There are two type of 401k (Entity type and Personal type). In fact, Local subsidiary’s employee mainly use 401K Personal because employer does not offer any additional benefit besides basic social insurance and labor insurance in start up status in local market. Mainly big company with a certain scale use 401K entity type to pay additional money in addition to employees’ salary in Japan.
In the case of Personal Type, an employee can choose an investor company (Securities company) by themselves for a 401K Personal Type and it can be used right away. A new entity needs to get registration number for 401K which is different from the incorporation number from legal affair bureau. The first employee has to submit the documents to get the number and employer information to securities company. As for 401k Entity type, it takes almost 6 months to start it after application.
