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Freelancer in Japan cover photo

Freelancer in Japan

Freelancer in Japan

Japan, a nation balancing ancient traditions with cutting-edge technology, serves as both a canvas for cherry blossoms and a vibrant hub for expats pursuing versatile career paths. Whether you’re immersed in the Japanese way of life or contemplating a move, we offer valuable insights into being a freelancer in Japan.

Why should I freelance in Japan?

  • Diverse Opportunities for Foreign Nationals: Embark on a journey of diverse opportunities spanning IT, creative content creation, consulting, and language services. Freelancing is a gateway to explore and contribute to various industries in Japan.
  • Work Flexibility and Autonomy: Have the freedom to set your own work hours and choose where you work, whether from the comfort of home in Tokyo or your favorite cat cafe. Enjoy autonomy in managing your workload and selecting clients that align with your professional goals.
  • Multiple Sources of Income: Diversify your income streams by engaging with multiple clients simultaneously. Unlike traditional full-time employment in Japan, freelancing allows you to secure income from various projects simultaneously, ensuring financial stability.
  • Potential for Growth and Career Development: The Japanese Freelance economy grew by 62.7% (9.2 trillion Japanese Yen) between 2015 and 2021. Freelancing in Japan opens doors to continuous skill development through exposure to diverse projects and challenges. Navigate your career path, seizing opportunities for substantial growth and development.

Can I move to Japan as a Freelancer?

First things first, there’s no specific visa for freelancers in Japan. You’ll need a working visa, and that means getting familiar with something called a Certificate of Eligibility (CoE). Now, you can’t just make or apply for a CoE yourself; it’s a process you do with a potential Japanese employer who’ll have your back with the paperwork.

It’s also quite common for employment contracts to include clauses regarding secondary employment or moonlighting. Essentially, these clauses impose restrictions on employees taking up additional work without obtaining prior approval. The aim is to ensure that employees avoid conflicts of interest, maintain a dedicated focus on their primary job responsibilities, and safeguard proprietary information.

Here in Japan, talent retention is a priority, companies use these clauses to prevent high turnover of employees, which could negatively impact their reputation. Additionally, it’s worth noting that hiring a professional to navigate the visa process paperwork for a company can be expensive, typically ranging from 40,000 to 150,000 yen. So, as you carefully review your contracts and consider potential outside commitments, keep in mind the financial considerations and communicate openly with your company, fostering transparency and adherence to company policies.

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Steps to Becoming a Freelancer In Japan

The first step involves landing a regular job with a company that’ll sponsor your entry. Once you’re in, and the yen is rolling in (at least 200,000 yen per month is what tends to work, but this is not publicly written, so more is better), you can consider freelancing and renewing that visa of yours.

1. Visa Compatibility

Before diving into freelancing, take a good look at your visa. Japanese immigration is clear – your freelance work should align with your visa category. For instance, if you’re an IT engineer with an Engineer visa, developing IT projects as a freelancer falls right into place. Beware of category mismatch – no teaching English with an Engineer visa.

If your freelancing dreams span beyond your visa boundaries, You will need to apply for a special permission called The “Application for Permission to Engage in Activity other than that Permitted under the Status of Residence Previously Granted” or “資格外活動の許可”  “Shikakugai katsudō no kyoka” form is your ticket. Navigating immigration complexities can be tricky; consider reaching out to immigration lawyers for expert guidance. 

2. Market Research

Freelancing isn’t just about skills; it’s a market game. Think of it as building your own business. Start by researching the market, identifying your niche, and understanding your potential clients. Building a robust online portfolio is important. Leverage the internet, attend professional events, and tap into your existing network. Remember, personal connections and recommendations hold immense value in Japan’s professional landscape. To find out more about connections in Japan, you can visit our article: Guide to Business Networking In Japan.

While having clients beyond Japan’s borders is possible, a strategic move is to anchor more toward Japanese-based clients. If you’re dealing with multiple clients, ensure your primary one is Japan-based – a smart move for immigration and visa stability.

3. Paperwork transitioning from full-time work to a Freelancer in Japan

If you’re transitioning from a full-time role to full-time freelancing, be ready for a paperwork shuffle. Post-resignation, you’ll need to enroll in Japanese national health insurance and handle the payments yourself.
This involves a visit to your local city hall. Bring along your residence card (在留カード)“Zairyū kādo” and details from your previous employer. To establish yourself as a one-person business, submit the (個人事業) “kojin jigyo” form to the local tax office. For more information check our Corporate Bank Account In Japan article.

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Requirements for invoices in Japan

In Japan, including specific elements in your invoices is not only recommended but also legally required for proper documentation and adherence to taxation regulations. 

  1. A comprehensive invoice should prominently feature your business name and address, enabling clear identification. 
  1. The inclusion of your VAT/JCT number is crucial, as it verifies your tax registration status. 
  1. The invoice date and a unique, sequential invoice number are essential for record-keeping and traceability. 
  1. To ensure accuracy and compliance, you must provide the customer’s name and address, along with their JCT/VAT number if applicable. 
  1. Clearly stating the gross sale amount, including the Japan Consumption Tax (JCT), is necessary for transparency, and specifying the currency used ensures clarity in international transactions. 

Furthermore, breaking down the tax amount and indicating the tax rate applied to each item is a legal requirement, aligning with the meticulous financial standards upheld in Japan. 
Adhering to these requirements not only facilitates smooth business operations but also demonstrates a commitment to regulatory compliance in the Japanese business environment. For more information on invoices in Japan, be sure to consult our article on the New Invoice System.

