Social insurance - Employer has to pay as well.

INorthern European countries are keeping their high ranking in tax-rates and social welfare. Japan is not so much high but there exists social welfare system and laws you have to follow.
Major three are followings :

  1. Unemployment insurance
  2. Health insurance
  3. welfare annuity insurance

If you opened a office in Japan and hired some workers, they are inevitable. Your workers have to pay them besides income tax and your company also have to pay a part of it.
Following graph is tax wedge percentage among OECD countries. As you see, Japan is below OECD average and employer SSC, insurance paid by employer, is not so high. ( Data based on OECD statistic in 2013 1)
Tax wedge Japan and OECD in 2013
You might have thought foreigners might not have to pay in Japan. It is not true. As long as he or she works in Japan, it is obliged to pay.

Hiring a person in developing countries who have paid less and sending him Japan in order to reducing labor cost itself would not be the good idea either. There is strict rule for foreign workers in Japan. You can not just bring people to let them work. If you hire a person with other nationality in Japan, you have to pay as much as other Japanese workers earn. This makes no labor cost advantage over Japanese. First of all, you can not hire an alien in Japan if he has no speciality described in the law, such as professor, technician, artist, licensed ability and so on.

For example, you can not hire a new clerk for a job in Japan from overseas but a clerk who speaks multi-language is well-satisfied the conditions. Japan is taking a closed-door policy for low waged works to foreigners. In reducing population, it might not be the best practice. The restoration of the Tohoku region from the 2011 earthquake, building rush caused by 2020 Olympic games and sustaining social infrastructure, such as bridges, tunnels, dams and roads, built around last Tokyo Olympic games, Japan needs workers for simple jobs.
Of course, a real world has a chink in the law. You can bring construction workers from low paid countries to Japan as trainees for advanced Japanese construction technology legally. Yet, it will not the real solution and the government is considering to change the policy.


1. Tax policy analysis - OECD,

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