Naturalization for Company Executives and Business Owners｜How to Explain Financial Statements, Registration, and Director’s Compensation

Introduction｜Why Naturalization for Company Executives Is Special

One of the key requirements for naturalization in Japan is having a stable and continuous livelihood.
However, the income structure of company executives and business owners is quite different from that of ordinary employees.

• Their income depends heavily on the company’s business performance.
• They often earn through director’s compensation or dividends, not a fixed salary.
• They are responsible for their own corporate taxes and insurance obligations.

Therefore, the Legal Affairs Bureau reviews both sides of the applicant’s situation:
“Is the individual’s personal life financially stable?” and “Is the company’s management sound?”
In other words, business owners must prove the stability of both the corporate and personal aspects — making this one of the more complex types of naturalization applications.

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Three Key Points the Examiners Check

① Corporate Reality and Financial Stability

The examiner will review documents such as financial statements and corporate tax filings to assess business continuity and profitability.
Even if the company has posted losses, an explanation showing improvement or stability can still be acceptable.

② Personal Livelihood Stability

Based on your director’s compensation, dividends, and family situation, the examiner checks whether your income sufficiently covers your living expenses.
If there are inter-company loans or reimbursements between you and the company, they must be clearly explained.

③ Fulfillment of Public Obligations

Payment records for corporate tax, consumption tax, income tax, pension, and social insurance serve as evidence of being a responsible taxpayer and honest business owner.

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Required Documents（for Company Executives / Business Owners）

Corporate Documents

• Certified Copy of Corporate Registration (登記事項証明書)
• Financial Statements (Profit & Loss, Balance Sheet, Statement of Changes in Net Assets)
• Corporate Tax Returns (Forms No. 1, No. 4, and account item details)

Personal Documents

• Withholding Tax Slip or Certificate of Salary Payment
• Copy of Individual Income Tax Return (with tax office stamp or e-filing ID)
• Municipal/Prefectural Tax Certificates and Tax Payment Proofs
• Health Insurance Card (showing social insurance enrollment)
• Pension Record Statement (for both National and Employees’ Pension)

💡 It’s essential to clearly separate corporate and personal finances and explain which income sources cover living expenses.

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What the Examiner Looks for in Financial Statements

During review, the Legal Affairs Bureau primarily checks the Profit & Loss statement and Balance Sheet submitted to the tax office.

They focus on:

• Trends in sales and operating profit
• The amount and consistency of director’s compensation
• The company’s asset–liability balance
• Whether there are unpaid taxes or liquidity problems

Examiners are not accounting experts — they assess from a practical standpoint whether your business appears stable and sustainable.
Even deficit years are acceptable if you can explain them (e.g., temporary investment or recovery to profit the next year).

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Corporate Registration Certificate｜Key Points to Check

The corporate registration is an official record of the company’s status. Make sure to verify:

• Your title (Representative Director, Director, etc.) is up to date
• The registered address matches your actual office location
• There are no records of suspension, dissolution, or liquidation

If you are involved in multiple companies, submit all corporate certificates and describe your role in each within your written statement.

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Director’s Compensation, Salary, and Dividends｜How to Explain Each

Director’s Compensation

This is regarded as your main source of income for living expenses.
You should clearly describe how much you receive monthly and how it was decided.

Dividends

Dividends are considered supplementary income, not stable livelihood proof.
It’s safer to emphasize that your director’s compensation supports your daily life.

Example Sentence (for the Written Statement)

As the representative director of ABC Corporation, I receive a monthly director’s compensation of ¥___, which I use for living expenses, taxes, and insurance payments.
The company’s management is stable, and I expect this income level to continue.

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Case-by-Case Advice

✅ Small-Scale or Family-Run Companies

Since the company’s income is often identical to the owner’s household income, explain the flow of funds between company accounts and living expenses in detail.

✅ Mixed Corporate and Personal Accounts

Keep business and personal accounts clearly separated and specify which payments belong to each.

✅ Low Income but Stable Operation

Examiners value consistency over amount. Even a modest income can be accepted if it is regular and traceable.

✅ Managing Multiple Companies

Identify your primary company, and describe your other roles as “secondary involvement” to maintain clarity.

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Writing Tips for the Reason Statement and Supplementary Explanation

• Explain “corporate management” and “personal livelihood stability” in separate paragraphs.
• Attach meeting minutes or internal decisions showing how director’s compensation was determined.
• If your financial statements were prepared by a tax accountant, include the cover page and preparation date.

In practice, an administrative scrivener reviews the consistency of all corporate data and helps structure the explanation logically.

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Common Reasons for Refusal & How to Avoid Them

Common Issue	How to Prevent It
Director’s compensation too low to cover living costs	Prepare a comparison chart of income vs. household expenses
Continuous financial losses	Clarify that it’s due to investment or temporary cost increase
Unpaid corporate or consumption tax	Pay in full and attach receipts
Multiple companies, insufficient explanation	Clearly indicate one “main company” and list others as concurrent positions

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Conclusion｜Naturalization for Business Owners Requires Both Corporate and Personal Proof

For business owners, naturalization is more than just submitting income documents.
It’s about showing how you’ve contributed to Japanese society through your business,
and how your personal life is built on a stable, transparent financial foundation.

To summarize the key points:

• ✅ Ensure consistency between financial statements, corporate registration, and compensation records.
  Don’t just match numbers — be able to explain the reasoning behind them.
• ✅ Recognize that corporate stability ≠ personal stability.
  Even profitable companies may face questions if the director’s income is too low.
• ✅ Build a coherent story in your supplementary statement.
  Describe your management activities and daily life as one consistent narrative.

Applying for naturalization as a business owner is not just a bureaucratic process —
it’s an opportunity to organize your professional and personal foundations.
With expert support, your application can achieve far greater precision and credibility.

At Ishinagi Administrative Scrivener Office, we provide full support for business owners —
from reviewing corporate documents to drafting persuasive reason and explanation statements.

Ishinagi Administrative Scrivener Office

If you want to obtain Japanese nationality quickly and securely, or if you feel uncertain about preparing the required documents, please feel free to consult our office in Yodogawa-ku, Osaka.
We handle requests from all over Japan and provide the most suitable support based on our experience with immigration procedures and applications to the Legal Affairs Bureau.

If you wish to proceed with your naturalization application smoothly and with confidence, please don’t hesitate to contact us.

▶ See our fee schedule here

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