Top 8 Freelancing Sites in Japan

  1. CrowdWorks: A leading freelance marketplace in Japan, connecting businesses with freelancers across various fields.
  1. Lancers: This platform offers a wide range of freelance opportunities, including programming, design, writing, and marketing.
  1. Freelance Start: A platform for freelancers and businesses to connect, covering areas such as IT, design, writing, and marketing.
  1. Coconala: This platform caters to a diverse range of freelancers, allowing them to offer services and skills to potential clients.
  1. WorkShift: Specializing in connecting businesses with freelancers for tasks that can be done remotely, including translation, writing, and programming.
  1. Tech Stock: Focused on IT and programmers, offers a wide range of available freelance opportunities and collaborations. 
  1. Yolo Japan: While not exclusively a freelancing platform, Yolo Japan offers part-time job opportunities, including freelance gigs, for foreigners in Japan.
  1. Upwork: Probably the most popular freelance website on the internet. There are a wide variety of categories – from engineering to design and even legal services. 

Are Sole Proprietors the same as Freelancers?

Questioning, is a Freelancer same as Proprietors?

In Japan, sole proprietors run multifaceted businesses, engaging in diverse activities. On the other hand, freelancers concentrate on project-specific services. Although freelancers can function as sole proprietors, the difference lies in the work’s nature. Sole proprietors report business profits on personal tax returns, intertwining personal assets with their business.

When considering tax matters for freelancers in Japan, it’s important to take note of specifics like “Nenmatsu Chosei” (年末調整) and “Kakutei Shinkoku” (確定申告). While sole proprietors, engaged in diverse business activities, often undergo “Nenmatsu Chosei” year-end adjustments, freelancers, who focus on project-specific services, might find themselves dealing with the “Kakutei Shinkoku“—filing a final tax return independently. The distinction aligns with their nature of work. Sole proprietors intertwine personal and business finances, evident in their year-end adjustments. In contrast, freelancers, managing project-based income, address conclusive tax filings as they navigate the dynamic realm of Japanese freelancing.

How much tax should I pay?

In Japan, the tax process for freelancers varies depending on whether the work is done for a registered corporation or individual clients. 

doing taxes in Japan

When working with registered corporations, a 10% tax deduction is automatically applied to your income, and at the end of the year, you should receive a tax withholding slip summarizing all the work you’ve undertaken. This slip becomes a crucial document for filing your taxes. On the other hand, when dealing with individual clients, it is less common to receive a tax withholding slip. In this case, meticulous record-keeping of the exact amounts deposited into your bank account becomes essential for tax purposes. 

Additionally, ensuring that you can clearly specify the nature of the services rendered is crucial for accurate reporting and compliance with tax regulations. By understanding these distinctions, freelancers in Japan can navigate the tax obligations associated with corporate and individual clients effectively.

  • For freelancers in Japan, comprehending the income tax rates is paramount for effective financial planning. The income tax rates vary based on the amount of income earned, creating a progressive taxation system. Here’s a detailed breakdown of the income tax rates for freelancers in Japan:

Tax RateWhat incomes apply?
5%Taxable income under ¥1,949,000
10%Taxable income ranging from ¥1,950,000 to ¥3,299,000
20%Taxable income in the range of ¥3,300,000 to ¥6,949,000
23%Freelancers earning between ¥6,950,000 and ¥8,999,000
33%Taxable income from ¥9,000,000 to ¥17,999,000
40%For taxable income falling within ¥18,000,000 to ¥39,999,000
45%Taxable income exceeding ¥40,000,000

It’s crucial for freelancers to accurately assess their taxable income and determine the applicable tax rate using the provided brackets. The progressive nature of Japan’s income tax system underscores the importance of strategic financial planning to optimize deductions and allowances, ultimately minimizing the tax burden. Utilizing resources like the Individual income tax rates chart provided by JETRO can aid freelancers in navigating the nuances of income taxation in Japan. For more information on Japanese Taxes, make sure to watch our seminar linked below:

Can I apply for special tax benefits or deductions in Japan

To initiate the application for approval of the Blue Tax Return in Japan, commonly known as the “青色申告承認申請書” (Aoiro Shinkoku Shōnin Shinseisho), certain steps need to be followed. 

  1. Begin by obtaining the necessary application form, which is typically available on the official website of the tax authorities or at local tax offices.
  1. Complete the form accurately, providing essential details such as personal information, income sources, and other relevant financial information. Ensure that all required supporting documents, such as income statements and receipts, are attached. 
  1. Once the application is prepared, it must be submitted to the local tax office within the designated time frame. 
  1. The tax authorities will then review the application, and upon approval, the freelancer will be granted the Blue Tax Return status, allowing for specific tax benefits and deductions. 

It is crucial to adhere to the prescribed guidelines and deadlines to facilitate a smooth approval process and enjoy the advantages of the Blue Tax Return system in Japan.

Concluding Thoughts

Aspiring freelancers eyeing Japan, your journey holds both challenges and opportunities. From navigating visa complexities to thriving in the gig economy, the path is uniquely yours. Whether Tokyo’s bustling energy or Kyoto’s tranquility, embrace the nuances, stay informed, and make your mark in Japan’s freelancing landscape. The freelancing realm in Japan is a blend of tradition and innovation, awaiting your contribution. So, step into this professional adventure with confidence, understanding that your skills can find a meaningful place in the evolving narrative of Japanese freelancing.

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