Company Registration in Japan

Japan, the world’s third-largest economy, is a global hub of innovation, technology, and trade. With a stable political climate, strong legal framework, and access to a highly educated workforce, Japan is an attractive destination for foreign investors looking to establish a presence in Asia.

Registering a company in Japan provides access to both the domestic market and international business opportunities. Japan offers various business structures suited to foreign entrepreneurs, from subsidiaries and branches to limited liability companies.

Types of Business Entities for Company Registration in Japan

Japan offers several legal structures for establishing a business, each suited to different ownership models, liability preferences, and investment strategies. Here are the primary types:

 1. Kabushiki Kaisha (KK) – Joint Stock Company

• Most common and prestigious structure in Japan.

• Requires at least one director and one shareholder.

• Ideal for medium to large businesses.

• Suitable for foreign companies seeking credibility and long-term operations.

• Can issue shares to raise capital.

 2. Godo Kaisha (GK) – Limited Liability Company

• Similar to a U.S. LLC.

• More flexible and simpler to manage than a KK.

• Ideal for startups and small to medium enterprises.

• Owned by members who have limited liability.

• No requirement to issue shares.

 3. Branch Office

• An extension of a foreign parent company.

• Not a separate legal entity.

• Liabilities are borne by the parent company.

• Must appoint a representative in Japan.

• Simpler tax and accounting procedures.

 4. Representative Office

• Can only engage in non-transactional operations (e.g., market research, liaison work).

• Cannot conduct commercial activities or generate revenue.

• No need to register with the Legal Affairs Bureau but must notify the Bank of Japan.

Eligibility Criteria for Company Registration in Japan

To register a company in Japan, both foreign and local entrepreneurs must meet specific legal and procedural requirements. These criteria vary slightly depending on the business structure, but the general conditions include:

 1. Minimum Number of Directors and Shareholders

• Kabushiki Kaisha (KK):

  • At least one director and one shareholder (individual or corporate, can be the same person).

  • Japanese residency is not mandatory for directors, but having a local representative can simplify procedures.

• Godo Kaisha (GK):

  • At least one member (individual or entity).

  • A representative member must be appointed to manage operations.

 2. Registered Office Address in Japan

• A physical office address in Japan is mandatory for all types of entities.

• This can be a rented commercial office or a virtual office (depending on the business type).

 3. Capital Requirements

• No minimum capital required by law for KK or GK.

• Recommended starting capital: JPY 1 to JPY 5,000,000 for smoother bank account opening and visa applications.

 4. Visa/Residency Requirements (For Foreign Directors)

• While local residency is not mandatory, a business manager visa may be required if the foreign entrepreneur plans to reside and operate in Japan.

 5. Articles of Incorporation

• Must be drafted and notarized (for KK) in Japanese.

• Should include details like company name, address, business objectives, and capital.

Procedure for Company Registration in Japan

Setting up a company in Japan involves several legal and administrative steps. Here is a step-by-step outline of the registration process for the most common business entities: Kabushiki Kaisha (KK) and Godo Kaisha (GK).

 1. Choose Business Structure and Name

• Decide between KK, GK, Branch, or Representative Office.

• Select a unique company name (in Japanese or Roman letters).

• Conduct a name check to avoid duplication.

 2. Draft and Notarize Articles of Incorporation

• Mandatory for Kabushiki Kaisha (KK) – must be notarized.

• GK does not require notarization.

• Articles should state business objectives, location, capital, and directors.

 3. Deposit Capital

• Open a temporary bank account in the founder’s name and deposit the capital.

• Proof of deposit (bank statement or letter) is required for registration.

 4. Register Company with Legal Affairs Bureau

• Submit necessary documents including:

  • Articles of Incorporation

  • Capital deposit certificate

  • Director’s consent

  • Personal seal certificates (inkan)

• The company gets officially registered, and a corporate registration certificate is issued.

 5. Obtain Company Seal and Register It

• Create an official company seal (hanko).

• Register the seal at the Legal Affairs Bureau.

 6. Open a Corporate Bank Account

• With registration and seal in hand, apply for a permanent business bank account in Japan.

 7. Tax and Social Insurance Registration

• Notify the Tax Office, Pension Office, and Labor Standards Office.

• Apply for social insurance, withholding tax, and employee registration (if applicable).

Various Taxes Applicable to Registered Companies in Japan

Registered companies in Japan are subject to several national and local taxes. Understanding these obligations is crucial for compliance and financial planning.

 1. Corporate Income Tax

• Standard national corporate tax rate:

  • 23.2% on taxable income for most companies.

• Small and medium-sized enterprises (SMEs) may be eligible for reduced rates on income up to JPY 8 million.

