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Set up company in Japan

Japan company set up

Kabushiki Kaisha & Godo Kaisha

When setting up a company in Japan, foreign investors typically choose between two structures: Kabushiki Kaisha (KK, Joint-Stock Company) or Godo Kaisha (GK, Limited Liability Company).

The incorporation process involves several steps: company name approval, notarization of the articles of incorporation, capital deposit, registration with the Legal Affairs Bureau, and tax filings.

For foreign representatives managing the company in Japan, a Business Manager Visa is required. This visa generally requires either a capital investment of at least JPY 5 million or the employment of two or more local staff members.

Once established, your company must comply with Japan’s tax regulations, including corporate tax, consumption tax, and local taxes. With Inter Area’s specialized advisory services, you can streamline the setup process, minimize regulatory risks, and confidently expand into the Japanese market.

I.Advantages of Establishing a Company in Japan.

Advantages of Establishing a Company in Japan

As the world’s third-largest economy, Japan offers a stable market environment and a well-established legal framework, making it an ideal location for foreign investors to set up a business. Foreign investors can own 100% of shares when establishing a Kabushiki Kaisha (Joint-Stock Company) or Godo Kaisha (Limited Liability Company), with a transparent and open registration process. The Japanese government actively promotes foreign investment by providing support such as startup visas, financial subsidies, and tax incentives. Establishing a company in Japan enhances brand credibility and financing potential, while leveraging Japan’s advanced technological capabilities and vast consumer market as a strategic base for expanding business across Asia and the world.

Ⅱ.What Types of Companies Exist in Japan?

What Types of Companies Exist in Japan?

When establishing a company in Japan, the Companies Act classifies companies into two main categories: Kabushiki Kaisha (Joint-Stock Company) and Mochibun Kaisha (Membership Company).The Mochibun Kaisha category further includes three types: Godo Kaisha (Limited Liability Company), Goshi Kaisha (Limited Partnership Company), and Gomei Kaisha (General Partnership Company).
In practice, foreign investors generally prefer to establish either a Kabushiki Kaisha (KK) or a Godo Kaisha (GK), as these structures offer simpler procedures and greater flexibility in management.
The following provides an overview of the four types of companies that can be established in Japan:

Kabushiki Kaisha
(Limited by Share Ltd)

A joint-stock company raises capital from investors (shareholders) by issuing “shares” and has the institutional characteristics of “separation of investors and managers.” Shareholders contribute capital with limited liability, and the company’s operations are managed by a management team including directors, with profits distributed to shareholders in proportion to their shares. Although there is a systemic distinction between investment and management roles, in practice in small and medium-sized enterprises, the roles of “shareholder” and “director” are often held by the same person, and it is legal and feasible for them to have both investment and management functions.

Minimum capital:At least 1 Japanese Yen
Number of funders:1 person or more.
Tenure of directors:2 years in principle, up to 10 years.
A board of directors and a supervisory body may be established (flexible governance).
Transfer of capital contribution: free in principle.
Shares may be issued.
Can be converted into a joint stock company or contract company.
Profits and losses are distributed based on the amount of capital contributed.
Advantages: High trust/wide range of tax-saving options.
Disadvantages: Social insurance premiums are relatively high.

Godo Kaisha
(Limited Liability Company)

A contract company is a type of company that combines the roles of “investor” and “manager”. The investor is the “member” and does not need to “select directors through shareholders’ meetings” like a joint-stock company. The members are the managers and have a high degree of management participation rights. Every member has equal voting rights in business decisions, and important resolutions must be passed at a general meeting with the attendance and unanimous consent of all members. In a company’s general meeting, where important management matters are decided, no decision can be made without the attendance and approval of all members.

Minimum capital:At least 1 Japanese Yen
Number of funders:1 person or more.
Tenure of directors:Indefinitely.
Transfer of capital contribution: must obtain consent from all investors.
Shares may be issued.
The company name cannot be changed to a joint stock company or a contract company.
Provision is made in the articles of association for the distribution of profits and losses.
Advantages: Lower establishment costs.
Disadvantages: Low popularity in Japan.

