Investors who open a crypto company in Japan need to observe both the company formation processes and the requirements for a crypto license in Japan application. This is needed for crypto-asset exchange businesses and for the performance of other digital asset-related activities.
Virtual asset service providers (VASP) are subject to regulatory compliance, and the need to obtain the VASP license in Japan.
Our company formation agents in Japan can provide complete details on the licensing requirements as well as the regulatory framework for these types of companies.
Table of Contents
The crypto license in Japan
The Financial Services Agency in Japan is the authority that handles the registration, therefore the licensing, of crypto asset exchange providers in the country.
Investors who open a company in Japan that will be engaging in crypto exchange services, as per the definition included in the Payment Services Act, will need to apply for a crypto license in Japan. The license application process includes a prior consultation with the authorities, followed by the actual license application submission. Our company registration experts summarize the process:
- Prior consultation: the company submits an initial questionnaire; if no objections arise, it will then move on to preparing the documents (proof of company registration, the business plan, information about the shareholders, etc); this phase ends with an onsite inspection;
- License application: if the documents and the onsite inspection are in order, the company is allowed to submit its license application to the authorities.
The interview, document submission phase, and onsite inspections can extend over a total period of more than three months. The license application is also subject to careful consideration and the process can last approximately one month.
The legal framework for crypto assets in Japan
Our team specializing in company formation in Japan highlights some of the key regulatory issues to take into account by investors who wish to open a cryptocurrency business:
- Crypto assets are not seen as legal tender;
- A company must hold a VASP license in Japan when it operates as a crypto-asset exchange service provider;
- Registered crypto-asset exchange service providers are listed on the Financial Service Agency’s website and that of the local financial bureau;
- The company offering the services is subject to providing its clients with proper information on the risks associated with these types of transactions.
Investors who wish to open a company in Japan and engage in various crypto-related businesses can read below a short summary of the recent number of registered crypto-asset exchange providers in the country:
- As of September 30th, 2024, there were 29 registered crypto-asset exchange service providers;
- 27 of these companies were registered with the Kanto Financial Bureau;
- 2 crypto companies were registered with the Kinki Financial Bureau;
- Almost all of these companies were handling Bitcoin and Ethereum, while some companies were only handling one type of crypto token.
How to open a crypto company in Japan
In order to register a LLC (limited liability company) in the cryptocurrency domain in Japan, it is necessary to follow these steps:
- Making a company seal;
- Receive the certificate of seal registration;
- Record the Articles of Association with the Japan Legal Affairs Bureau;
- Other steps: included here is the needed to obtain the crypto license in Japan; moving forward, the company will also require a bank account and to register as an employer; our company formation consultants in Japan can offer more details.
Foreign crypto company managers can apply for residency in Japan via the Business Manager visa. The application procedure includes several steps during which the foreign national is asked to provide documents that attest to the business’s value for the economy, as well as provide personal documentation such as a valid travel document and photographs. You can contact us for more details.
Crypto business ideas in Japan
Here are a couple of Bitcoin business ideas which can help you decide what type of cryptocurrency company you can open in Japan:
• Acquiring bitcoins: there are three major ways in which you can acquire bitcoins:
o By accepting bitcoin payments;
o Mining for bitcoins;
o Purchasing bitcoins on a bitcoin exchange. Our Japan company formation advisors can assist you in opening these types of cryptocurrency businesses.
• Engaging in services for bitcoin: for example, you could engage in digital or hardware wallet services. Since owners of bitcoins need a secure place to keep their bitcoins, the online security for their digital wallets is most likely very important for the future of the bitcoin.
If you wish to know if under this visa you can immigrate to Japan, the short answer is that in principle, this is possible. However, in order to be eligible for permanent residency, one will need to remain in the country for then years consecutively (with only short periods out of the country), will need to display good conduct and prove that they have sufficient income to live in Japan.
If you would like to know more about the crypto license in Japan, please contact our Japan company formation specialists.