Including Salary from a Foreign Parent Company in Annual Income Calculation for Japan Visa Applications#

When applying for a Status of Residence in Japan, particularly for work-related visas or the Highly Skilled Professional (HSP) visa, an applicant’s annual income is a critical factor for demonstrating stability and continuity. In globally operating companies, it is not uncommon for employees working in Japan to receive part or all of their salary from a parent or affiliated company located overseas. This situation raises a crucial question: “Can salary paid by a foreign entity be included in the annual income calculation for a Japanese visa application?”

This article provides an objective explanation of this issue based on the fundamental principles of Japan’s immigration control system.

The Guiding Principle: Remuneration for Activities within Japan#

As a general rule, the annual income assessed during a visa application review refers to the “remuneration paid for the applicant’s activities conducted in Japan.” The primary purpose for the Immigration Services Agency of Japan (ISA) to verify annual income is to determine whether the applicant can live a stable, continuous, and economically independent life in Japan.

Therefore, income unrelated to the work performed in Japan, such as director’s fees from an overseas company or income from asset management, cannot typically be included in this calculation. The focus is strictly on the compensation received for the activities that will be permitted under the requested Status of Residence.

Cases Where Salary from an Overseas Source May Be Included#

Despite the general principle, salary paid by a foreign corporation may be included in the annual income calculation under specific circumstances. The most common example is the case of an intra-company transferee, or an employee being seconded from a foreign parent company to a Japanese branch or subsidiary.

In such scenarios, even if the salary is paid by the foreign entity, it can be declared as part of the total annual income, provided that it can be objectively proven to be “compensation for the work performed in Japan.”

Key Points and Documentation for Proof#

To include payments from an overseas source, you must prove, in a way that is clearly understandable to a third party, that these payments are directly linked to your professional duties in Japan. Verbal explanations are insufficient; objective documentary evidence is essential.

Typically, this is demonstrated through the following types of documents:

1. Secondment Agreement or Letter of Assignment (Jirei) This is a formal agreement between the sending organization (e.g., parent company) and the Japanese host entity (e.g., subsidiary), or a letter of assignment issued to the applicant. It is crucial that this document clearly states:

   • The period of secondment.
   • The name of the host entity in Japan, the applicant’s job title, and a detailed description of job duties.
   • Clauses regarding remuneration, including the total salary and a breakdown of how much will be paid by each entity (the foreign company and the Japanese company).

2. Certificate of Salary Payment A document issued by the foreign parent company certifying the amount of salary, bonuses, and other allowances to be paid to the applicant. If the payment is in a foreign currency, it is advisable to also state the equivalent amount in Japanese Yen based on the exchange rate at the time of application.

3. Employment Contract or Equivalent with the Japanese Host Entity If the Japanese entity will also be paying a portion of the salary, the employment contract with that entity is required. If a formal contract does not exist, a “Statement of Employment Conditions” (Koyou Jouken Tsuuchisho) detailing the terms of employment will be necessary.

By providing these documents, you can create a coherent and consistent explanation that the total amount—the sum of payments from both the overseas and Japanese entities—constitutes the full remuneration for the applicant’s activities in Japan.

A Note on the Highly Skilled Professional (HSP) Visa#

For those aiming for the Highly Skilled Professional (HSP) visa, the points awarded for annual income carry significant weight. The principle of including foreign-paid salary in the calculation is essentially the same for the HSP application.

However, the screening for the point-based system tends to be more rigorous. The ISA must be convinced that the remuneration, as detailed in the submitted documents, is unequivocally compensation for “highly skilled professional activities.” For example, even if the total salary is high, points may not be awarded if the secondment agreement fails to clearly describe the applicant’s duties in Japan as being of a specialized or technical nature.

Conclusion#

Including salary paid by a foreign parent company in the annual income calculation for a Japanese visa application is not impossible. However, it requires clear, objective proof that the payment is legitimate compensation for the work to be performed within Japan. This must be substantiated with official documents, such as a detailed secondment agreement.

For individuals assigned to Japan under global human resource systems, compensation structures can often be complex. When preparing a visa application, it is crucial to accurately understand where your salary originates and for what purpose it is paid. The key to a successful application lies in careful preparation and coordination with both the sending company overseas and the host entity in Japan to gather the necessary documentation. As the required documents may vary depending on the individual case, it is always recommended to check the latest information on the ISA’s official website and prepare accordingly.