Freelance in Japan: How to Register as Kojin Jigyonushi and File Taxes With freee

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Going freelance in Japan is more achievable than most expats assume — but it does require navigating a specific set of administrative steps. Whether you are a designer, developer, consultant, English teacher, or online content creator, the process of becoming legally recognized as a self-employed individual follows the same path: register as a kojin jigyonushi (個人事業主), elect the blue return system, and set up proper bookkeeping.

This guide walks you through each step in plain English, from filing your opening notification at the tax office to using freee — Japan’s leading cloud accounting software — to handle your annual tax return. By the end, you will understand exactly what paperwork is needed, what tax obligations apply, and how to stay compliant without hiring an accountant from day one.

What Is a Kojin Jigyonushi?

A kojin jigyonushi (個人事業主) is a sole proprietor — an individual who runs a business independently, without incorporating. It is the simplest and most common business structure for freelancers and self-employed people in Japan.

Unlike forming a kabushiki kaisha (KK, a joint-stock company) or a godo kaisha (GK, a limited liability company), registering as a kojin jigyonushi involves almost no setup cost and minimal ongoing compliance burden. There is no minimum capital requirement, no company registration fee, and no mandatory auditing.

Key characteristics:

• Legal identity: You and the business are legally the same entity. Business profits are taxed as your personal income.
• Liability: You bear unlimited personal liability for business debts (unlike a corporation).
• Tax filing: You file an annual kakuteishinkoku (確定申告, income tax return) each February–March covering the previous calendar year.
• Best suited for: Freelancers, consultants, creators, and anyone earning self-employment income below the consumption tax threshold (currently ¥10 million in annual revenue).

If your annual revenue is likely to stay below ¥10 million for the foreseeable future and you do not need the liability shield of a corporation, starting as a kojin jigyonushi is the practical choice.

Step 1 — File Your Opening Notification (開業届)

The kaigyou todoke (開業届, Business Opening Notification) is a one-page form submitted to your local tax office (税務署, zeimusho). It officially informs the government that you have started a business.

Key facts

How to find your local tax office

Go to the National Tax Agency website (nta.go.jp) and use the tax office locator tool (税務署の所在地などを調べる). Enter your address to find the correct office.

Can I file online?

Yes. The National Tax Agency’s e-Tax system allows you to submit the opening notification electronically. You will need a My Number card and a compatible IC card reader, or you can use the smartphone app authentication option introduced in recent years.

What business type should I list?

On the form, you will be asked to describe your jigyo no shurui (事業の種類, type of business). Be reasonably specific — for example, “Web design and development,” “English language instruction,” or “Freelance translation services.” Vague descriptions like “consulting” are acceptable but more specific descriptions help if you ever need to explain your activities to a bank or client.

What happens after filing?

The tax office stamps your copy and retains the original. You will not receive a formal “approval” — the notification is simply an administrative record. However, this stamped copy is often requested by banks when opening a business bank account, by co-working spaces, and occasionally by clients who need to verify your business status.

Step 2 — Apply for Blue Return (青色申告承認申請書)

Immediately after (or at the same time as) filing your opening notification, submit the ao-iro shinkoku shonin shinsei-sho (青色申告承認申請書, Application for Approval of Blue Return).

This is one of the most financially significant decisions you will make as a freelancer in Japan.

What is the blue return?

Japan’s tax system offers two types of income tax filing for sole proprietors:

• White return (白色申告, shiro-iro shinkoku): Simple cash-basis bookkeeping. No special deduction.
• Blue return (青色申告): More rigorous bookkeeping in exchange for significant tax deductions and privileges.

Blue return benefits

1. Special deduction of up to ¥650,000

If you use double-entry bookkeeping AND file electronically via e-Tax, you are entitled to a ¥650,000 deduction from your business income before income tax is calculated. This deduction alone can save a freelancer earning ¥4 million in net profit approximately ¥97,500–¥130,000 in income tax, depending on their tax bracket.

If you file on paper or use simplified single-entry bookkeeping, the deduction is reduced to ¥550,000 (double-entry, paper) or ¥100,000 (single-entry).

2. Three-year loss carryforward

If your business runs at a net loss in a given year, you can carry that loss forward and offset it against profits in the following three years. This is particularly valuable in your first year when startup costs may exceed revenue.

3. Depreciation of assets (special provisions)

Blue return filers can use accelerated depreciation methods and claim certain small asset write-offs (up to ¥300,000 per item) that white return filers cannot access.

4. Spouse and family employee deductions

If your spouse works in your business, you may be able to deduct their salary as a business expense — something not available under the white return system.

Deadline for the application

Missing this deadline means you must wait until the following year to elect blue return status. Submit this form at the same time as your opening notification to be safe.

Step 3 — Set Up freee for Bookkeeping

Once registered, you need an ongoing system for recording income, expenses, and invoices. This is where freee (フリー) comes in.

