What is Furusato Nozei?

All taxpayers in Japan pay residence tax (jumin-zei). The tax amount is defined as 10% of your prior year’s taxable income with 6% going to the prefecture and 4% the municipal in which you live. Furusato nozei (“hometown tax payment”) is technically a voluntary contribution to a prefecture or municipality of your choosing (despite the name, contributions do not have to be to your hometown).

Why would I make a voluntary contribution to a prefecture or municipality?

Well, under the scheme if your contribution is greater than ¥2,000 then you can claim up to 20% of your residence tax back (the actual amount depends on various factors such as salary, number of dependents, etc., which I’ll get to below). Essentially, you are deciding to which prefecture or municipality part of your residence tax gets paid. But the real advantage of furusato nozei is that in return for your contribution that particular region or town sends you a “gift” as a token of appreciation. Typically these gifts are high-quality food produce (rice, meat, vegetables, etc.) that the area produces, but some regions also offer travel coupons, vouchers for the onsen, and other gifts. For the government the scheme helps address the tax collection inequalities between the cities and regional towns (furusato nozei typically sees money transfer from the former to the latter).

Participating in this scheme used to mean that you had to file an income tax return to state that you have made a contribution (a nuisance for the majority who have taxes automatically deducted from their salary), but as of April 2015 a “one stop exemption” system was introduced whereby this filing is no longer required so long as you limit your contribution to no more than five areas.

All told, for a ¥2,000 upfront payment you receive something in exchange for pre-paying tax. What’s not to like?

So how do I make a contribution?

Your contribution is made by purchasing your “gifts” through websites dedicated to the furusato nozei scheme (basically online shopping). You can search or filter by region but for the vast majority of people the municipal or prefecture to which they contribute will be determined by the products on offer. Here are some of the websites through which you can order:

The total exemption amount is a combination of exemptions from both income tax and residence tax. But most people just want to know the maximum they can contribute before they have to pay more than the obligatory ¥2,000. Essentially, “how much can I get for free?”

As mentioned above, the exact calculation is impacted by salary, number of dependents (and their age), household loan amount, and so on and so forth. If you want to get the exact figure then you will need to look at your tax filing and input the figures into calculators such as this one (only in Japanese).

Otherwise the following table should give you some idea of how much you can spend (figures are approximate; 2015).

And how do I get the money back?

If you purchase products from over five different areas (and thus have to submit an income tax filing) then you will get the money back in two parts: (1) a smaller portion from the tax authorities into your designated bank account about 1-2 months after filing your tax return, (2) the remaining portion will be deducted from your residence tax bill from June of the following year.

For those people that can’t be bothered with the hassle of tax filings then so long as you limit yourself to selecting produce from no more than five areas you don’t need to do the filing but you will need to submit a related form to each of the areas from which you purchased goods (they will send you a hard-copy). Example form here. Under this “one stop exemption scheme” the exemption amount will simply reduce your following year’s residence tax bill.

Am I still eligible as a foreigner?

Yes, so long as you’re living and working in the country and thus have taxes from which you can receive an exemption.

Anything else I should know?

Well, the prices on the websites would have you balking if you saw them in your local supermarket, but the goods are essentially free after all so it’s difficult to complain (they are, after all, thank you gifts rather than goods in exchange for the contribution). Secondly, you’re not dealing with amazon here; these are local producers that cannot cope with large orders or, in some cases like fruit and vegetables, the produce might not even be ready to ship so be prepared to wait for up to a month to receive your gift.

Nihonbashi or Nihombashi?

Is it Nihonbashi or Nihombashi? Shinbashi or Shimbashi? Those living in Japan will see both but which is correct? And why do we never see Shinjuku written Shimjuku? In theory the Japanese syllable ん is always written ‘n’ in English and yet…

Linguistically b, p, m, and w are called bilabial consonants because they force you to close or nearly close your lips to pronounce them. Try to pronounce the ‘n’ in Nihonbashi and your lips will soon close to pronounce the ‘b’ of bashi. In rōmaji there is no set rule on whether it should be an ‘n’ or an ‘m’ — but the confusion is brought about because when spoken at speed the ん syllable sounds closer to ‘m’ than ‘n’. That’s all there is to it.