Goshi Kaisha

AIn a Goshi Kaisha, there must be both unlimited liability partners and limited liability partners.
In simple terms, some members bear unlimited liability for the company’s debts, while others are liable only up to the amount of their capital contribution.

Minimum capital:At least 1 Japanese Yen
Number of funders: At least two — one unlimited liability partner and one limited liability partner
Tenure of directors:No fixed term.
Transfer of capital contribution:Requires consent from all members.
Shares cannot be issued
Provision is made in the articles of association for the distribution of profits and losses.
Advantages:Articles of Incorporation can be freely customized.
Disadvantages: Rarely used and has low public recognition.

Gomei Kaisha

In a Gomei Kaisha, all members (investors) are general partners who bear unlimited and joint liability for the company’s debts. In addition to contributing capital, partners are directly involved in managing the company’s operations. Therefore, ownership and management are completely unified, as all investors also serve as managers.

Minimum capital:At least 1 Japanese Yen
Number of funders:1 person or more.
Tenure of directors:No fixed term.
Transfer of capital contribution: Requires consent from all partners.
Shares cannot be issued
The company name cannot be changed to a joint stock company or a contract company.
Provision is made in the articles of association for the distribution of profits and losses.
Advantages:High flexibility in profit distribution.
Disadvantages:All partners bear unlimited liability, resulting in higher risk.

Ⅲ I.What documents are required to establish a company in Japan?

What’s needed to register a company in Japan?

When setting up a company in Japan, whether you choose a Kabushiki Kaisha (KK) or a Godo Kaisha (GK), you must prepare a complete set of basic information and documents in advance that comply with the provisions of the Company Law. This information will be used to write the articles of association, apply for registration, open a bank account, and ensure the company establishment process goes smoothly.

The basics of set up a company need to confirm the following information:

Confirm Company Type

Determining Registered Capital

Number And Identities Of Shareholders And Directors

Club Name (Company Name / Trade Name)

Business Objectives

Company Location

Confirm company type
Confirm the type to be registered, such as joint-stock companies or limited liability companies.

Club name (company name/trade name)
Basically, you are free to decide the name. However, it is necessary to confirm in advance that there is no similar business name with the Legal Affairs Bureau under the jurisdiction of the company’s location. When deciding on a “business name”, don’t just check the “Company Law”. Attention should also be paid to the Anti-Unfair Competition Law. (1).Japanese characters (hiragana, katakana, kanji). (2).English letters (uppercase or lowercase A~Z). (3).Arabic numerals.

Determining Registered Capital
When establishing a company in Japan, one key decision is the amount of registered capital. While the legal minimum is only JPY 1, in practice it is advisable to set at least JPY 1 million, and the capital must be fully paid in. The capital amount represents the company’s credibility and basic financial strength to external parties. For startups, it is often a key factor evaluated by business partners and financial institutions.
1.A Business Manager Visa requires a minimum capital of JPY 5 million.
2.Certain licensed industries may impose specific capital requirements—please confirm in advance.

Number and identities of shareholders and directors
When establishing a company in Japan, the following positions are typically designated:
1. Incorporator (Shareholder): At least one is required. Shareholders must provide identification documents such as a passport or residence card. If the shareholder is a corporate entity, additional authentication by the local embassy is required.
2.Director (Torishimariyaku): At least one representative director must be appointed. It is also advisable to have a local director, as this can facilitate the process of opening a corporate bank account in Japan.
3.Statutory Auditor (Kansayaku): Not always required. Under the Japanese Companies Act, the appointment of an auditor becomes mandatory only if a company establishes a board of directors or has stated capital exceeding 500 million yen.

Business objectives
When establishing a company, the business purposes must be clearly stated. Even activities not to be conducted immediately may be included in advance. It is common practice to add a clause in the Articles of Incorporation such as “all businesses related or incidental to the above,” in order to maintain flexibility.

Company location
The registered address must be specified down to the city, ward, town, or village level, and it cannot be solely a residential property (especially when applying for a Business Manager Visa). If renting, please review the lease agreement carefully to confirm that there is no clause stating “no company use.” The registered address in the Articles of Incorporation must include the smallest administrative division. When applying for a visa, the address must be for non-residential use.

