How to do a football deal in Japan

Introduction of Football in Japan

Soccer in Japan has a rich and evolving history. The sport was introduced to the country in the 1870s, shortly after the founding of the Football Association in London in 1863. Initially, it was primarily played in educational institutions. The Japan Football Association (JFA) was established in 1921, further formalizing the sport’s presence in the country. The national team’s first major international success came in 1968, when they won the bronze medal at the Mexico City Olympics. This achievement helped boost football’s popularity in Japan. However, it wasn’t until the establishment of the J.League in 1993 that professional soccer truly took off in Japan. The J.League’s inception marked the beginning of a new era, bringing higher levels of play and more robust organizational structures to the sport. Japan’s national team qualified for its first FIFA World Cup in 1998 and has consistently participated in the tournament ever since. The team, known as the „Samurai Blue,“ has earned a reputation for its discipline and skill on the international stage. The success of Japanese players in European leagues has also contributed to the sport’s growth domestically. Notable players such as Hidetoshi Nakata and Makoto Hasebehave played pivotal roles in elevating the status of Japanese soccer on the global stage.

Explaining the J-League

The J.League (professional football league in Japan) is organized in a pyramidal hierarchy similar to other football leagues worldwide. Here’s how it works:

J1 League: This is the top tier of the Japanese football league system. It comprises 20 clubs and operates on a promotion and relegation system with the J2 League. The teams compete for the championship title, and the bottom three teams are relegated to J2 at the end of each season.

J2 League: The second tier of Japanese football, J2, has 20 clubs. Teams that finish at the top two of J2 are promoted to J1, while the bottom three teams are relegated to J3. This league also follows a promotion and relegation system with both the J1 and J3 leagues.

J3 League: This is the third tier and consists of 20 clubs. The top two teams in J3 can be promoted to J2, provided they meet specific licensing requirements. Similarly, the bottom teams risk relegation to the Japan Football League (JFL), which is a semi-professional league below J3.

Japan Football League: The JFL is the fourth tier and operates as the bridge between professional and amateur football in Japan. It consists of semi-professional teams, and successful clubs can gain promotion to J3, subject to meeting the league’s criteria.

This hierarchical structure ensures a competitive environment where clubs can move up or down based on their performance each season, promoting continuous development and high standards across all levels of Japanese football.

Explaining the transfer system structure

When is the J-League transfer period for 2024? The J. League has two main player registration periods: winter and summer. Starting with the 2024 season, the first registration period has been shortened and the second extended in accordance with FIFA regulations.

First Registration Period (Winter Transfer Window) is from January 22, 2024 to March 27, 2024. This is the period between winter and spring and is the most intense season in terms of player transfers. However, since the market is usually crowded from the end of the previous year’s season, there is a lot of talk about transfers from December to end of February, before the season opens.

Second registration period (summer transfer window) is from July 8, 2024 to August 21, 2024. This is the summer transfer window, during which many players transfer from Japan to other countries and reinforcements of foreign players are made. The period is also 4 weeks, so there is not that much volume in terms of transfer as winter transfer period domestically.

How long is the registration period for adding players? In addition to the above two transfer windows, there is also a case in which a player can be acquired through „additional registration“. This registration period applies to players from J1 to J3, and only applies to free transfers, goalkeepers, developmental loan deal, and academy players who meet the following conditionsuntil September 6, 2024.

Free transfer: A player whose contract will soon expire or who is free. This is a case where a player can be acquired for zero transfer fee.

Goalkeeper: Cases in which additional registration is required due to deregistration due to injury, etc.

Developmental loan deal (Transfer for a limited period for developmental purposes): Must be a Japanese national and the player must be under 23 years of age, a Japanese national, and transferring to a division below his/her own division, and the releasing club, engaging club and player must agree to the transfer.

Academy Affiliation: Players who belong to the academy are allowed to play for the team under the specially designated player system.

Explaining the financial as an international player

If a foreigner receives remuneration in Japan, he/she only needs to pay 20% withholding tax. Of course, this is because they are non-residents of Japan. However, if they are to be residents of Japan for more than two years, they are subject to the same income tax as Japanese nationals from the year of residence. There are many foreign athletes in Japanese professional sports leagues. They have been in Japan for many years but are non-residents of Japan. This is because, as a result, they are in Japan, but their contracts stipulate that they will only work for one year. In other words, the contract with their clubs is a single-year contract, not a multi-year contract. This is a tax-saving technique for foreigners. In Japan, the tax rate is 55%. This is by far the highest tax rate in the developed world, and knowing this, no one wants to be a resident of Japan. This has been the practice for decades. However, in December 2023 the Tokyo Regional Taxation Bureau has found that some soccer players have failed to file their tax returns.

The Tokyo Regional Taxation Bureau, however, has determined that foreign football players are residents of Japan. Until now, it has been customary for foreign football players to be paid by their teams as non-residents with only a 20% withholding tax, but recently the number of multi-year contracts has begun to increase as a condition for pulling them out of Europe. However, there has been an increase in the number of multi-year contracts signed as a condition for recruiting players from Europe. This time few J League clubs were pointed out by the National Tax Bureau.

Explaining international spot

The J-League’s foreign player spots was revised significantly in 2019. J-League, clubs are limited to a maximum number of registered players during the season, and for a foreign player (referred as foreign spots), there is no limit as long as the number of players is within the 25-player limit of the A-contract regulations. In other words, there is no problem under the regulations whether a team has 10 or 15 foreign players. The maximum number of foreign players allowed in the pitch for a match, including those on the bench on the match day, is five in J1 and four in J2 and J3.However, J-League partner countries (see below for details) are not considered eligible for foreign players, so in the case of J1, for example, there is no problem if there are five Brazilians and one Thai player on the lineup. J-League partner countries are the eight countries (Thailand, Vietnam, Myanmar, Cambodia, Singapore, Indonesia, and Malaysia) with which the J-League has formed partnerships for the development of Asian soccer. Currently, the J-League is actively accepting young players from the partner countries and collaborating with each country trying to raise the level of football in Asia

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