Studying in Japan

Japan had about 185,000 foreign students studying at its universities and specialist schools in 2015. Asian students accounted for the vast majority of this figure (China alone was almost 95,000), whilst American students represented just over 1% of the total. The below is written to answer some key questions for those wanting to study in Japan.

Language School

How much does it cost?

For an intensive programme (5 days per week, 5 hours per day) tuition fees usually work out to approximately ¥20,000-25,000 per week, on top of which you may have some initial fees for registration and course materials. Classes are usually limited to 16-20 students.

What language school should I choose?

I would look at a the following factors in choosing your language school (beyond simply cost).

  • Mix of students. For native English speakers this isn’t so much of an issue as there is little chance of being in a class with a bunch of other English speakers (which will not help with your Japanese language studies). No matter where you study you will find that the majority of students are Chinese or Korean; although some language schools with affiliations to American universities may skew the trend as US students come over for a semester or so to gain credits as part of their programme).
  • Number of students per class. The fewer the better.
  • Nature of the course. Most “general” language courses won’t differ too much in content and will almost always use third-party textbooks supplemented perhaps with their own materials. However, if your ultimate aim is to go to university in Japan then you may want to find a course that specifically focuses on the Japanese Language Proficiency Test.
  • Teachers. Whilst it is impossible to judge from an internet page you should at least make sure that you will receive tuition from a number of different teachers — not least because you need to get used to different ways of speaking. In particular, you want to make sure that you have both instructor of both sex because, more so than English, the words and phrases used differs between males and females.

Should I do a homestay?

This depends on what you want to do in Japan and it can be hit-and-miss experience; however, if you’re fortunate to end up with a good family then it can be invaluable in terms of both language improvement and cultural experience.

University

It is well-known in Japan that whilst getting a place at university (especially at the more elite institutions) is difficult, once admitted students can generally coast along to graduation. Because of this it is very common for high-school students with their sights set on the likes of Tokyo University or Kyoto University (the Oxford and Cambridge of Japan) to spend one, two or even three years after high-school preparing for entrance examinations at private academies (juku). Those who did not get into university (or their first choice of university) first time round and opt to prepare for the following year’s entrance examination at the juku are referred to as rōnin (“masterless samurai”).

How much does it cost?

There are three types of universities in Japan: national, city, and private. The majority of universities (600 of the 780 or so total) are private. With the rest split 50/50 between national and city. Unlike some other countries, universities do not set different prices for foreign students.

Needless to say, private universities are the most expensive. Sophia University — a top-tier private university in Tokyo that is known for being expensive — has all-in (registration, etc.) freshman fees of ¥1.7 million and on-going tuition fees of just over ¥1 million. According to the Japan Study Support Group, the average tuition fees for private universities are ¥1 million for science courses and ¥0.7 million for the humanities. For both national and city universities this drops to a little over ¥0.5 million regardless of discipline.

How good does my Japanese have to be?

Typically universities will demand that foreign applicants hold at least N2 in the Japanese Language Proficiency Test (JLPT). However, this is not a hard and fast rule and will depend on the university and the nature of the course. Furthermore, there are a number of institutions in Tokyo that offer courses partially or entirely in English. Many universities will also have a separate entrance examination for foreign students as they understand that asking students who have studied for just one year at language school to handwrite essays in Japanese is a bit too much. For graduate school interviews are common and here they will get a better grasp of your Japanese speaking and listening skills.

How easy is it to get a job after graduation?

This naturally depends on your subject and the ranking of your university; but it is true to say that Japanese companies (even the more traditional ones) are becoming increasingly aware that they need employees who can speak a language other than Japanese to compete globally. English is naturally the most sought after but Chinese and Korean language skills are also in demand. Certainly compared to the U.S. or U.K. it is much easier to get a work visa in Japan once you have a job offer (you can apply for a five-year work visa) and with the job-hunting process beginning over one-year before graduation those who prepare ahead should have no issue.

Other Questions

Am I allowed to work?

Yes, the student visa allows you to work part-time (up to 28 hours per week during studies and 8 hours per day during the holidays).

What about living costs?

