How to move to Japan on an intra-company transfer: full guide on visa requirements and tax, payroll and social security considerations

Are you planning to move to Japan on an intra-company transfer? Japan is a global business hub, and the intra-company transferee visa is a popular route for professionals relocating within multinational organizations.

This comprehensive guide explains how to move to Japan on an intra-company transfer, covering eligibility, visa steps, and—crucially—what you need to know about tax, payroll, and social security in Japan.

What Is an Intra-Company Transfer to Japan?

An intra-company transfer allows employees of multinational companies to relocate to a Japanese branch, parent, or affiliate either:

• on assignment – that is, an employee remains enrolled in their home country’s payroll even though taxes are due in Japan too on Japanese sourced income); OR
• on a permanent basis – that is, an employee is removed from their home country’s payroll and placed on a Japanese payroll which becomes their only payroll going forward).

The process is streamlined through the Intra-Company Transferee Visa, designed for managerial, specialist, or technical roles.

However, the tax, payroll and social security position changes depending on whether the individual is sent on an assignment (with the tax position changing further depending on whether the assignment is for under or over 6 months) or if the transfer is permanent.

Sponsorship License and Immigration Criteria in Japan

Unlike some countries such as the UK or the Netherlands, Japan does not require a formal sponsorship license for companies to employ foreign nationals.

However, the sponsoring company must meet criteria set by the Immigration Office of Japan.

These criteria are reviewed as part of the work permit application process.

In general, the company must be incorporated in Japan (such as a local subsidiary of a global company) and provide documentation proving its legitimacy, financial stability, and the genuine need for a foreign employee.

Process Overview – Japan Immigration for Intra-Company Transfers

Below is the process for international hires or transfer of a foreign national residing OUTSIDE of Japan (the process is different if an individual requiring a work permit is already hired locally by a Japanese company). 

Please note: if dependants (i.e. children, spouse) are also relocating to Japan, their process typically runs in parallel to the one of the main applicant unless they move to Japan at a later date in which case their process runs separately.

Step 1: Check Your Eligibility (1-2 weeks)

This initial step is required for new sponsoring companies to verify they meet Japanese immigration criteria.

Company: Must be incorporated in Japan.

Applicant Qualifications:

• Educational background and/or relevant work experience.

• For most visa types, a bachelor’s degree in a relevant field is preferred. Without a degree, significant work experience (often 10+ years) in the field is required.

Documentation:

• Company registry certificate, financial statements, proof of employment, job description, and assignment letter

• Employment: The individual must be a full-time employee of a company with offices in both your home country and Japan.

• Work Experience: At least one year of continuous employment is generally required.

• Job Role: Managerial, specialist, or technical positions qualify.

Step 2: Gather Required Documents (2-4 weeks)

• Valid passport

• Recent passport-sized photos

• Certificate of Eligibility (COE) from Japanese employer

• Visa application form

• Assignment letter and proof of employment

• Company registration documents

• Detailed job description and resume / CV

Step 3: Obtain the Certificate of Eligibility (COE) (1-3 months)

The Japanese employer will apply for the COE on behalf of the employee with Japan’s Immigration Bureau. Once approved, the original COE will be sent to the employee for visa application (from 17 March 2023 applicants can send either the original COE received or a copy of it).

Step 4: Apply for the Intra-Company Transferee Visa (5-10 working days)

In this step, employees need to submit their COE, passport, visa application, and supporting documents to their local Japanese embassy or consulate. 

Step 5: Prepare the move to Japan (ongoing)

• Book flight in alignment with assignment / permanent relocation start date.

• Arrange accommodation—employers may wish to assist with this step.

• Enroll in health insurance upon arrival.

• Learn basic Japanese for daily life and work.

Step 6: Arrival and Registration in Japan (on the spot / 1 day)

• Landing examination / receive Residence Card at the airport.

• Register living address at local city or ward office within 14 days.

• Open a bank account using Residence Card.

• Set up utilities for new home.

Key Immigration Red Flags and Tips

• COE Validity: The Certificate of Eligibility is valid for only three months from the date of issue. Both the entry visa application and entry to Japan must be completed within this period. If not, the employee must reapply for a new COE and pay the full fee again.

• Dependent Applications: Each family member needs a separate COE and must plan travel within the validity window.

• Entry Visa Application: Must be made in the country of residence or home country. If employee lacks a long-term resident permit in country of residence, apply in country of citizenship.

Tax, Payroll, and Social Security Considerations

As with any other international move, there are tax, payroll and social security consideration when moving to Japan too.