Why freee?

freee is Japan’s most widely used cloud accounting software for small businesses and sole proprietors. Its core advantage over traditional Japanese accounting software is its question-based setup interface: instead of presenting you with a blank chart of accounts and expecting you to know accounting terminology, freee asks plain-language questions to configure your books correctly from the start.

Key reasons freelancers in Japan choose freee:

• No accounting knowledge required. The guided setup and transaction categorization suggestions mean you can start recording expenses and income on day one without understanding debit/credit entries.
• ~3,200 bank and credit card connections. freee can automatically import transactions from most Japanese banks, credit cards, and payment services — including PayPay, LINE Pay, Rakuten, and major regional banks. This eliminates manual data entry for the majority of your financial activity.
• Blue return compliance built in. freee automatically generates the double-entry bookkeeping records required for the ¥650,000 blue return deduction and produces the required balance sheet (貸借対照表) and income statement (損益計算書).
• Direct e-Tax filing. freee connects directly to the National Tax Agency’s e-Tax system, allowing you to submit your kakuteishinkoku without printing a single page.
• Invoicing and expense management. freee includes invoicing tools compliant with Japan’s Qualified Invoice System (インボイス制度, applicable if you are a registered consumption taxpayer), plus receipt scanning via the smartphone app.
• Japanese and English support. While the interface is primarily in Japanese, freee offers English-language customer support resources and the UI is clear enough that intermediate Japanese readers can navigate it with minimal friction.

Start your free trial of freee

The free trial gives you full access to the paid features for a limited period. After that, the starter plan for sole proprietors costs approximately ¥1,980/month (prices subject to change), which is tax-deductible as a business expense.

Getting started with freee

1. Create an account at freee.co.jp using your email address.
2. Run the initial setup wizard. freee asks about your business type, whether you are filing blue or white return, your fiscal year start (January 1 for most sole proprietors), and your registered business name.
3. Connect your bank accounts. Navigate to “口座” (accounts) and add your business bank account. freee will import your recent transaction history automatically.
4. Categorize imported transactions. For each imported transaction, freee suggests a category (e.g., “消耗品費” for office supplies, “通信費” for phone/internet). Review and confirm or correct the suggestions. Over time, freee learns your patterns and the suggestions improve.
5. Set up recurring income. If you have regular clients, create invoice templates in freee and mark them as paid when payment arrives. This keeps your accounts receivable current.

Understanding Japanese Freelance Taxes

Before your first tax filing, it helps to understand the taxes you will owe as a kojin jigyonushi.

Income tax (所得税, shotokuzei)

Income tax in Japan is progressive, ranging from 5% to 45% depending on your taxable income:

A 2.1% surtax (復興特別所得税) is added to all income tax amounts to fund post-earthquake reconstruction. This applies through 2037.

Taxable income is your gross business revenue minus deductible business expenses, minus the blue return special deduction, minus personal deductions (basic deduction of ¥480,000, social insurance premiums, etc.).

Residence tax (住民税, juminzei)

A flat 10% of your prior year’s income is collected by your municipality. Residence tax is assessed in June of the following year based on your confirmed income tax return. You will receive a payment notice and can pay in four installments or as a lump sum.

Note: In your first year of freelancing, your residence tax bill from the previous year (when you were an employee) may still arrive — this is normal. The residence tax bill based on your first full year of freelance income will arrive the following June.

Consumption tax (消費税, shohizei)

If your taxable sales in a given fiscal year exceed ¥10 million, you become a consumption taxpayer in the year two years later and must collect 10% consumption tax from clients (with a reduced 8% rate on food) and remit it to the government.

Most freelancers starting out do not need to worry about this threshold immediately. However, if you register as a Qualified Invoice Issuer (適格請求書発行事業者) under the invoice system — sometimes necessary when your clients are corporations that want to claim input tax credits — you become a consumption taxpayer regardless of your revenue.

Social insurance and pension

As a kojin jigyonushi, you are no longer covered by your employer’s shakai hoken (social insurance). You must enroll in:

• Kokumin kenko hoken (国民健康保険, National Health Insurance): premiums vary by municipality and are income-based, typically 8–12% of the prior year’s income up to a ceiling.
• Kokumin nenkin (国民年金, National Pension): a flat monthly premium of approximately ¥16,980 (2026 rate; adjusted annually).

Both are deductible from your taxable income, which reduces your income tax and residence tax burden.

Estimate your freelance taxes with our Side Income Tax Calculator to see how different income levels and deductions affect your take-home pay.

Filing Your First Tax Return With freee

The kakuteishinkoku (確定申告) filing period runs from February 16 to March 15 each year, covering income earned in the prior calendar year (January 1 – December 31).

Here is a condensed walkthrough of the process in freee:

1. Reconcile your accounts (January)

Before filing opens, use January to review the previous year’s transactions in freee. Confirm that all income has been recorded, all deductible expenses are categorized, and any end-of-year adjustments (like depreciation of equipment) have been entered.

