Need People in Japan But Don’t Need a Local Entity?
Foreign companies need people on the ground in Japan but don’t want to make the significant time and financial commitment involved in setting up a local entity. JPS can hire employees on your behalf in Japan via our Japan PEO Service.
Onboarding
Employees (foreign and Japanese) become employees of JPS.
Work Visa
Our immigration team arranges work visas for foreign employees.
Payroll & HR
JPS provides full payroll support for employees working in Japan.
Individual Tax
We start with advice about basic tax efficient compensation structuring.
Tax Risk Management
JPS’s Japan PEO Solutions help clients to minimize global tax risks.
Growing Together
If in future you need a Japan subsidiary, JPS makes this a seamless transition.
How It Works
JPS’s Japan Professional Employer Service (‘PEO”) service is aimed at assisting foreign companies in Japan to operate in the most efficient way possible.
JPS hires the employees that you need for your business in Japan and fully supports them. We arrange Japan work visas for foreign employees and handle the Japan payroll (including compliance with Japanese social insurance, labor insurance, and other benefits.)
The following diagram shows how our basic Japan PEO service operates.
1. Business Support Agreement | + |
A Business Support Agreement is put in place between your company (outside Japan) and JPS. This agreement is carefully drafted to ensure that your company receives the dedicated support that it requires in Japan while minimizing tax risk – including Japan permanent establishment (“PE”) risk.
2. Employee Onboarding | + |
JPS takes on the responsibility of Japan work visas, Japan payroll, and associated HR functions for your designated employees. Japanese nationals and foreigners with existing Japan work visas can be immediately brought on board by JPS in Tokyo. JPS transfers visas from previous employers (if necessary) and moves these employees on to the JPS Japan payroll. We pay particular attention to Japanese social security (especially statutory health insurance) since uninterrupted coverage is the number one concern for Japanese employees. For foreigners who do not hold a valid Japan work visa, JPS starts the Japan work visa application process – new approvals typically take six to eight weeks.
3. Sales to Japanese Customers | + |
Sales are made directly between your company outside Japan and the Japanese customer.
The Japan based employees can now work to support your business in Japan. The activities are monitored to ensure they do not pose a tax risk to the foreign parent company. Sales occur direct between the foreign parent and the Japanese customer. This allows sales to be recognized in your foreign company rather than in Japan.
Enjoy The Benefits of JPS’ Japan PEO Service
Considering Tax Risk
A major problem with many global PEO services is that they do not consider international tax risk inherent in PEO. International tax is becoming a significant focus of many tax authorities including the Japanese tax authorities. In particular, there is the issue of Permanent Establishment (“PE”). In simple terms, if the activities undertaken by a PEO service are not carefully managed and properly documented, the PEO could be deemed a PE of the foreign parent company. This in turn could lead to the foreign parent company being subject to Japanese tax based on sales to its Japanese customer even if it has no subsidiary in Japan. PE investigations by foreign tax authorities are expensive and can lead to a large Japan tax liability plus interest and penalties. In addition, the foreign parent company may need to re-state its accounts and prior year tax returns.
Features of our Japan PEO Solution
Serving Clients Since
1993
Professional
Ex-Big 4 Management
Cost Effective Solutions
Save on establishment cost and ongoing compliance.
Full Life Cycle Support
Assistance if you transition to a fully owned subsidiary.