The below 3 points and summary table can assist with determining an individual tax status and their related obligations in Japan based on the residency position and intentions.

1. What is your intention regarding your stay in Japan?

A. I intend to live in Japan permanently.

• → You are classified as a Permanent Resident from your original entry date, regardless of how long you have lived in Japan.

• Tax Implications:

  • Taxed on worldwide income.

  • Eligible for a foreign tax credit (in Japan) to avoid double taxation.

B. I am in Japan for work and have lived here for at least one year from my original entry date.

• → You are considered a Non-Permanent Resident from your original entry date (not a Non-Resident).

• Tax Implications:

  • Taxed on income sourced in Japan and on foreign income paid into/remitted to Japan.

  • May not be eligible for all foreign tax credits in Japan.

C. I do not intend to stay in Japan permanently and have lived here for less than one year.

• → You are a Non-Resident.

• Tax Implications:

  • Taxed only on income sourced in Japan with no tax credits available in Japan though home country will likely allow foreign tax credits for taxes paid in Japan on the same income already taxed in residency / home country.

2. Are you a resident as of January 1st of the current year?

• Yes

• → You are subject to inhabitant tax, which is imposed on your previous year’s income.

• No

• → You are not subject to inhabitant tax for the current year.

3. Are you a Permanent Resident?

• Yes

  • → You can claim a foreign tax credit (in Japan) to avoid double taxation.

• No

  • → Foreign tax credits (in Japan) may not be available, depending on your status and income sources.

Summary Table: Tax Residency vs Taxable Income

Key Notes

• Permanent residency is determined by your intention to live in Japan permanently, not just by length of stay.

• Non-permanent residency applies if you have lived in Japan for at least one year but do not intend to stay permanently.

• Inhabitant tax: if your remuneration is paid outside of Japan, you will receive a notice from the local tax office regarding your local inhabitants tax for the current year. You have the option to pay the entire amount in one lump sum by June 30th of the following tax year, or divide the payment into four equal installments, due on June 30th, August 31st, October 31st of that year, and January 31st of the next year. You can also opt for automatic bank transfer to settle these payments.

  For those whose compensation is subject to tax withholdings via a Japanese payroll, local inhabitants tax will be automatically deducted from their monthly pay, beginning in June of the year after the income was earned and continuing through May of the subsequent year.

  Important: Local inhabitants tax applies only to individuals who are residents of Japan as of January 1st of the tax year. If you leave Japan permanently before the end of the calendar year, you will not be liable for local inhabitants tax on that year’s income.

• Foreign tax credits (in Japan) are available only to permanent residents to prevent double taxation on worldwide income. However, an individual may still be able to claim foreign tax credits in their country of residency even though they are not a permament resident in Japan.

Payroll requirements when moving to Japan on an intra-company transfer

If on a permanent transfer and payrolled / employed locally only:

• Payroll Tax Withholding: Employers typically withhold income tax from your salary and remit it to Japanese tax authorities.

• Filing Requirements: Annual tax returns may be required, especially if you have additional income sources (i.e. dividends, interest, royalties, rental income) or are not subject to year-end adjustment by your employer.

If on a temporary transfer / secondment and still employed / payrolled in home country :

• Payroll Tax Withholding: If all of your compensation is paid outside of Japan, there is no requirement to run a Japanese shadow payroll. However, you must file your tax return for the arrival year by March 15th of the following year—please note that filing extensions are not permitted.

  If you have arranged for automatic bank transfer (ABT) for your tax payments, the amount due will be automatically withdrawn from your Japanese bank account around April 20th, which is about one month after the tax filing deadline.

  From the year after your arrival, most expatriates are required to make provisional tax payments on July 31st and November 30th. These payments are advance installments toward your current year’s national tax liability, with each installment typically amounting to one-third of your previous year’s tax bill. If you have ABT set up for your national tax payments, these provisional amounts will also be debited automatically. You will receive an official notice from the tax authorities specifying the exact amounts due.

• Filing Requirements: As no Japanese payroll is being run, the Japanese tax liabilities must be settled via annual tax return filings. Typically, additional income sources outside of employment also get reported and taxed via the Japanese tax return. For instances, dividends, interest, and royalties paid to non-residents are subject to withholding tax at Japanese rates, though treaty rates may apply which would cap the standard Japanese rates at lower rates.

Tax Treaties: thanks to Japan’s large network of double tax treaties (DTT), under either scenario, it is likely an individual moving to Japan from the US, UK, OECD or other developed economies will be able to obtain relief from double taxation by way of foreign tax credits.

