Should a Chinese or Taiwanese buyer hold a Japanese income property through a company or as an individual?

In short: when a non-resident from Greater China holds an income property in Japan, whether to hold it "through a company (a Japanese asset-management company) or as an individual" is a question to settle before buying. The dividing lines are mainly three — (1) rent received by a non-resident individual comes with withholding tax and a tax return; (2) rent received by a Japanese company (a domestic corporation) falls outside non-resident withholding, but the company carries setup and running costs; and (3) either way a tax agent may be required. The final judgment on which is more advantageous belongs to a licensed tax accountant; we set out the picture from the practical side of acquiring and managing the property.

This article is for non-resident investors from Greater China (mainland China and Taiwan) considering income-producing real estate in Japan, and for the local real estate and accounting professionals who support them. The final judgment on the holding scheme goes to a tax accountant, the registration of the asset-management company to a judicial scrivener, and the representative's residence status to an administrative scrivener. We (Yotsuba Real Estate Co., Ltd.) confine ourselves to information on acquiring and managing the property; these are engaged as independent business entities, separately.

What changes when a non-resident holds a Japanese income property through a company rather than as an individual?

The biggest change is who receives the rent.

Hold it as an individual, and the rent is received by the non-resident personally. That rent, as consideration for the lease of real estate located in Japan, is domestic source income under Article 161, paragraph 1, item 7 of the 所得税法 (Income Tax Act). Being domestic source income, it is subject to Japanese income tax and a tax return is required.

Hold it through a company — here, a Japanese asset-management company (a domestic corporation) — and the rent is received by the Japanese company. It becomes the company's income, subject to corporate tax, and is no longer a payment to the non-resident personally.

	Individual holding (non-resident personally)	Company holding (Japanese asset-management company)
Who receives the rent	The non-resident personally	A Japanese domestic corporation
Taxation	Income tax (tax return)	Corporate tax and others
Non-resident withholding	Can apply (see below)	Not applicable (payment is to a domestic corporation)
Setup / running cost	Small	Setup cost, annual filing, per-capita inhabitant tax and so on

Which is more advantageous depends on the scale of the rent, the person's other income, and plans for future sale or inheritance. This is a comparison of tax amounts, so it is the tax accountant's call. We do not answer "a company is better" or "an individual is better".

If you set up an asset-management company, who handles the registration and the tax?

To set up an asset-management company in Japan, the roles divide cleanly.

Task	Who
Company incorporation registration	Judicial scrivener
Drafting the articles of incorporation and documents	Administrative scrivener
Filing and judgment on corporate, inhabitant and consumption tax	Licensed tax accountant
Residence status of the representative and officers	Administrative scrivener
Property investigation, brokerage, sale contract	Licensed real estate agent (us)

The incorporation registration is the judicial scrivener's work. The corporate and consumption tax filings after setup, and the judgment on advantage, are the tax accountant's work. We do not enter here. We handle only the real estate side — how to acquire and manage the property.

Where the non-resident becomes the representative, the residence status and how to establish the company's substance (office, books) become issues. Residence status we connect to an administrative scrivener. The practice of managing the property from abroad after acquisition is set out in this article on managing Japanese real estate while living overseas.

How do non-resident rent withholding and the tax agent come into it?

Holding as an individual always raises this withholding.

Article 212, paragraph 1 of the 所得税法 obliges a person who pays domestic source income to a non-resident to withhold tax at the time of payment. Because rent for real estate is such domestic source income (Article 161, paragraph 1, item 7), the tenant's rent is in principle subject to withholding of 20.42% (20% income tax plus special reconstruction income tax) under Article 213, paragraph 1. The withheld amount is paid by the 10th of the month following payment.

There is, however, a major exception. Under Article 328 of the Order for Enforcement of the Income Tax Act, rent paid by an individual who has leased land, a house and the like for the residence of that individual or a relative is not subject to withholding. In other words — if the tenant is an individual renting for their own or their family's residence, no withholding; if the tenant is a company or renting for a business purpose, withholding is required. With income properties the tenant is often a business, in which case withholding applies.

Tenant paying the rent	Withholding
Individual renting for own or a relative's residence	Not required (Order Art. 328)
Company / business-purpose tenant	Required (in principle 20.42%)

And for a non-resident to file and pay tax in Japan, a tax agent (nozei-kanrinin) is needed. Article 117, paragraph 1 of the 国税通則法 (Act on General Rules for National Taxes) provides that an individual with no domicile or residence in Japan who needs to handle national-tax matters such as filing a return must appoint a tax agent from among those with a domicile or residence in Japan. On appointment, notification is filed under paragraph 2. Whether the tax agent needs a qualification and whether a company can serve is set out in this article on tax agents. The practical flow of non-resident rent withholding is in this article.

Hold through a company, and the non-resident withholding issue disappears — because it is a domestic corporation that receives the rent. But the company separately has corporate tax filing and the per-capita portion of inhabitant tax that applies even at a loss, and estimating these is the tax accountant's call.

In the practice of acquiring the property, where do company and individual holding diverge?

On the ground of a real estate transaction, the following diverge.

