Q: Can we hire employees in Japan without establishing a legal entity?
A: Yes. For companies exploring or entering the Japanese market, it’s possible to hire local talent without setting up a legal entity by using an Employer of Record (EOR) arrangement. This allows you to operate flexibly while ensuring compliance with Japanese labour laws.
Q: How quickly can we onboard a candidate through an EOR arrangement?
A: In most cases, onboarding can be completed in less than 48 hours after the contract is finalized and required documentation is submitted. This makes it ideal for companies needing a fast and compliant hiring solution.
Q: What are the standard payroll practices in Japan?
A: Monthly payroll is most common, typically processed on the 25th or the end of the month. Payroll must include social insurance deductions, tax filings, and other statutory items – each governed by local regulations.
Q: Are there specific rules around employment contracts in Japan?
A: Japan recognises both permanent and fixed-term contracts. It’s important to clearly define:
- Terms of employment
- Job role
- Place of work
- Working hours
- Wages
- Holiday
- Termination
It is not legally required to document the contract but strongly recommended.
Q: What statutory benefits are required by law in Japan?
A: Employers must provide:
- Social insurance (health, pension, unemployment, and workers’ comp)
- Paid annual leave – After 6 months of employment, the number of days is to be decided by the employer under the employment condition.
Many companies also offer additional benefits to stay competitive in talent acquisition.
Q: Is termination in Japan straightforward?
A: Not always. Japan has strong labour protections, and termination often requires mutual agreement or substantial cause. Proper procedures and documentation are crucial to avoid disputes.
Q: Which industries benefit most from flexible hiring models in Japan?
A: Sectors such as technology, consulting, luxury retail, and healthcare often adopt flexible models like EOR – especially when testing the market or running lean operations.
Q: What should we consider when evaluating HR outsourcing or EOR providers in Japan?
A: Key factors include:
- Local compliance expertise
- Service coverage (payroll, benefits, recruitment)
- Multilingual support
- Proven experience with international clients
Understanding local practices is essential, even if the service is managed externally.
Q: What’s the best first step to explore hiring or expansion in Japan?
A: Start with a conversation. Whether you’re exploring the market or already planning your first hire, speaking with a local HR expert can help clarify your next steps – from legal setup to workforce planning.
At Links, our dedicated team provides full in-country support. Every part of our EOR services is managed directly by our local experts. This on-the-ground presence allows us to deliver faster, more responsive service. In many cases, we can help businesses onboard new employees within just 48 hours, enabling rapid market entry or project kick-off without the need to set up a local entity. Contact us today to learn more!