National and regional leave in Japan
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Sick leave in Japan
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