Japanese universities do not typically provide dormitories for students and so Japanese who go to university away from home must find a place to live on their own. If you’re studying at university or graduate school and are therefore in the country for one year then this shouldn’t be an issue. However, short-term contracts are quite rare in Japan which can be an issue for those looking to do a summer course at a language school, for instance. There might be an option for a homestay; otherwise you are best to enquire at the school about accommodation for short-term courses. Some schools do offer student dormitories, but this is not the norm. See here for an article on finding accommodation in Japan.

The Japan Study Support organisation calculated that the average monthly living expense (including tuition fees) for a student studying in Tokyo was ¥154,000.

How Do I Get Permanent Residency?

There are three basic official requirements you need to fulfill to be eligible to apply for permanent residency in Japan.

1. Be of good conduct

The person observes Japanese laws and his/her daily living as a resident does not invite any social criticism.”

2. Hold sufficient assets or have the ability to make an independent living

The person does not financially depend on someone in the society in his daily life, and his/her assets or ability, etc. are assumed to continue to provide him/her with a stable base of livelihood into the future.”

3. The granting of permanent residency is in accord with the interests of Japan

This condition is met through the following:

  • In principle, the person has stayed in Japan for more than 10 years consecutively. It is also required that during his/her stay in Japan the person has had work permit or the status of residence for more than 5 years consecutively.
  • The person has been never sentenced to a fine or imprisonment. The person fulfills public duties such as tax payment.
  • The maximum period of stay allowed for the person with his/her current status of residence under Annexed Table 2 of the Immigration Control and Refugee Recognition Act is to be fully utilized.
  • There is no possibility that the person could do harm from the viewpoint of protection of public health.

However, the following exceptions regarding length of required stay in Japan apply.

  • Individuals holding the status of special permanent residency (e.g. foreign nationals with Japanese parent(s)) need to have stayed in Japan for 5 years.
  • Spouses of Japanese nationals who have been married for more than 3 years can apply after they have lived in Japan for one year consecutively.
  • If the person is deemed to have made a significant contribution to Japan in diplomatic, social, economic, cultural or other fields they can apply after a 5 year period of stay in Japan.

Applications typically take 4-12 months to process.

Converting to a Japanese Drivers Licence

Citizens of the following countries who have held a valid driver’s licence in their home country for more than three months are exempt from the written and practical tests.

Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Korea, Luxembourg, Monaco, New Zealand, Norway, Portugal, Slovenia, Spain, Sweden, Switzerland, Taiwan, The Netherlands, U.K.

Citizens from other countries who have held a valid driver’s licence for more than three months are required to complete additional paperwork and take a short written and practical examination.

Drivers from any country who have not held their licence for more than three months cannot convert their licence to a Japanese one and must start from the beginning to obtain a Japanese driver’s licence.

For those in the first group above here is the process for converting your licence.

  1. Obtain an official translation of your domestic licence. This can be done at your embassy or at a branch of the Japan Automobile Federation (JAF) (a list of branches can be found here and the JAF branch in Tokyo is located here in Mita Ward). This costs ¥3,000 (more information can be found here).
  2. Your licence needs to be converted at one of the official driver’s licence centres. You will need to take the following with you:
    • Foreign driver’s licence
    • Translation
    • Copy of your residence record (jumin-hyo)
    • Passport (to prove that you resided in your home country for more than three months after obtaining your licence
    • Passport photographs (can be taken at the center.

I’m tempted to add a good book to that list because the whole process (waiting, paperwork, waiting, eye test, etc.) takes about four hours — and even that’s only if you get there in the morning). Process details also here.

Getting a Motorbike Licence

If you’re thinking of getting a motorbike license in Japan you essentially have two options:

  1. Go directly to one of the designated test centres and take the practical test directly.
  2. Enrol at a driving school or on an intensive driving course.

In short, the former guarantees that you fail the practical test several times before an adjudicator decides that you’ve paid the exam fees a sufficient number of times and begrudgingly gives you a chance of passing; the latter almost guarantees a pass first time but is the most costly option.

Having come to Japan and discovered that my motorcycle licence was invalid (because I had arrived within three months of having passed in the U.K.) I found myself in position of having to take the test again from scratch and opted for the latter route. Given the practical examination fees of ¥6,000-7,000 and knowing that having to go through the rigmarole of failing several times before I was even in with a chance of a pass would lead to considerable frustration, opting for the school route seemed like the best choice.