Confirm company type
Confirm the type to be registered, such as joint-stock companies or limited liability companies.

Club name (company name/trade name)
Basically, you are free to decide the name. However, it is necessary to confirm in advance that there is no similar business name with the Legal Affairs Bureau under the jurisdiction of the company’s location. When deciding on a “business name”, don’t just check the “Company Law”. Attention should also be paid to the Anti-Unfair Competition Law. (1).Japanese characters (hiragana, katakana, kanji). (2).English letters (uppercase or lowercase A~Z). (3).Arabic numerals.

Determining Registered Capital
When establishing a company in Japan, one key decision is the amount of registered capital. While the legal minimum is only JPY 1, in practice it is advisable to set at least JPY 1 million, and the capital must be fully paid in. The capital amount represents the company’s credibility and basic financial strength to external parties. For startups, it is often a key factor evaluated by business partners and financial institutions.
1.A Business Manager Visa requires a minimum capital of JPY 5 million.
2.Certain licensed industries may impose specific capital requirements—please confirm in advance.

Number and identities of shareholders and directors
When establishing a company in Japan, the following positions are typically designated:
1. Incorporator (Shareholder): At least one is required. Shareholders must provide identification documents such as a passport or residence card. If the shareholder is a corporate entity, additional authentication by the local embassy is required.
2.Director (Torishimariyaku): At least one representative director must be appointed. It is also advisable to have a local director, as this can facilitate the process of opening a corporate bank account in Japan.
3.Statutory Auditor (Kansayaku): Not always required. Under the Japanese Companies Act, the appointment of an auditor becomes mandatory only if a company establishes a board of directors or has stated capital exceeding 500 million yen.

Business objectives
When establishing a company, the business purposes must be clearly stated. Even activities not to be conducted immediately may be included in advance. It is common practice to add a clause in the Articles of Incorporation such as “all businesses related or incidental to the above,” in order to maintain flexibility.

Company location
The registered address must be specified down to the city, ward, town, or village level, and it cannot be solely a residential property (especially when applying for a Business Manager Visa). If renting, please review the lease agreement carefully to confirm that there is no clause stating “no company use.” The registered address in the Articles of Incorporation must include the smallest administrative division. When applying for a visa, the address must be for non-residential use.

Ⅳ.Japanese company setup procedure

Japanese company
set up procedure

In Japan, foreign investors may independently register a company. However, when a foreign national wishes to operate as a sole proprietor, they must meet the same conditions required for company establishment.

The general procedures for setting up a company are as follows:

1.Confirm Basic Incorporation Details (Investment Information).

2.Articles of Incorporation Certification
Prepare and certify the Articles of Incorporation. After drafting, the Articles, along with seals or signature certificates, must be notarized by the local notary office.

3.Capital Injection
Once the Articles are certified, the capital must be paid in. The funds should be remitted by the incorporator from abroad into a local Japanese bank account.

4.Submission to the Legal Affairs Bureau
Submit the final registration application along with the required documents. The necessary documents vary depending on the company type, but generally include: registration application, corporate seals, Articles of Incorporation, resolutions, director consents, identity verification, and proof of capital contribution.

5.Notification/Report to the National Tax Agency
After registration with the Legal Affairs Bureau, notify the National Tax Agency with jurisdiction over the company’s registered office. This step is critical, as the company will be subject to various taxes after incorporation.

6.Notification to Prefectural and Municipal Tax Offices
Following notification to the National Tax Agency, the company must also notify the relevant prefectural tax office and municipal government office.

7.Customs Registration (if applicable)
If the company plans to engage in import/export activities, it must register with Japan Customs as an importer/exporter. While most general goods can be traded, certain products (e.g., pharmaceuticals, cosmetics) require prior approval or licenses.

