The legislation of Japan also doesn’t envisage any uniform legal regime applicable to crypto assets. The legal status shall be determined in accordance with their functionality and designation. To those crypto assets used for settlements, the legislation related to payment operations shall be applied. If tokens are recognized to be securities, respective legislation shall be applied to them taking into account the characteristics attributed to each security type.
It should be noted that the local legislation requires from the persons who carry out purchase, sale, or exchange cryptocurrency, render intermediary services for such operations as well as manage crypto assets on behalf of third parties to pass the registration procedure and obtain the status of provider for rendering cryptocurrency exchange services.
How to Register a Cryptocurrency Exchange License in Japan
Obtaining a cryptocurrency exchange license in Japan can companies registered as Kabushiki Kaisha – that corresponds to the form of an ordinary joint-stock company. In order to register a cryptocurrency exchange license in Japan, the applicant needs to:
- have a positive net worth on the balance sheet;
- have at least 10 mln yen capital;
- operate according to the law;
- establish a satisfactory corporate structure;
- meet the KYC, AML requirements;
- train staff, observing the rules and regulations of the country of operation;
- keep accounting records.
A company applying for the license shall develop and implement a set of measures aimed at preventing data leakage. To this end, a functional IT system shall be created. Customers of the company will know that the status of cryptocurrency is legally undefined.
In Japan, fiat currencies and deposit/trust funds shall be stored separately on a mandatory basis – that is a compulsory requirement. Cryptocurrencies that are at the disposal of the company and its customers shall be clearly separated and shall be identifiable. The respect for this obligation is to be verified in the course of an independent annual audit.
Requirements for a Company Applying for the Cryptocurrency Exchange License in Japan
Requirements:
- Staff. The company staff shall consist of 5 to 10 employees. Japanese recruiting agencies can help you find them. This is a good solution but requires extra costs. Alternatively, you can apply to state agencies. They will place your advertisement at no cost. A non-resident of Japan can represent the company. If he/she has a work permit for Japan, he/she is entitled to hold the position of local director.
- Authorized capital. Funds shall be placed into an account with a Japanese bank. Prifinance specialists will help open it. If the company has no account or does not want to open it for some reason, it can use a Japanese resident director’s account.
- Office. The company shall have an office with a physical address in the country of operation. A virtual representative office is not allowed.
Prifinance Assistance in Getting the License
We provide comprehensive support throughout the process, from preparation to obtaining permits to work with cryptocurrencies in Japan. A range of services includes the following:
- registration of a joint-stock company;
- representation in a Japanese bank;
- preparation and translation of documents;
- search for a nominee director;
- search for an office;
- correspondence forwarding;
- making a seal.
The cost of company registration in accordance with Japanese legislation depends on a number of factors. First of all, this relates to the specifics of interaction with representatives of financial institutions and the deadlines for the preparation of documents. The office rental costs and costs related to the fulfillment of labor obligations shall be paid as an additional service. We will be glad to develop specific solutions for your business goals.