To be clear, whether you go to a driving school or directly to the driving test center the test is identical: 10-minutes around a 150×150 metre car park that has been laid out with roads, a little slope, some bollards, and fake traffic lights in a failed attempt to simulate real-road driving. The only difference is where you take the test. Going via the school route means that you will take the test at the school and on a bike model with which you have become familiarised; otherwise, you’ll take it at the licence center.

The test requirements are 95% the same for both medium bikes (<400cc) and big bikes (>399cc) and at no point will you actually go out on to the roads or highways. Slightly bemused by this fact I did ask the instructor at which point we practice outside the test centre — a question which was met with an incredulous ‘Of course you can’t do that! You haven’t yet passed your test!’ as if I’d just asked permission to practice wheelies outside the local primary school.

Those that already hold a car licence (so the vast majority) are exempt from certain requirements (e.g. no written test), but all candidates will need to take an aptitude test (tekisei-shiken). The result of this has absolutely no bearing on your eligibility; it is merely to inform you of your personality and traits and point out habits of which you may need to be aware when driving.

You need to hold a medium bike license before you can take the big bike course and so to get a ‘full’ license you’re looking at about¥220,000-250,000 for 25-30 hours of lessons. A medium bike licence will be about ¥120,000-140,000 and 12-17 hours of lessons depending on whether or not you hold a Japanese car driver licence.

Bike-Simulator-School-Japan
For the medium bike candidates, you will spend about 3 hours on a simulator to show you the hazards of driving on the road.

The 10-minute practical examination consists of the following:

Balance beam 15 metres long; 30cm wide. To be crossed over in 7 seconds for medium bikes and 10 seconds for big bikes.
Salom Under 8 second for medium and 7 seconds for big bikes.
Cattle-grid Small ramps unevenly spaced out over 8 metres. To be crossed standing on the bike in over 10 seconds (medium bikes exempt from this requirement).
Hill start  Start from standstill on a slight slope without rolling backwards.
S-curve No time limit.
Crank No time limit. Must not hit the cones on either side.
Emergency stop Stop within 11 metres from 40kmph. Distance is extended if the ground is wet.
Rail crossing This is just a fake rail crossing at which you need to stop and check left and right before continuing.

The rest of the time is spent following a set route around the test ground so that the examiner can see you’re indicating, checking your blind spots, and stopping correctly at the lights and so on. With the exception of the emergency stop, the maximum speed on all parts of the course is 30kmph; however, even this is normally unachievable as at any given time there are upwards of 10 cars moving around at a snail’s pace on the same circuit.

Driving-School-Japan
Circuit layout at a driving school in central Tokyo

Throughout this time the examiner follows behind. The pass mark is 70% — points being docked for missing a signal or crossing the balance beam too quickly etc. Instant fails are given for mistakes such as skidding on the emergency stop, knocking over a bollard, falling off the balance beam, and so forth.

Pass rates for those taking tests at the schools is about 80% for medium-sized bikes, rising to 90% for big bikes. Incidentally, pass rates at the official test centers for exactly the same examination is under 5% with examinees taking the test an average of 12 times. How this system is even allowed to exist is beyond me, but the percentages speak for themselves.

You are not allowed to carry a passenger within one year of passing your medium bike license (three years until you can take a passenger on the highways). Taking a passenger on the capital freeway (shu-to-kou) is forbidden for all riders, regardless of experience.

Pension System

So not the most stimulating topic; but if you’re staying and paying in Japan you should probably know what you’re going to get out of the system when retirement comes. I’ll try and make this as least painful as possible…

The pension system in Japan is a three-tier system.

Pension-System-in-JapanThe below gives an overview of each of the first two tiers: how the system works, required level of contributions, and expected level of pay-outs.

Tier 1: National Pension

This is the basic state pension. Those aged between 20 and 60 years old and residing in Japan are obligated to pay into the national pension scheme. How much is the monthly payment? Obviously, this has changed over time but the monthly payments for the past five years are given below.