Social Security requirements in Japan

• Local Enrollment: Intra-company permanent transferees must enroll in Japan’s social insurance system, which includes health insurance, pension, unemployment, and workers’ compensation.

• Contributions: Both employee and employer contribute to social security. The rates vary depending on the type of insurance and salary level.

• Totalization Agreements: for those on assignment remaining in their home country’s social security system, Japan has social security agreements with several countries, which allows seconded employees to avoid double contributions. A Certificate of Coverage application will need to be obtained by the sending country’s social security authorities.

Summary of Fringe Benefits Taxation for Expats in Japan

Housing

• If the employer leases the property and pays the landlord directly, only about 10% of the rent is considered taxable income for the employee.

• If 50% of the above 10% (i.e. 5%) is repaid by the employee to the employer, no taxable benefits arise.

• Utilities paid by the employer are fully taxable as income.

• Tax on housing benefits is generally assessed monthly through payroll and must be reported accordingly (unless a payroll in Japan is not being run because remuneration is fully paid from outside of Japan).

Commuting Allowance

• Allowances covering the actual cost of public transportation are non-taxable up to a monthly maximum (e.g., ¥150,000 for public transportation or ¥31,600 for private one).

• If the allowance exceeds the actual cost or the statutory cap, the excess is taxable.

• Tax is usually withheld monthly via payroll (unless a payroll in Japan is not being run because remuneration is fully paid from outside of Japan).

Club Memberships and Dues

• Refundable entrance fees (such as to a club) are non-taxable.

• Ongoing dues may be non-taxable if the membership is used for business purposes; otherwise, they may be taxable as a benefit.

• Reimbursement for a portion of dues (e.g., 50%) may be taxable if not strictly for business use.

Language Lessons

• Fees for language lessons are generally non-taxable if the training is for business purposes.

• If lessons are for personal enrichment, they may be considered taxable income.

Settling-In Allowance

• A one-time settling-in allowance is typically taxable unless it is deemed reasonable and directly related to the move.

• The definition of “reasonable” may vary, but modest amounts are often accepted as non-taxable.

Long-Term Storage

• Employer-paid storage costs are taxable and must be reported as income.

• The effective marginal tax rate for high earners can be around 33–34%.

Repatriation Expenses

• Reimbursement for moving personal effects and household goods at the end of assignment (repatriation) is not taxable.

Home Leave Trips

• One home leave trip per year, after the first year in Japan, is generally non-taxable if provided by the employer.

House Hunting Trip

• Costs covered by the employer for a pre-assignment house hunting trip are not taxable.

Relocation Airfares and Shipping

• Airfare and shipping costs for the employee and family to relocate to Japan, as well as shipping up to a reasonable limit (e.g., USD 10,000), are not taxable.

Key Points:

• Most fringe benefits are treated as taxable income unless specifically exempted by Japanese tax law.

• Proper structuring of benefits (e.g., company-leased housing with partial reimbursement) can significantly reduce taxable amounts.

• Taxation is generally assessed monthly via payroll (unless a payroll in Japan is not being run because remuneration is fully paid from outside of Japan), but some items may be reported at year-end.

• Documentation and clear business purpose are essential for favorable tax treatment.

Tips for a Smooth Intra-Company Transfer

• Stay organized: Keep digital and paper copies of key documents.

• Communicate: Stay in touch with HR and payroll departments.

• Understand local rules: Familiarize yourself with Japanese business culture and tax deadlines.

• Seek professional advice: For complex tax or social security questions, consult a tax advisor familiar with Japan.

Conclusions on intra-company transfers to Japan

Moving to Japan on an intra-company transfer is a structured process, but understanding tax, payroll, and social security obligations is essential for a successful relocation. Start preparing early and seek expert advice to ensure a smooth transition and a successful relocation or assignment to Japan.

Frequently Asked Questions on how to move to Japan

Q: How long can I stay in Japan on an intra-company transfer visa?

A: The visa is typically issued for 1, 3, or 5 years and can be renewed.

Q: Can my family move with me?

A: Yes, spouses and children can apply for dependent visas.

Q: Do I need to file a tax return in Japan?

A: If your only income is salary from your Japanese employer, taxed at source via a Japanese payroll and a year-end adjustment is done, a Japanese tax return may not be required. Otherwise, annual filing is usually needed.

Contact us should you require further clarifications on how to move to Japan (or other destinations) on an intra-company transfer arrangement and/or have a look at some of the other insights we have published.