Visa Loophole to Work in Japan as a Freelancer

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What is freelancing?
Why would companies want to have service agreements instead of directly hiring someone?
Two Types of Freelance Works
1. Work-from-home:
2. In-house(On-site):
Only in-house freelancers are able to get a work visa in Japan.
Digital Momad Visa
Nessesary Documents for Visa Application
What is the annual income of a freelance foreigner?
What should I be aware of when I change to a freelance contract?
How to Find Jobs in Japan
Contact us!

What is freelancing?

A freelancer is a sole trader who is not exclusively employed by a particular company, group or organisation, but is socially independent by offering his or her talents and skills. Some people with ‘Engineer/Specialist in Humanities/International Services’ or ‘Highly skilled professional’ visa work on this freelance basis.

Can I get a work visa as a freelancer? Yes, you can. Actualy the contract for obtaining a visa is not limited to an ‘employment contract’, so freelancers who are working under a contract such as an outsourcing contract can also do so!

As some of you may have known, there isn’t a self-sponsor visa in Japan. You have to sign a labor contract with a Japanese company to get a work visa. But that doesn’t mean you have to be employed by them. There are ways to get a de facto self-sponsor visa. You can get a work visa for service agreements with a Japanese company, which leads you not only to a work visa but also a highly skilled professional visa.

Why would companies want to have service agreements instead of directly hiring someone?

For companies in Japan, if they hire someone, they are obligated to take various responsibilities including their social security benefits based on the labor laws. On the other hand, companies’ responsibility will be almost nothing as they are not employers in the case of service agreements. The labor law doesn’t apply to foreign workers with service agreements and companies don’t have to deal with their social security, tax return, insurance, etc. Foreign workers with service agreements will have to take care of their own tax returns, health insurance, and other paperwork when they arrive in Japan and get a work visa.

It is also beneficial for foreigners to have service agreements. If they want to get an investor/business manager visa and establish a company in Japan, there is a bunch of regulations and expenses. For instance, the minimum capital is ¥5 million, and you have to have an office in Japan and a business partner. But if you are a freelancer, you don’t have to establish a company and thus expenses are way smaller than founding a company.

Two Types of Freelance Works

There are broadly two types, one is the work-from-home style and the other is in-house(on-site)style.

1. Work-from-home:

Freelancers who work from home usually have project-based contracts. You get paid when the service is provided for a service contract, and when the work is being executed for an outsourcing contract.

2. In-house(On-site):

In-house freelancers, most of the time, sign a project-based contract and work at the client’s office. Contracts are usually renewed or terminated every few months and you get paid every certain period of time.

Out of these two types of freelance works, only the second one: in-house freelancers are able to get a work visa in Japan. Even if you have worked as a freelance in your own country, you will have to work as an in-house freelance for a certain amount of time in order to be eligible to apply for a work visa. After a while, you will be eligible for other kinds of visas including the permanent resident visa and allowed to do other kinds of freelance works including the first one.

Only in-house freelancers are able to get a work visa in Japan.

Even if you sign a service agreement with a Japanese company instead of directly being hired by them, you still need to be sponsored by them to apply for a work visa. Furthermore, it has to be proven that you work full time at their office like the second example above. You will not be eligible for the work visa if you are to be offered work only when they need you to do something. Foreign workers have to work the same way as other workers at the company. It is illegal for foreign workers to do what is not described on the contract under the company’s name, and they shall be punished. Therefore, the contracts have to be written to be eligible for the work visa, and simply signing a service agreement without caution may cause a problem afterward.

In addition, you will most likely be able to receive more stable revenue by working on-site as you usually get paid monthly or in a certain period of time. That is beneficial not only for the visa application process but also for foreign workers themselves as it is easier to plan for future revenue.

It might be nice to consider asking the Japanese hiring companies to sponsor you for service agreements instead of direct employment.

Digital Momad Visa

Good news for freelancers who have been working as active professionals for more than five years after university graduation and there is no any clients (visa sponsor) in Japan: on 2 February 2024, the Japanese Minister of Justice made specific reference to the digital nomad visa. Details on the procedure are still to be finalised, but will be made available soon through public comment to the Japanese public. Please refer to this page first. “Japan’s New Digital Nomad Visa: Extended Stays and Remote Work Opportunities in 2024”

Nessesary Documents for Visa Application

In order for you to apply for a visa, your contracting client company must provide you with the following documents. If they do not provide these, you will not be able to apply for a visa. The following is an example of the required documents

Total statutory records, such as withholding tax certificates for salary income of employees of the contracting client for the most recent previous year (copy of the receipt stamp).
Application form issued by the contracting client for preparation by his/her organisation
Contractor agreement with the contracting client
Payment record from the contracting client
Your tax return, etc.

What is the annual income of a freelance foreigner?

When applying for an HSP (Highly skilled professional) visa, a certificate of expected annual income is required. As you all know, the amount of this annual income has a significant impact on the points.

For freelancers, the annual income certificate is provided by the client company with whom you have a contract. Your annual income then becomes the remuneration paid to you by the client company and, for accounting purposes, corresponds to your sales as a sole proprietorship. It is the amount of remuneration from the outsourcing contract accumulated over a period of one year. Therefore, you can expect a higher amount of remuneration than when you were a salaried employee. This is a major advantage for freelancers applying for an HSP visa.

However, if you then stack up your expenses and file a tax return with tax savings, your taxable income will be very low. This would have an impact on your permanent residence application. In this sense, if you are aiming to apply for permanent residence, you’d better not to heed the advice of your tax adviser. You will get neither of the two fruits – tax savings and permanent residence.

What should I be aware of when I change to a freelance contract?

Suppose you used to work for a company on an employment contract, but you change your contract and switch to a freelance contract. In that case, the work itself would not change. However, you will need to go through a number of procedures.

First, you need to notify the Immigration Department of the change of contract. Then, you also need to switch from Social Insurance to National Health Insurance (Kokumin Kenko Hoken) and National Pension (Kokumin Nenkin). In other words, even if you work for the same company, you need to switch to National Health Insurance/National Pension if your contract changes from being an employee based on an employment contract and being covered by social insurance to being a freelancer based on a work contract. This procedure is carried out at the ward office or city hall where you live. You need to complete the switchover procedure within 14 days of losing your company’s social insurance, so please schedule the switchover once you have decided on a changing contract date.

If you have not completed the health insurance and pension procedures and are uninsured or without a pension, this will have a major impact on your permanent residence application, so be really careful. Even if you make retroactive payments at a later date, it will not be a proper payment. So please complete the procedures and make your payments on time.

How to Find Jobs in Japan

You might be looking for jobs on the internet if you are overseas at the moment. For instance, if you visit a website called GaijinPot, you can see job opportunities both in English and Chinese and some of them are accepting applicants who are currently not in Japan. In reality, it is difficult to find a Japanese company to sponsor your work visa as a freelance unless you are either an IT engineer, designer, creator,or consultant as those industries are the only industries that are widely open for freelance workers. Generally, you have an interview after the resume screening. Although Coronavirus is somewhat forcing Japanese companies to get active on video interviews, they will most likely still prefer to have at least the final interview in Japan.

Contact us!

It is recommended to make a few appointments before coming to Japan to minimize the expenses and speak with a Gyouseishoshi Immigration Lawyer specialized in the visa application. Our firm is happy to give you some tips to get you a work visa more easily. Feel free to reach out to us.