freee
フリーCloud accounting software · freee K.K.
- Fees
- Varies
- English
- No
Beginner-friendly cloud accounting built around guided workflows, popular with sole proprietors for blue-return filing and e-Tax.
Becoming a sole proprietor in Japan
The 開業届, the blue return, and the money systems freelancers set up first.
Direct answers
File a 開業届 with your tax office and the 青色申告 application at the same time; set up cloud accounting and reserve 20–35% of profit for taxes.
Key points
- The 開業届 registers you as a sole proprietor — free and quick.
- File the blue-return application at the same time for the deduction.
- Use cloud accounting (freee, Money Forward) to keep books.
- Reserve 20–35% of profit for tax, pension, and health insurance.
The setup steps
Register by filing a notification of business opening (開業届) with your local tax office, ideally within about a month of starting. At the same time, submit the blue-return application (青色申告承認申請書) to unlock a deduction of up to ¥650,000 and loss carry-forward. Consider a dedicated business bank account and card to keep records clean, and confirm your residence status permits self-employment.
The money systems to build
Bookkeeping is the ongoing work, and cloud tools like freee or Money Forward Cloud automate most of it by importing bank and card transactions and generating blue-return forms and e-Tax data. Because you pay your own income tax, resident tax, national pension, and national health insurance, many freelancers move 20–35% of each payment into a separate tax-reserve account so nothing is a surprise at filing time.
Who this is for
- New freelancers and sole proprietors
- Side-business owners going official
What this is not
- Incorporation (会社設立) decisions
- Visa eligibility determinations
Important cautions
- Deadlines and the invoice question matter; consult a 税理士 as you grow.
Related products & services
Money Forward Cloud
マネーフォワード クラウドCloud accounting software · Money Forward
- Fees
- Varies
- English
- No
Cloud accounting with strong automation and integrations, popular with freelancers and small companies that value flexible bookkeeping.
Yayoi
弥生Accounting software · Yayoi K.K.
- Fees
- Varies
- English
- No
A long-established accounting-software brand with desktop and cloud options, widely used and supported by tax professionals.
Frequently asked questions
How do I register as a freelancer (sole proprietor) in Japan?
File a notification of business opening (開業届) with your local tax office within about a month of starting — it is free and short. At the same time, file the blue-return application (青色申告承認申請書) to unlock the up-to-¥650,000 deduction. You keep your existing visa status if it permits the work; some visa types need permission for self-employment, so check your residence status first.
What is the blue return (青色申告) and is it worth it?
The blue return is a filing status that rewards proper bookkeeping. With double-entry books filed electronically, you can deduct up to ¥650,000 from your income, carry losses forward for three years, and deduct family salaries. The trade-off is more disciplined recordkeeping — which cloud accounting software largely automates. For most freelancers with steady income, the tax saving clearly outweighs the effort.
How much should a freelancer set aside for taxes in Japan?
A common rule of thumb is to reserve 20–35% of profit for income tax, resident tax, national pension, and national health insurance combined — higher as your income rises, because income tax is progressive. Remember resident tax and health-insurance premiums are billed based on the prior year, so your bills lag your income. Set the reserve aside in a separate account each month rather than facing it all at filing time.
What about pension and health insurance when self-employed in Japan?
As a sole proprietor you generally enroll in National Health Insurance (国民健康保険) and the National Pension (国民年金), and you pay both yourself — there is no employer split. National Pension is a flat monthly amount; National Health Insurance premiums are income-based and billed by your municipality. You can add optional coverage (e.g. the national pension fund, iDeCo, or income-protection insurance) to close gaps. Budget these into your tax reserve.