  • 2011: ¥15,100
  • 2012: ¥15,020
  • 2013: ¥14,980
  • 2014: ¥15,520
  • 2015: ¥15,590

They’re a bit up and down but on average each year has seen a 0.65% increase. The problem for many foreigners is that you need to have paid your state pension contributions for 25 years before you are eligible to receive the state pension once you retire. Yup, pay in for 24 years and 11 months and you will be entitled to not even 1 yen per year. Admittedly, this minimum required contribution period will change from 25 years to 10 years in April 2017, but that is still a considerable length of time for many foreigners living in Japan planning to go back to their home country at some point.

This fairly harsh requirement is somewhat mitigated a rule by permitting a lump withdrawal for foreigners returning to their home country. To be eligible, you need to:

  • Be a non-Japanese national
  • Have contributed to the pension system at least 6 months but less than 25 years (10 years from April 2017)
  • Make the claim within two years of ending your residence in Japan

The lump sum calculation only takes into account up to three years of contributions so there is still a dead-zone between 3-25 years (3-10 years from April 2017). Currently, the maximum possible pay-out is about ¥280,000 meaning that if you paid in for exactly three years you’d get about half your money back (see here for the details; PDF in both Japanese and English).

Furthermore, Japan has bilateral agreements with certain countries (as of 2014: Germany, US, UK, Belgium, France, Canada, Australia, Netherlands, Czech, Spain, Ireland, Brazil, Switzerland and Hungary; negotiations with other countries underway) which may let you add your qualifying years back home to your period of contribution in Japan, helping tip you over the required contribution period and allowing you to claim the state pension.

Do I absolutely have to pay? Well, legally speaking yes. Although I dare say there are a number of foreigners ignoring the national pension contribution bills from the municipal offices. Students are also exempt from payments for the duration of their studies.

Okay. So how much do I get if I’m eligible? Although the requirement to pay contributions stops at 60, you cannot claim the pension until you turn 65. Currently the maximum annual payment is limited to ¥800,000 (or ¥66,600 per month), which assumes that you’ve contributed to the system for the full 40 years.

The calculations is as follows:

¥800,000 x (total months of contributions) / 480

Or put more simply…

¥20,000 x (total years contributions)

So, for instance, if you’ve contributed for 30 years your annual pension would be ¥20,000 x 30 = ¥600,000.

If you are eligible to receive the state pension you do not have to reside in Japan to do so; payments can be claimed from overseas.

Tier 2: Employee and Mutual Pension

There are two different types of pension here: kosei-nenkin for company employees and kyosai-nenkin for public sector workers. The latter is less likely to be of relevance for foreigners so I’ll explain the former.

Unlike the national pension where contributions and payments are fixed regardless of your level of income, employee and mutual pensions are calculated based on your level of payment into the system. As of 2015 this stands at approximately 17.8% of your income, which is split 50/50 between you and your employer meaning you pay about 8.9%. This total percentage increases by 0.25% every year. Your national pension contribution is included in this premium so if demand letters arrive you should go to your municipal office and explain the amount is already being deducted from your salary.

How much do I get? The calculation for final annual pension payments is more complicated than that for the national pension because your salary changes with job moves and promotions but is roughly:

0.55% x (total lifetime wages)

OR

0.55% x (average annual salary) x (no. of years in employment)

So if you worked for 40 years with an average salary of ¥6 million…

Pension Type Calculation Annual Amount
National ¥20,000 x 40 years ¥0.8MM
Employee 0.55% x 40 years x ¥6MM ¥1.32MM
Total ¥2.12MM

Tier 3: Other Pensions

Many larger employers offer their own pension benefits in the form of Defined Contribution Plans or Defined Benefit Plans and so on. By providing such benefits employers can opt out of the employee pension system so long as they provide benefits that are over 50% better (essentially, your contributions wouldn’t change but your employer’s burden would increase).

Income Tax

Japan’s tax year runs from 1 January to 31 December and income tax is payable at a national, prefectural and municipal level.

Tax status

Taxpayers will fall into one of three possible categories:

Status Description
Non-permanent resident Anyone of non-Japanese nationality that has lived in Japan for 5 years or less within the last 10 years
Permanent resident For foreigners, anyone that has lived in Japan for more than 5 years in the last 10 years.
Non-resident Anyone who does not fit in either of the categories above.