2. Run the profit and loss statement

In freee, navigate to “レポート” (Reports) and open the “損益計算書” (Income Statement) for the full calendar year. This shows your gross revenue, total expenses by category, and net profit. This is your starting point for the tax return.

3. Start the tax return wizard

freee has a dedicated “確定申告” section in the menu. Click “申告書を作成する” (Create Tax Return). The wizard walks you through each section:

• Business income: Pre-filled from your freee books.
• Other income: Enter any salary income (if you kept a part-time job), dividend income, or rental income.
• Deductions: The wizard prompts you for social insurance premiums paid, life insurance premiums, medical expenses over ¥100,000, earthquake insurance, and the blue return deduction (applied automatically if your books meet the requirement).
• Tax credits: Input dependent information, disability status, and other applicable credits.

4. Review the calculated tax amount

freee displays your estimated income tax, shows any withholding tax already deducted by clients (源泉徴収, genzen choshu), and calculates whether you owe additional tax or are due a refund.

5. File via e-Tax

Connect freee to e-Tax using your My Number card (via a card reader or smartphone NFC). freee transmits your return directly to the National Tax Agency. You receive an electronic confirmation receipt immediately.

6. Pay any remaining tax (or receive your refund)

If you owe tax, you can pay via bank transfer, convenience store payment slip, or credit card through the e-Tax payment portal. Refunds are deposited directly to the bank account you specified on the return, typically within 3–6 weeks of filing.

Common Questions

Will freelancing affect my visa status?

This is a critical point for non-Japanese residents. The rules depend on your visa type:

• Engineer/Specialist in Humanities/International Services (技術・人文知識・国際業務): This visa permits work only for the sponsoring employer in the listed activities. Taking on freelance clients in the same field may or may not be permitted without a status change — consult the Immigration Services Agency or an immigration lawyer before proceeding.
• Highly Skilled Professional (高度専門職): Generally permits a broader range of work activities, but review your specific visa conditions.
• Business Manager (経営・管理): Designed for business owners, but the requirements (office space, minimum capital or employees) are more stringent than simply filing a kojin jigyonushi notification.
• Permanent Resident or Spouse of Japanese National: No work restrictions. You can freelance freely.

Filing an opening notification as a kojin jigyonushi does not automatically change your visa status, but working outside your visa’s permitted scope is a serious violation. Always confirm with an immigration professional before starting freelance activities.

Can I keep my salaried job while freelancing?

Yes. Many people in Japan operate as kojin jigyonushi alongside full-time employment. Your employer’s HR department does not need to be notified in most cases — though some employment contracts prohibit side work, so check yours.

For tax purposes, if your freelance side income exceeds ¥200,000 in a calendar year, you are required to file a kakuteishinkoku (income tax return) to declare it. The process is the same as described above; freee handles both your employment income (from your gensen choshu hyo, the annual withholding statement your employer provides) and your business income in a single return.

Do I need to hire an accountant?

For most freelancers starting out, the answer is no — especially if you use freee. The software handles the bookkeeping complexity, generates compliant financial statements, and guides you through the tax return. The question-based interface was specifically designed to make accounting accessible to non-specialists.

That said, consider consulting a zeirishi (税理士, certified tax accountant) if:

• Your annual revenue exceeds approximately ¥5–10 million.
• You have complex income from multiple sources (real estate, investments, overseas income).
• You are considering incorporating as a KK or GK.
• You receive a tax audit notice from the NTA.

Many tax accountants in Japan now offer subscription-style services starting around ¥15,000–¥30,000 per month that include quarterly reviews and year-end filing preparation.

What records do I need to keep?

Under blue return rules, you are required to retain all supporting documents — receipts, invoices, bank statements, contracts — for 7 years. freee’s receipt scanning feature (using the smartphone camera) creates a digital archive that satisfies the electronic bookkeeping law (電子帳簿保存法, Denshi Chobohzon-ho) requirements introduced in 2024, so you do not need to keep paper originals for most documents.

Conclusion

Registering as a kojin jigyonushi in Japan is a straightforward process once you know the steps: file your opening notification at the local tax office within one month of starting, submit your blue return application at the same time, and set up freee to handle the bookkeeping from day one. The ¥650,000 blue return deduction alone makes the modest effort of double-entry bookkeeping financially worthwhile for almost any freelancer.

The combination of proper registration and good accounting software removes the two biggest sources of stress for new freelancers in Japan: legal uncertainty and tax filing. With freee handling the numbers automatically from your connected bank accounts, your monthly bookkeeping takes minutes rather than hours, and your annual tax return becomes a guided wizard rather than a paper ordeal.

Manage your household budget alongside business finances with our Budget Planner — keeping personal and business spending visible in one place makes it easier to plan quarterly tax payments and manage cash flow through slower months.

Ready to get your books in order? Get started with freee today and take the administrative complexity out of going freelance in Japan.

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