Japan is a bustling country with a rich and beautiful culture. It also has many economic opportunities. If you have always wanted to live in Japan, then why not consider starting your own business there?
There is a long and complicated process foreign entrepreneurs in Japan must follow to start a company. In this guide, we will go over how to set up your own company in Japan if you are not currently a resident.
Japan has the third strongest economy in the world, right after the United States and China. The country also has agreements in place with several countries that promote free trade.
Japan also has some of the lowest average tariffs in the world on foreign goods. The country also has a highly educated population of discerning customers who love innovative products. And there is no shortage of hard-working and capable potential employees.
Do you have specific questions about starting a business in Japan? Browsing through qualified bilingual Advisors in Japan is one way to get to the core of your concerns.
The method for starting a business in Japan depends on several factors. The type of business you start, whether you want to live there, and whether you are starting a new business or expanding an existing one. In the next few sections, we will go over the most important aspects of starting a company in Japan.
While establishing your business in Japan, it's important to understand the best practices for hiring and compensating remote workers. For a detailed guide on navigating these aspects in the Japanese market, check out our comprehensive article on how to hire and pay remote workers in Japan.
If you’re planning on moving to Japan, the first thing you will need to do is get the right visa. If you already have a visa (like a working visa), you can use that to start your business (you will still need to transfer to a business one eventually), but if not, you will need to get a business visa.
The four-month Business Manager Visa requires your business to have an initial capital of at least 5 million Yen and have two or more employees who live in Japan. To apply, submit your passport, proof of business insurance, and several documents regarding your company to the Japanese Immigration Bureau.
This allows you to set up a bank account, get your business registered, and apply for a residence card. You will also need to secure a business space in Japan. After the visa expires, you can apply for a one-year extension.
The Startup Visa does not require you to have employees in Japan or 5 million Yen, but it is not widely available. You can only get it in select cities like Tokyo, Hiroshima, and Niigata City. The visa is valid for six months to a year, depending on where you are located. To get it, you will have to hire an administrative scrivener (gyosei shoshi), or immigration expert, to submit your paperwork for you.
You can apply for an Investor Visa from outside Japan. It can last one to five years. Whether you can renew it will depend on the success of your business. It requires your business to be pretty far along in terms of organization. Some entrepreneurs get a Business Manager Visa first and change to an Investor Visa when their company is set up. Below is a list of documents you will need to get an Investor Visa:
Receiving any of these visas can be a drawn-out process. It is best to apply for them well in advance of starting your business. In particular, the Investor Visa can take a long time to attain.
To get the Investor Visa, you have to first apply for a certificate of eligibility (COE) with the immigration office, which can take up to three months. Then, you have to trade your COE for an investor status of residence (SOR) at the Embassy of Japan, which can take another few weeks. A lot of time and effort goes into getting a work visa in Japan. Generally, the right expert can help you get through the process without making costly mistakes.
While it is possible to start a kojin jigyo (sole proprietorship), a gomei kaisha (general partnership company), or a goshi kaisha (limited partnership company), these types of companies are rare in Japan because they offer little to no liability protection for investors. The main types of businesses are kabushiki kaisha and godo kaisha.
A kabushiki kaisha (K.K.) business structure is the equivalent of a corporation. It allows a company to sell stock shares to the public. In Japan, a K.K. is by far the most common and well-known business structure. It offers business owners the greatest level of liability protection.
A godo kaisha (G.K.) is the equivalent of a limited liability company (LLC). Goudou geisha offer business owners liability protection, but they cannot sell stock shares to the public. These types of companies are new to the Japanese market.
You will need a business bank account in Japan. If you are not fluent in Japanese or well-versed in Japanese banking, open an account at a bank that makes things easier for English speakers and other foreigners like the ones listed below:
Here are a few documents you will need to open a bank account:
You can go with a short-term or long-term office rental space. Do an online search for rental spaces in the area you would like to work out of. A real estate agent can help you find the perfect spot. The leasing agent will have the expertise to navigate complicated leasing agreements and get you everything you need. For example, they will know that a koushin-ryou is a fee for renewing your contract. They will also be sure to get you a renewable rental agreement if you need one (rather than a fixed-term agreement).
Short-term office rentals have convenient lease terms that can last from one month to two years. And they may already come furnished and have their own office equipment (like computers and phone systems). They are also known as serviced office spaces and can be cost-effective options for startups and small businesses.
Long-term office rentals do not have flexible terms. You will have to sign a lease that runs from one to two years. After that time, you will be able to renew your lease with immediate effect. Long-term rentals do not come with the amenities that short-term rentals do, but they allow you to set up your office to showcase your brand.
In Japan, your articles of incorporation (or articles of association) are known as teikan. There are several things you will need in your articles of incorporation. Here are some things you will need to include in your articles of incorporation if you are starting a new company (as a foreign individual) in Japan.
You will have to have your articles of incorporation notarized at a koshonin yakuba (notary office). If you are starting a KK, you will have to have all your articles and revenue stamps notarized for around 90,000 Yen, but if you are starting a G.K., you will only have to notarize the revenue stamps for your articles for around 40,000 Yen. Revenue stamps pay for government services and can be purchased at the post office.
Owners of Japanese companies use stamps called inkans besides signatures to authorize legal documents. All the required documents in your articles of incorporation will need to be signed and stamped by all the directors and investors in your company. Here are a few other documents you will have to submit with your articles:
To protect your business name, logo, or anything else, you can attain trademarks at the Japan Patent Office. To do this yourself, you will have to maintain a permanent residence in the country. If you are not yet a permanent resident, you can enlist a patent attorney to get trademarks for your business.
Below is everything you will need to attain a trademark. These documents must be in Japanese.
You will have to pay an application fee of 12,000 Yen for one business classification and 8,600 Yen for every classification after that. Registration fees of approximately 30,000 Yen also apply, and you will have to renew your trademark after 10 years for a fee of around 40,000 Yen.
You can apply to register your business at a homukyoku (registry office). There will be an application fee that starts at 150,000 Yen for K.K. companies and 60,000 Yen for G.K. companies. This might be more depending on the size and nature of your business.
Your company registration will allow you to receive a certificate for your business’s seal and one for your business registration. You will be assigned a 13-digit corporate number by the National Tax Agency (which you will use to pay corporate taxes). Armed with these documents, you can authorize business agreements, start a business bank account, and hire employees.
If you do not plan on moving to Japan, you will need a representative director for your business who is a resident in Japan to do things like deposit your business capital. Until you get a business bank account, they will have to deposit your capital in a personal bank account under their own name, so it is vital that your representative is someone you trust.
Your business will be sending money to your home country, so you will need your bank (that handles your corporate bank account) to offer a remittance feature. Here are a few things you will need to give your bank to activate this function. Remember that all of these (including your name) must be in Japanese.
If you are opening a subsidiary company or branch office in Japan, you will still need to make deposits using your representative director’s account. You will also need a few extra documents acknowledging your foreign company in your articles of incorporation.
Besides the other information in your articles of incorporation, you will need to submit a registry certificate of the parent company and a signature of attestation from a representative of the parent company. The signature must be notarized.
Japan can be a great place to live and work — including starting a business. If you have your heart set on moving to Japan, you need the right information. Relocate is an independent marketplace for global migration where you can dig deeper into relevant topics and find qualified Advisors to help guide you through the Japanese immigration process.
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