Ⅴ.Opening a Corporate Bank Account in Japan

Opening a Corporate
Bank Account in Japan

Before submitting the company registration application to the Legal Affairs Bureau, the capital must first be deposited into a Japanese bank account. However, foreign shareholders usually do not have a personal bank account in Japan, while the law requires that capital be deposited prior to incorporation. Possible solutions include:

Opening a Japanese Personal Account: Through partner banks (typically foreign-owned banks), it may be possible to open an account. In practice, it is very difficult for non-residents to open personal accounts with major Japanese domestic banks.
Using a Third-Party Account: The capital can be remitted to a trusted third-party in Japan (e.g., a Japanese individual or an administrative scrivener), who will then issue a certificate of capital contribution.
Establishing a Joint Venture: A Japanese national can act as a co-founder, receive the capital contribution, and issue proof. After incorporation, shareholding arrangements can be adjusted accordingly.

Once the certified company registry is obtained from the Legal Affairs Bureau, the company may proceed to open its corporate bank account. However, for foreign-invested companies, the process tends to be stricter and more complex than for domestic Japanese companies. Generally, the following banking options are available:

Japanese Domestic Banks: (e.g.,Mizuho Bank, MUFG Bank) Foreign-owned companies face stricter screening. Banks typically require a detailed business plan and proof of commercial transactions. It is also difficult for a foreign representative to open an account without a Japan-based director or representative.
Internet Banks (e.g., Rakuten Bank, SBI Sumishin Net Bank): These accounts are generally only available to representatives with Japanese residency status. It is challenging for foreign-invested companies to apply directly.
Foreign Banks in Japan (e.g., Taiwan-owned banks): For example, Bank of Taiwan operates in Japan and can be a favorable option for foreign companies (especially Taiwanese businesses). Compared to Japanese domestic banks, they are generally more flexible and foreigner-friendly.

Ⅵ.Basic corporate tax in Japan

Basic corporate
tax in Japan

In Japan, taxes are broadly divided into national taxes (levied by the central government) and local taxes (levied by prefectural and municipal governments). The major corporate tax categories are as follows:

Corporate Tax

Local Corporation Tax

Enterprise Tax

Prefectural tax collection

Inhabitant Tax

Tax collection by prefectures, cities, towns and villages

GST

Pay plus value tax system

This is a national tax, essentially corporate income tax, based on a progressive tax rate. All sources of corporate income are taxable.

• Net profit below 8 million yen 15%

• Net profit exceeding 8 million yen 23.2%

Large Enterprises (capital
over 100 million yen):

Although categorized as a national tax, it is calculated as an additional surcharge on corporate tax. This is an additional tax levied based on the corporate tax amount, classified as a local tax. Tax Calculation: Corporate Tax × 10.3%.

• Net profit below 8 million yen 1.55%

• Net profit exceeding 8 million yen 2.39%

Levied by prefectural governments, based on corporate income. Tax rates vary depending on income level, approximately 3.4%–7%.

• Net profit below 4 million yen 3.5%

• Net profit between 4 mil and 8 mil yen 5.3%

• Net profit exceeding 8 million yen 7%

A local tax imposed by both prefectural and municipal governments. It consists of two components:
Corporate Tax Levy: approx. 10% of the corporate tax liability.
Per Capita Levy: a fixed amount based on company size, minimum JPY 70,000, payable by all companies (even those without profit). For companies incorporated less than one year, the tax is prorated monthly. Rates vary by locality.

Japan applies a value-added tax system. The current rate is 10% (8% for certain goods such as food and beverages).
Exemption: Start-ups are exempt during their first two fiscal years if their capital is below JPY 10 million and the prior year’s sales do not exceed JPY 10 million. However, tax liability arises even within the first two years if:

• Taxable sales in the first six months exceed JPY 10 million.

• Payroll expenses in the first six months exceed JPY 10 million.

Note: Since consumption tax is collected from consumers, companies must remit it regardless of whether they operate at a profit or a loss.

The above are all the various tax rates in Japan. A detailed introduction to each tax rate is provided below.

Levied by prefectural governments, based on corporate income. Tax rates vary depending on income level, approximately 3.4%–7%.This is a local tax levied to support prefectural public services, with rates varying by region. Tax Calculation: Enterprise Tax = Income × Enterprise Tax Rate Rates (Tokyo Example):
• Net profit below 4 million yen: 3.5%.
• Net profit between 4 million and 8 million yen: 5.3%.
• Net profit exceeding 8 million yen: 7%. Only payable if the company generates profit.