Situation	Individual holding	Company holding
Name on the contract	The non-resident personally	The asset-management company
Needed before contract	Identity and address proof (home-country notarisation, etc.)	Company must exist first; no contract while it is being formed
Financing	Lending to a non-resident individual is limited	The company's substance and accounts are examined
Settlement / remittance	Record of remittance from the home country	A company bank account is a precondition
Registration	Registered in the individual's name (judicial scrivener)	Registered in the company's name (judicial scrivener)

If you decide to hold through a company, the company's formation comes before the property contract — you cannot contract in the company's name until it exists. Mis-time this and you cannot secure a good property. Holding as an individual, allow time to assemble the identity documents through home-country notarisation and the like.

Either registration is handled by a judicial scrivener; we handle up to the investigation, brokerage and sale contract of the property. Commercial and investment property generally is set out in investment and commercial property.

How do local professionals and the Japan side divide the roles?

Between the local real estate and accounting professionals supporting the investor from Greater China, and us on the Japan side, the roles divide like this.

Role	Who
Final judgment on the holding scheme (company or individual)	Tax accountant (Japan)
Registration of the asset-management company	Judicial scrivener (Japan)
Residence status and documents to public authorities	Administrative scrivener (Japan)
Property investigation, brokerage, sale contract, management	Licensed real estate agent (us)
Home-country funds, remittance, local procedures	Local professional

The local professional handles the home-country funding plan and acts as the window to the investor; on the Japan side, the tax accountant, judicial scrivener, administrative scrivener and we each take our own exclusive work. This division is not a single firm taking everything. Each is engaged as an independent business entity, separately. We neither pay nor accept referral fees or introduction commissions.

Frequently asked questions

Q. Is a Japanese income property cheaper on tax if held through a company?
A. Not necessarily. Depending on the scale of the rent, the person's other income and plans for sale or inheritance, company holding can be more advantageous, or its setup and running costs can make it less so. This is a comparison of tax amounts and is the tax accountant's call. We do not answer on advantage.

Q. If a non-resident holds as an individual, is the rent always withheld?
A. Not always. If the tenant is an individual renting for their own or a relative's residence, no withholding applies under Article 328 of the Order for Enforcement of the Income Tax Act. If the tenant is a company or renting for a business purpose, withholding of in principle 20.42% applies (Income Tax Act Art. 212 (1), Art. 213 (1)). With income properties the tenant is often a business, in which case it applies.

Q. If held through a Japanese company (asset-management company), does non-resident withholding become irrelevant?
A. Because it is a Japanese domestic corporation that receives the rent, the non-resident withholding issue does not arise. But corporate tax filing and the per-capita inhabitant tax that applies even at a loss arise separately. Confirm the estimate and the advantage with a tax accountant.

Q. Is a tax agent needed even under company holding?
A. Where the non-resident personally needs to file and pay tax in Japan, a tax agent is required under Article 117 of the Act on General Rules for National Taxes. Where company holding makes the rent the company's income and the person need not file in Japan, this issue shifts to the company's filing. Confirm the individual case with a tax accountant.

Sources (primary)

• e-Gov "所得税法" (Income Tax Act) — Act No. 33 of 1965. Art. 161 (1) item 7, consideration for the lease of real estate located in Japan as domestic source income; Art. 212 (1), withholding obligation on payment to a non-resident; Art. 213 (1), withholding rate of 20%. Accessed 5 September 2026.
• e-Gov "所得税法施行令" (Order for Enforcement of the Income Tax Act) — Cabinet Order No. 96 of 1965. Art. 328, rent paid by an individual who leased land, a house and the like for the residence of that individual or a relative is not subject to withholding. Accessed 5 September 2026.
• NTA Tax Answer No. 2880, "When you pay rent for real estate to a non-resident" — scope of withholding, the exception for a residence of the individual or a relative, the 20.42% rate, and payment by the 10th of the following month. Based on laws and regulations as at 1 April 2025. Accessed 5 September 2026.
• e-Gov "国税通則法" (Act on General Rules for National Taxes) — Act No. 66 of 1962. Art. 117 (1), tax agent for a person with no domicile or residence in Japan; (2), notification on appointing a tax agent. Accessed 5 September 2026.

Whether withholding applies and at what rate, and whether company or individual holding is more advantageous, depend on the scale of the rent, the tenant's attributes, the application of a tax treaty, and the person's residence and living situation. This article does not assess any individual tax position. The final judgment on the holding scheme (company or individual) and the comparison of tax amounts belong to a licensed tax accountant; the registration of the asset-management company to a judicial scrivener; residence status and documents for public authorities to an administrative scrivener. We confine ourselves to information on acquiring and managing the property.

This article is general information. It does not advise on or guarantee any individual tax or investment decision. Property investigation, brokerage and sale or lease contracts are undertaken by Yotsuba Real Estate Co., Ltd. (licensed real estate agent); the preparation of documents for submission to public authorities is undertaken by Yotsuba Administrative Scrivener Office — two independent business entities, engaged separately. Tax belongs to a licensed tax accountant, registration to a judicial scrivener, disputes to an attorney. We neither pay nor accept referral fees.

About the author

Joji Uramatsu — licensed real estate transaction specialist (Tokyo Governor registration No. 293544) and administrative scrivener (registration No. 25087022). Representative Director, Yotsuba Real Estate Co., Ltd. (licensed real estate agent, Tokyo Governor (1) No. 113304); principal, Yotsuba Administrative Scrivener Office. Kohinata, Bunkyo, Tokyo, about five minutes' walk from Myogadani station. Property and paperwork are put on the same table. Full profile: author page.