Japan Company Director Loan Agreement And Foreign Exchange Reporting
Foreign founders running a company in Japan often end up fronting their own cash to keep things moving (the classic “director loan” or 役員借入金). If that money comes from an overseas account or involves a non-resident lender, you’ll need more than just an internal loan contract. Japan’s Foreign Exchange and Foreign Trade Act (外為法) has its own compliance hoops to jump through.
1. Director Loan Agreement (Money Consumption Loan Contract) Stamp Tax Rules
Drawing up a money consumption loan contract in Japan triggers stamp tax (印紙税). The required stamp amount depends on the loan size, and the National Tax Agency has the official table:
2. Cross-Border Lending and Foreign Exchange Filing (Capital Transaction Report)
If you’re wiring loan funds from a personal overseas account into a Japanese corporation, or if the loan between a non-resident and a resident exceeds the statutory reporting threshold, you’ll need to file a post-facto report under the Foreign Exchange Act:
- Ministry of Finance: Inward Direct Investment and Capital Transactions under the Foreign Exchange and Foreign Trade Act
- Bank of Japan (Agency Services): Procedures and Report Submission Guide under the Foreign Exchange Act
3. What Japanese Banks Will Ask For During Their Review
When a large personal sum lands in a Japanese corporate account as a director loan, the receiving bank will typically want to see:
- Original or copy of the money consumption loan contract (stating interest rate, repayment deadline, and purpose of funds).
- Explanation of the individual’s source of funds (tax payment certificates, personal bank statements, or proof of legitimate proceeds such as a property sale).
- Board resolution or shareholders’ meeting minutes (proving the loan went through proper internal corporate approval).