This article is written by a Japanese local.
After foreign employees successfully open a Japanese bank account, the next major hurdle they face is “moving funds from their home country (overseas remittance).” Substantial funds are required immediately upon relocation for initial apartment costs, purchasing furniture, and living expenses until the first paycheck arrives.
However, if employees use traditional “International Wire Transfers (SWIFT)” from their home bank to their Japanese bank, they not only suffer exorbitant fees but frequently crash into Japan’s strict banking compliance walls, resulting in their funds being frozen for weeks. This article objectively explains the procedures to utilize “Wise (formerly TransferWise)”—an alternative infrastructure that completely eliminates illogical costs and time lags, allowing for the safe receipt of funds.
1. The High Costs and Fund Freezing Traps Hidden in Traditional “SWIFT Transfers”
[Summary] The international bank network (SWIFT) has opaque intermediary fees. More critically, Japanese banks require a “My Number” submission upon receipt, locking funds for long periods.
Overseas remittances through normal bank counters utilize the “SWIFT (Society for Worldwide Interbank Financial Telecommunication)” network. The biggest flaw of this system is that because the money passes through multiple correspondent banks, lifting charges are deducted, and a “hidden markup” (the bank’s profit margin) is added to the exchange rate, reducing the final amount received.
Even more serious is the “blockade upon arrival” on the Japanese side. As an Anti-Money Laundering (AML) measure, when an incoming international transfer (Hi-shimuke-sokin) arrives, Japanese financial institutions strictly require the recipient to submit their “My Number (Individual Number)” and declare the purpose of the funds.
For an employee who has just relocated, it takes 3 to 4 weeks after registering at the ward office to actually receive their My Number card (or notification document). In other words, using SWIFT creates a fatal time lag: “the Japanese bank will hold (freeze) the funds for weeks until the My Number can be physically submitted.”
2. Wise’s Domestic Transfer Mechanism for Maximum Speed and Lowest Cost
[Summary] Wise does not move money across borders. Instead, it processes “domestic transfers” from its pooled funds within each country, achieving the mid-market exchange rate and same-day delivery.
The financial technology company “Wise” logically resolved the flaws of SWIFT transfers. Wise does not actually move money across national borders.
For example, if an employee wants to send the equivalent of 100,000 JPY from an American account to a Japanese account, the employee transfers USD into “Wise’s US account” domestically. Simultaneously, “Wise’s Japanese account” transfers 100,000 JPY domestically to the Japanese bank account the employee opened.
Only the “remittance instruction data” crosses the border; the actual flow of funds is processed entirely as a “domestic bank transfer within Japan.” As a result, the mid-market rate (the real exchange rate without hidden markups) is applied, and transfers that used to take days are completed as fast as the same day or the next day.
3. Three Setup Procedures to Avoid Fund Freezes
[Summary] Because it is processed as a domestic transfer, it completely bypasses the Japanese bank’s AML freeze that demands a My Number. Accounts must be created before departure.
HR managers must guide employees through the following procedures before they leave their home country to ensure a secure route for moving initial funds.
- Step 1: Create a “Wise Account” in the home country before relocation
If they create an account after arriving in Japan, they may be required to verify a Japanese address and register a My Number. They must strictly create the account using their home country address and ID before departure, linking it to their home country bank account. - Step 2: Open a Japanese bank account after arrival
Follow the procedures outlined in previous articles to open a Japanese account at Japan Post Bank or an online bank. - Step 3: Execute the transfer to the “own Japanese account” via the Wise app
Open the Wise app, set the newly opened Japanese account as the recipient, and execute the transfer. The funds will arrive in the Japanese bank account not as an international incoming wire, but as a standard domestic transfer from “Wise Payments Japan.” This makes it possible to withdraw funds immediately without waiting to submit a My Number.
4. Practical Q&A (Troubleshooting HR Should Know)
[Summary] Answers practical questions regarding limits on large transfers and the differences when sending money outward from Japan to the home country.
Q. They want to transfer millions of yen for initial costs because they are relocating with family. Can Wise handle this?
A. While it depends on the currency and regulations of the sender’s country, as a receiving regulation in Japan, the limit for a single transfer utilizing a fund transfer service account is often set at a maximum of 1,000,000 JPY (varies by source). For large amounts exceeding 1 million JPY, they must either split the transfer into multiple transactions or switch to using traditional SWIFT transfers—accepting the time delay and conducting the receipt procedure only after their My Number arrives.
Q. Conversely, what happens when they want to send portions of their Japanese salary back to their family in their home country every month?
A. When using Wise for outward remittances from Japan to overseas, Japanese law dictates that identity verification using a “Japanese My Number” is mandatory on the Wise system (only required once). Therefore, they cannot initiate transfers from Japan until they obtain their My Number card (or a Certificate of Residence containing the My Number). Instruct them to complete My Number verification on the Wise app as soon as their ward office procedures are finished.
Conclusion: Eliminate Financial Friction with “Modern Infrastructure”
The compliance of Japanese financial institutions becomes stricter every year; the empirical rule of “we used to be able to transfer money normally” no longer applies. Having funds frozen for weeks not only threatens the employee’s livelihood but directly breeds distrust toward the company. HR managers must understand the flaws of traditional SWIFT transfers and incorporate the use of rational, highly transparent financial technology like Wise as a mandatory pre-relocation process.