Incorporation of Company in Japan

How to Start a Company in Japan: Step-by-Step Guide for Foreign Companies 2025?

Do you happen to be a foreigner looking to try your hand in a Japanese venture? It's a good choice since Japan presents a simple integration process due to its friendly ecosystem and dedication to globalization.

Initiatives to make the integration of Japanese enterprises by foreign businesses and entrepreneurs has been taken care of by the government. It is eager to increase its foreign direct investments (FDIs). Business formation in Japan might seem a little intimidating at first. But with knowledge of the legal and formalities involved by law and country officialdom and country business culture, it will be a cakewalk. Proper guidance will remove the obstacles and an entity will be successfully formed in Japan.

Business Opportunities in Japan

Investors interested in doing business in Japan as non-residents can look at these sectors. Being a country full of innovation, it has all the needs for successful business establishment. Some of the lucrative areas of business in Japan are enumerated below:

• Green Technology, Sustainability, and Energy
• Tech-related and IT Startups, including Digital Technology
• Manufacturing
• Biotechnology and Healthcare
• Consulting Services

Types of Business Structures in Japan

Before you go ahead to understand how to setup a business in Japan, you must understand the different types of business legal structures that are available in Japan:

• Limited Liability Company (Godo Kaisha)

Godo Kaisha, is a Japanese expression for limited liability company. It is like an LLC in the US. The company is liberal and charge low registration fees, and therefore small firms prefer it.

• Stock Company (Kabushiki Kaisha)

Stock Company is the most common business structure in Japan. This structure needs board of directors and shareholders. It is preferred by large and established companies.

• Branch Offices

Foreign business companies who want to expand their business in Japan can open branch offices there. These offices can conduct business, open bank accounts, and rent offices independently.

• Representative Offices

It is setup with an aim to conduct research & liaison activities in Japan and it cannot participate in commercial operations.

• Time Period & Structure

The time period to establish an entity in Japan is around 2-3 months and the most common legal structure is Limited Liability Company (Godo Kaisha) and Stock Company (Kabushiki Kaisha). The table below depicts the difference between both of them:

Features	Kabushiki Kaisha (KK)	Godo Kaisha (GK)
Equity Holder	Shareholders (“Kabu-nushi”)	Members of the company (“Shain”)
Liability	Limited Liability	Limited Liability
Decision-making Body	General meeting of shareholders	Meeting of members
Authority Person	Director	Non-shareholders can also be appointed as Directors
Term of Office	1-2 years for Directors, 3-4 years for Auditor	No specified term
Management Structure	Board of Directors	Members
Voting Rights	No. of proportionate shares held by each shareholder	One vote for each member (changes subject to Articles of Association)
Statement of Financial	Publication Required	Publication not Required
Distribution of Profits	Proportionate basis	Proportionate basis
Requirement of Minimum Capital	1 Yen	1 Yen
Incorporation Cost	¥250,000 approximately	¥100,000 approximately

Step-By-Step Company Registration Process

If you are a foreigner and you want to start a business in Japan, then the following is a step-by-step company registration process.

1. Selecting an appropriate company name: Ensure that the company name is unique and not already registered. Spelling out the name in Japanese characters would be a good idea.

Choice of the name is vital in company incorporation in Japan. For selecting a Japanese business name, remember cultural sensitivities. Japanese culture revolves around respect, tradition, and harmony. The company name should never misinterpret or disrespect these things. Keep the company name unique and no company is registered using it. One should abstain from trademark infringement or to have complicated names.

2. Articles of Incorporation drafting: Draft the Articles of Incorporation, including the company name, objectives, and details about directors and shareholders.

3. Submission of documents: Preparation of documents so as to submit it with Legal Affairs Bureau.

4. Capital value depositing: A Bank account is opened to initially deposit the nominal capital amount.

5. Registration of a company: Provide the certificate of deposit of capital, Articles of Incorporation, and other related documents to Legal Affairs Bureau for registration.

6. Create a company seal: Be sure to design a company seal and get it register. This shall be used on all official documents.

7. Bank account opening: On completion of registration, open a permanent account for all the business dealings.

8. Acquisition of necessary business licenses: The entrepreneur must have the necessary permits and licenses to conduct business in Japan. They can be obtained after company registration.

9. Notify the tax office: Inform the tax office and other tax agencies for taxation purposes.

Documentation Required

• Registration application: This application provides the principal objects and general items of the business. Make sure a Japanese copy of the application is submitted.
• Articles of Incorporation: Articles of Incorporation disclose the business's different rules and regulations.
• Certificate of paid-in capital: This certificate is used to state that the business has paid the capital amount.
• Letter of Acceptance of Assumption of Office: This certificate is used to state that a company director has been appointed.
• List of directors, shareholders, and addresses. Additionally, it is not required to have a representative director in Japan for Japanese company incorporation. In the event that you do not have a representative director and are not living in Japan, you can still become a director by having a business investor visa.
• Valid Passport
• Director/Founder Certificate of Seal Registration: Non-residents who are exempted from having a certificate of seal registration must present a certificate of signature.
• Seal Registration Certificate: The company's official seal is registered with the Legal Affairs Bureau via this certificate.
• Business Plan and details of business activities.

Government Support for Foreign Companies

Japanese businessmen who want to set up a company in Japan as foreign nationals are well supported by the Japanese government. Prospective business individuals and investors are given various kinds of grants and incentives:

• JETRO Support: Financial assistance and foreign business guidance services are facilitated by the Japan External Trade Organization (JETRO). Financial assistance includes reductions in office rent leasing and workers' wages, which can be utilized by businessmen to cover preliminary setup costs.
• Local Government Grants: Certain states' governments of Japan offer quite interesting grants like subsidies, tax relief, and other incentives for foreign entrepreneurs as well as investors.
• Subsidies to Innovative Projects: Subsidies and financial assistance are offered to innovative enterprises or ventures that conduct research or innovative technologies.
• Industry-Specific Government Schemes: Industry-specific government schemes are available for foreign investors. Schemes are available to assist business houses that offer rebates to setup expenses.
• Special Zones: Companies operating in special zones are offered tax benefits, assistance, and simplified regulatory processes.

How SKMC Global Can Help?

If you are planning to start a new business venture in Japan, you must prepare. You must conduct some research, get to know market demands and trends, and study the business situation in Japan. Incorporation of a company in Japan is a tedious & complicated process as it must be conducted in Japanese. SKMC has a team of dedicated professionals and has a presence in India as well in Japan. We have a comprehensive knowledge of Japanese laws & regulations. With the help of our experts, we help clients in understanding the business environment of Japan and setting up of business in Japan. Accordingly, establishing a Japanese company with the help of right partner becomes easy. SKMC Global offers tailored end to end solutions which suits the needs of a client to set up a company in Japan.