Your status determines the extent to which income from abroad is taxable in Japan. Your total taxes paid (both in your home country and Japan) will be determined by tax treaties between the companies. 

Scope-of-income-subject-to-taxation
Scope of income subject to taxation

Let’s look at taxes at the domestic level.

Income Tax (National)

Like the UK and the US, Japan operates a progressive tax system where your tax rate increases with your income. At present the following tax brackets apply.

Taxable Income (million ¥) Tax Rate Deduction (¥)
< 1.95 5% Zero
1.95 – 3.3 10% 97,500
3.3 – 6.95 20% 427,500
6.95 – 9 23% 636,000
9 – 18 33% 1,536,000
> 18 40% 2,760,000

So, for example, a single taxpayer with a taxable income of ¥8 million would fall in the 23% tax bracket and pay ¥1.204 million in taxes.

¥8M x 23% = ¥1.84M – ¥0.636M = ¥1.204M

It is a bracket system and the amounts in the deduction column are simply the taxes that result from the brackets above. We can calculate the tax payable on a taxable income of ¥8 million another way…

Bracket Amount Tax Remaining
5% ¥1,950,000 ¥97,500 ¥6,050,000
10% ¥1,350,000 ¥135,000 ¥4,700,000
20% ¥3,650,000 ¥730,000 ¥1,050,000
23% ¥1,050,000 ¥241,500 ¥0

And the sum of the figures in the tax column equals ¥1.204 million.

What is “taxable income” and what deductions are allowed?

Well, you get a living expense deduction based on your income.

Total income (million ¥) Allowed Deduction (¥)
< 1.8 Total income x 40% or 650,000
1.8 – 3.6 Total income x 30% + 180,000
3.6 – 6.6 Total income x 20% + 540,000
6.6 – 10 Total income x 10% + 1,200,000
10 – 15 Total income x 5% + 1,700,000
> 15 2,450,000

Further, all taxpayers, regardless of their level of income are entitled to a ¥380,000 basic deduction. So if your income is ¥8 million, your taxable income is actually ¥5.62 million.

¥8MM – (¥8MM x 10% + ¥1.2MM) – ¥0.38MM = ¥5.62MM

Certain other expenses such as health insurance and travel expenses are also tax deductible (most Japanese companies pay for their employees’ commuter pass) and the system gets more complicated if you’re self-employed, but the above are the main deductions for individuals.

What if I have dependents?

If your spouse does not work then you can also claim your spouse’s basic deduction of ¥380,000 against you own salary. If your spouse does work then it depends on their level of earnings.

There has been quite a bit of fuss in recent times around what is referred to as the ¥1.03 million barrier. ¥1.03 million is the total of the ¥650,000 deduction and the ¥380,000 basic deduction — it is the maximum amount that can be earned without paying any taxes.So what’s all the fuss about? Well, if either spouse earns less than this amount they are still deemed a dependent of the other for tax purposes, and as a dependent the basic deduction amount can transfer to the main earner. All well and good. The issue is that if the spouse earns less than ¥1.03 million they are entitled to claim the¥380,000 against their own salary and can still amount to their spouse to be claimed as a basic deduction. This means that main earner claims ¥760,000 and their spouse claims ¥380,000 , meaning that as a couple they end up with basic deductions of ¥1.14 million. Furthermore, there are also instances where health insurance benefits for spouses stop once they are no longer classified as a dependent making it even more disadvantageous to have both husband and wife working.

The current system was introduced in 1961 as a way to support the average family at a time when women were expected to stay at home whilst the husband laboured in the office. However, as times have changed the voices that claim this system is out-dated have been getting louder…

And what about children?

Following a change in the law in 2011 those which children under the age of 16 years old can no longer claim any tax deduction. For children over 16 years old the amount is ¥380,000 per child; 16-22 years old and that rises to ¥630,000 before coming back down to ¥380,000 if they are still a dependent after 23 years of age.

Residence Tax (Prefectural & Municipal)

Prefectural and municipal taxes are collectively referred to as Residence Tax (住民税). In total this amounts to 10% (6% prefectural; 4% municipal) of your prior year’s taxable income.