Japan applies a value-added tax system. The current rate is 10% (8% for certain goods such as food and beverages).
Exemption: Start-ups are exempt during their first two fiscal years if their capital is below JPY 10 million and the prior year’s sales do not exceed JPY 10 million. However, tax liability arises even within the first two years if:
• (1).Taxable sales in the first half of the year exceed 10 million yen.
• (2).Total wages paid in the first half exceed 10 million yen.

Note: Since consumption tax is collected from consumers, companies must remit it regardless of whether they operate at a profit or a loss.

The main corporate tax burden in Japan is composed of: National Taxes: (Corporate Tax + Local Corporation Tax)+Local Taxes: (Inhabitant Tax + Enterprise Tax).In practice, the effective corporate tax rate for most companies is approximately 30%–35%.

Ⅶ.Application for Business Manager Visa

Application for
Business Manager Visa

When a foreign national establishes a company in Japan and assumes an executive or managerial role, obtaining the appropriate residency status becomes a critical consideration. To obtain this visa, applicants must meet certain eligibility requirements.According to the latest amendment announced by the Ministry of Justice of Japan, some provisions concerning the “Business Manager” residence status have been revised, and the new regulations will take effect on October 16, 2025.

For further details, you may refer to the official information on the

Ⅷ.Post-Incorporation Compliance in Japan

Post-Incorporation Compliance in Japan

Ⅸ.Conclusion

Conclusion

Is registering a company in Japan difficult?
In terms of company registration itself, the process is not particularly complicated, though the required documents and procedures can be detailed. For foreign investors, the greatest challenges often lie not in the registration procedure itself, but rather in securing a business address, opening a bank account, and obtaining residency status (if necessary).

We recommend working with an experienced service provider who can offer up-to-date guidance on Japanese company registration, allowing you to focus your time and resources on other, more critical aspects of your business.

With extensive practical experience and a strong client service orientation, Inter Area integrates international business service resources to provide you with a seamless experience throughout the entire process of establishing a company in Japan. Contact us to learn more about how to register your business in Japan, and our dedicated service team will respond to you in the shortest possible time.

Japan Company Set up Q&A

Q1.Set up a Japan company

Q2.Office address

Q3.Insurance & tax obligations

Q4.Bank Account

Q1.Set up a Japan company

Q2.Office address

Q3.Insurance & tax obligations

Q4.Bank Account

Japan company
set up Q&A

Q1. How long does it take to set up a Japan company?

A:The time required to set up a company in Japan usually depends on the type of company and the completeness of document preparation. Generally, the process of setting up a company (KK) takes about 1-2 months, and opening a bank account requires an additional few weeks to complete.

Q2. Do you need a physical office address to set up your company?

A:When setting up a company in Japan, you need to provide a registered address. This address does not have to be a physical office; a virtual office address can also be used as a registered company address, but must comply with local regulations.

Q3. What insurance and tax obligations should be considered when hiring employees after establishing a company in Japan?

A:Once an employee officially joins the company, the employer must promptly enroll them in the statutory social insurance programs, including health insurance, employees’ pension insurance, employment insurance, and workers’ accident compensation insurance. These procedures must be completed within five days of the employee’s start date.
In terms of taxation, the company is required to submit a “Salary Payment Office Notification” to the local tax office within two months of incorporation and follow the proper payroll tax filing requirements thereafter.

Q4. Is Opening a Corporate Bank Account in Japan Challenging for Foreign Companies?

A:Opening a corporate bank account in Japan can be difficult for foreign-owned companies. Banks conduct strict KYC checks, including business activities, office location, Japanese address proof, the representative’s ID, and the ultimate beneficial owner.
Required documents typically include the Certificate of Registered Matters, Articles of Incorporation, seal certificate, director’s ID, business plan, and lease agreement.
Even with complete documents, approval may be difficult without a local Japanese partner. Using a professional service or choosing a bank familiar with foreign clients is recommended.