 2. Local Corporate Taxes

In addition to the national corporate tax, businesses pay several local taxes:

• Inhabitant Tax (Corporate Resident Tax): 5–12% of corporate tax liability.

• Enterprise Tax: Progressive rates from 3.5% to 6.7% of income.

• Local Corporate Special Tax: Additional tax on enterprise tax, gradually being phased out or integrated.

 3. Consumption Tax (VAT)

• Standard rate: 10% (applicable to goods and services).

• Businesses must register for this tax if annual revenue exceeds JPY 10 million.

• Some exemptions for small businesses apply.

 4. Withholding Tax

• Applies to dividends, interest, and royalty payments to non-residents.

• Rates vary by type of income and relevant tax treaties.

 5. Social Insurance Contributions

• Includes health insurance, pension, unemployment insurance, and worker’s compensation.

• Shared by employer and employee, with the employer typically paying the larger portion.

Documents Required for Company Registration in Japan

To legally register a company in Japan, specific documentation must be prepared and submitted to the Legal Affairs Bureau. The list may slightly vary based on the business structure (e.g., KK or GK), but the core documents include:

 1. Articles of Incorporation (定款 - Teikan)

• Must be prepared in Japanese.

• For KK, notarization is required.

• For GK, notarization is not mandatory.

 2. Affidavit or Certificate of Incorporation (For Foreign Shareholders/Entities)

• For foreign companies acting as shareholders or investors.

• Must be notarized and translated into Japanese.

 3. Directors’ and Officers’ Consent Forms

• Written consent from all appointed directors, auditors (if applicable), and representatives to accept their roles.

 4. Capital Deposit Certificate

• Proof of initial capital deposited in a temporary personal bank account.

• Issued by the bank or shown through a passbook copy.

 5. Proof of Registered Office Address

• Lease agreement or written consent from the property owner if using a virtual office or coworking space.

 6. Personal Seal Certificates (印鑑証明書 - Inkan Shomeisho)

• Required for all Japanese directors and shareholders.

• Foreign nationals residing in Japan may also obtain a seal certificate.

• If not, notarized signature certificates from the home country are acceptable.

 7. Company Seal (Hanko)

• A physical seal used for company documents and registrations.

• Required for official registration and bank account setup.

Benefits of Company Registration in Japan

Registering a company in Japan offers a wide range of strategic, operational, and financial advantages. Whether you're a startup or a multinational enterprise, establishing a legal entity in Japan can significantly boost credibility and market access.

 1. Access to a Major Global Economy

• Japan is the third-largest economy in the world, known for its innovation, technology, and strong consumer base.

• Ideal for businesses targeting both Asian and global markets.

 2. High Legal and Financial Transparency

• Japan offers a stable political environment and a robust legal system.

• Business operations are governed by well-defined laws that protect both local and foreign investors.

 3. No Minimum Capital Requirement

• Flexible capital requirements make it easier for startups and small businesses to enter the Japanese market.

 4. Skilled Workforce

• Japan boasts a highly educated and disciplined workforce, especially strong in engineering, manufacturing, and IT sectors.

 5. Strong Infrastructure and Technology

• One of the most technologically advanced countries with excellent transport, telecom, and digital infrastructure.

 6. International Reputation and Business Credibility

• Having a registered company in Japan enhances your global credibility and brand image, especially in B2B markets.

 7. Eligibility for Business Manager Visa

• Company registration can support the application for a Business Manager Visa, allowing foreign owners to live and work in Japan legally.

Why Choose YKG GLOBAL for Company Registration in Japan?

At YKG GLOBAL, we simplify the complex process of company formation in Japan—making it smooth, secure, and stress-free for entrepreneurs and businesses worldwide. Here's why our clients trust us:

 1. Japan-Specific Expertise

• Our team deeply understands Japan’s legal, administrative, and regulatory systems, ensuring every detail is handled with precision.

 2. End-to-End Support

• From business structure selection to post-registration compliance, we provide comprehensive assistance throughout the journey.

 3. Documentation & Translation Services

• We manage Japanese-language documentation, including Articles of Incorporation and contracts, so you don’t have to worry about the language barrier.

 4. Local Representation & Office Setup

• Need a registered address, virtual office, or nominee director? We offer customizable packages to meet Japanese registration requirements.

 5. Visa & Immigration Guidance

• Our visa consultants assist with Business Manager Visa and immigration compliance—key for foreign investors wishing to settle in Japan.

 6. Accounting & Tax Compliance

• Stay compliant with Japanese tax laws and corporate obligations with our accounting, payroll, and tax filing services.

 7. Global Reach, Local Focus

• Whether you're expanding into Japan or starting fresh, YKG GLOBAL provides a one-stop global business solution with a local execution model.