Moving to Japan

Moving to Japan can be a frustrating process. Something as simple as getting a phone contract can turn into a saga. The red tape and registration process for foreigners can appear non-sensical at times, as you find yourself trapped in some Catch-22 situation of having nowhere to live but needing a place of residence to sign a lease contract. Knowing a little about the system before you arrive can save you days of pain and hours of pointless travelling.

Registration with the authorities

For those that intend to stay in Japan for more than 3 months (on either a work or student visa, for example) you will need to carry a “resident card” (zairyū kādo) with you during your stay in the country. Like a driving licence, this is just a credit card-sized ID that shows your name, date of birth, etc. with blank rows at the back for when you register your address. Assuming you enter the country through one of the main airports this will be issued to you at immigration; otherwise, you will need to visit the municipal office (kuyaku-sho) in your local area within 14 days of landing and a temporary seal will be put in your passport.

Resident-Card-FrontResident-Card-Back

Once you have your resident card, you are required to visit the municipal offices in your local area “within 14 days of finding a place to settle down”. For those that do not have accommodation lined up in advance (student dormitories, company apartments or the like) this can seem a little counter-intuitive since no landlord is going to lease you an apartment unless you have a registered address.

The thing to note is that there are no checks to confirm that you actually live at the address you want to register when you go to the municipal offices. You walk in, state the address at which you live, hand over your resident card, and 30 minutes later this address will be written on the top of your resident card with a red stamp of authority.

You can register any type of residence: hotel, hostel, friend’s place, etc. It is absolutely critical that you do this as soon as possible, as the little red stamp on the back of the resident’s card is your key to everything from getting a phone contract to signing an apartment lease.

Full details of the registration system can be found here.

Bank account

You will typically be told upon walking into a branch and attempting to open a bank account that you need to have been in the country for 6 months to be eligible. This is the standard line but once you can prove that you require a bank account to live here (e.g. a work contract with a salary date, school registration certificate, etc.) they they should waive this condition. Even at the main branches of the mega-banks it might be difficult conveying such things in English so bringing along a Japanese-speaking friend is advisable. You will need a bank card (not just a bank account number) to sign an apartment lease and get a mobile phone so, again, it’s critical that you try and open a bank account as soon as you’ve registered at the municipal offices in your local area.

Inkan
You can make up your name in Japanese characters — anything is acceptable

To open up a bank account you will need (1) your passport, (2) your residence card with an authorized address on the back, and (3) possibly an inkan (or hanko) — a seal that, at the bottom, has kanji (Chinese characters) carved in to the wood or plastic and is used as a form of signature for official documentation in Japan. Inkans can be bought for as little as 2,000 yen; however, the bank will probably accept a standard signature instead in the case of foreigners (arguably preferable because it means one less thing that you might forget at a future visit to a bank branch).

Debit cards typically take 2-3 weeks to be issued but if that’s too long you can request just a simple cash card (i.e. one that you can only use to withdraw money at ATMs and not pay for goods in a shop). Cash cards usually arrive within 7-10 days. Likelihood is that your initial place of registration will not have your name on the front door so if you’re staying with a friend, for instance, it’s important that you register you tell the bank to add your friend’s name in “C/O” to the envelope when the card is eventually dispatched; otherwise you risk a failed delivery, the card being returned and destroyed, and finding yourself back at square one. The card will only be dispatched to your official residence (i.e. the address on the back of your resident card) and so ideally it should be a place at which you’ll be staying for more than just a night or two (this is why registering at a friend’s address is preferable to a hotel or hostel).

Mobile phone

Armed with your resident card and bank card you are now qualified to get a mobile phone. To rent an apartment you will need a contact phone number so this should be your next priority. Aside from mobile phone rental services at airports, there is no pay-as-you-go system in Japan and so you will need to sign a formal contract (typically 2-years). Fortunately, this can be done within an hour.

It’s worth mentioning that free WiFi in Japan is surprisingly difficult to find. Cafes that have signs tempting you with free WiFi typically offer it in co-operation with a network provider, meaning that if you don’t have a mobile phone with that provider you will be unable to connect. Regardless of provider, the 4G or LTE network in Japan is fast and available even in the underground.

Once you have your authorized resident card, bank card, and mobile phone you can sign an apartment lease contract.

Renting an Apartment

The system around getting an apartment in Japan is quite different from in Europe and the US. In some respects, the system favours the tenant as only they can break the contract at any point; however, this comes with a number of extra costs that can make moving (especially for new-comers to Japan) a very expensive process.

Estate agents

Estate agents are a dime-a-dozen in the major cities. There is very little need to search ahead for the address of an estate agent in your preferred area: just come out of the station and start walking and you’re almost guaranteed to find one within 100 metres. Which one doesn’t really matter. The vast majority are independent operations that all utilize the same database to search for properties. All will make you register your details and some will then give you a temporary username and password to let you search the database yourself. They won’t charge you anything for this service but if they are successful in finding you a property you will need to pay about one month’s rent as an introductory or brokerage fee.

Viewings where the tenant is still living in the premises is not allowed so whilst a property may be advertised in advance you will have to wait until its been vacated (and maybe cleaned, as well) before you can arrange a viewing. It is not uncommon to sign a lease contract without having seen the inside of the property, especially in the more popular areas. At first this may sound a little strange but age, location, rent per square metres relative to other properties in the area give a good indication of what you can expect and once you’ve seen several you can start to make a good guess from the layout and information what’s in store for you.

In cases where the tenant has vacated and the property is empty viewings can usually be arranged there and then (typically a code is used to enter the main building and keys for the room can usually stored in a padlocked box outside of the premises or at a local store). There’s about a 50/50 chance you’ll be able to view any given property on the same day when you walk into the estate agents so if you’ve done your research beforehand it’s best to go armed with a hand-full of potential places you’ve seen and liked. The properties on popular sites such as chintai.net and homes.co.jp substantially overlap with the estate agents’ own databases

Up-front costs

  • Base rent: Quoted on a monthly basis. Good chance you’ll need to pay one month’s rent in advance before moving in.
  • Maintenance fees: Typically around 10% of the monthly rent. These are borne by the tenant and so should just be added to the base rent if you’re thinking of a budget.
  • Reikin (“key money”): This is essentially money, in addition to a deposit, that you will not get back. It can vary between nothing and 1-2 month’s rent, although one month’s rent is the typical amount (calculated off the base rent).
  • Deposit: Typically one month’s rent but sometimes nothing. As a foreigner, the landlord is likely to ask for this even if the advertisement said no deposit is required.
  • Guarantee: This is essentially insurance for the landlord in case you stop paying. Again, borne by the tenant. If required, it is usually 0.5-1 month’s rent. Again, as a foreigner you’re likely going to have to pay this.
  • Brokerage fee: Mentioned above. Around one month’s rent.

In short, best case you’re looking at 1-2 month’s rent in advance; worst case perhaps 3-4 months’. Of which not much will come back to you at the end of your contract (cleaning fees and costs to change the locks will normally come out of your deposit).

Contract

Almost without exception, contracts are for two years. However, this doesn’t mean that you, as the tenant, are tied in for this period. You may leave at any time with the notable point that you’re going to have to cough up 2-4 months’ rent again at the outset of any new contract. The landlord, however, is restrained by the contract for the two-year period giving you the assurance that you’re not going to be kicked out with a month’s notice. At the end of this two-year period the contract will be terminated or the tenant can pay a renewal fee usually equal to the greater of one month’s rent or the original key money fee and the whole process begins again.

The documentation involved is generally horrific. You’ll need to sign at least 20 pages of a 300 page binder outlining in the minutest detail what you can and cannot do in the apartment, as well as the expected costs involved should you infringe on one of the innumerable clauses. Constitutional changes probably require less paperwork.

The real cost for first-time renters

If only the cost of moving ended there for new-comers to Japan. Unfortunately, the above omits to mention that when you first turn the key to your new apartment you will be greeted by nothing: no fridge, no microwave, no washing machine, no bed, no curtains, no furniture, and (in some cases) no air conditioning unit or light! You can do the maths, but it’s by no means unthinkable for the cost to reach 1,000,000 (or 100 man yen) all told.