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Frequently Asked Questions When Incorporating a Company in Japan

By 3 min read

Escaping the 9-5 (or later in Japan) and starting your own business is a dream held by many, but where do you start? Working at a shihoshoshi firm, I have found that there are a number of common questions which come from our international clients.

Let’s take a look at some of the most frequent.

1. What exactly is a shihoshoshi (司法書士)?

This is a branch of Japanese legal services which specialises in registration matters, both for real estate and corporations. My team’s specialty is incorporating companies and ensuring that their records are up to date with the Japanese Legal Affairs Bureau.

2. I want to make a company – what are my options and which should I choose?

Typically, Japanese companies are either a kabushiki kaisha (株式会社, or “KK”) which is a Joint Stock Company or godo kaisha (合同会社, or “GK”), which is similar to a US Limited Liability Company. Both companies have distinct characteristics and whilst we can advise you of these, the decision is ultimately up to you.

3. Is there a minimum amount of capital required for incorporation?

You can incorporate with just 1 JPY per investor.

4. Do I need to rent an office?

In principle, there is no requirement for a commercial office space. However, if you are planning to use your home as an office, you should seek the approval of your landlord if you are in rented accommodation.

5. Do I need a Japanese national or resident business partner?

There are no stipulations on nationality. Due to recent legislation changes, non-residents are also legally free to incorporate a business here. This being said, you may find certain practical matters, such as opening bank accounts, easier with a Japan resident.

6. How long will the whole process take?

Provided that you, the client, are able to provide information and executed documents promptly, incorporation usually takes around six to eight weeks.

7. What sort of taxes will I have to pay?

A Registration Tax will be liable upon incorporation, which is the larger amount of 0.7% of the initial capital and 60,000 JPY (for a GK) or 150,000 JPY (for a KK). There will also be ongoing Corporate Taxes although unfortunately we are not able to offer advice in this matter. For this, you will need to employ the services of a zeirishi (税理士, or “Tax Advisor”).

8. Do I need some sort of permit to operate my company?

This will depend on your business purposes. Common examples of companies requiring a permit include restaurants, hotels and tour operators. We can advise you on this matter when setting up the company and also assist you with obtaining the appropriate license.

9. I don’t feel comfortable signing documents which are only in Japanese. Can you still help me?

We provide an English translation of all Japanese documents as standard for our English speaking clients. Our international team members are all fluent in English, with two native speakers as the main point of contact.

10. Can I use my own business to sponsor a visa?

Yes, absolutely. Our visa specialists can help you make the most appropriate application. However, please note that there will be some additional requirements to those mentioned above.

This is by no means an exhaustive list of considerations when incorporating a new company. If you are seeking answers to more specific questions or think that you would like to move forward with your plans, contacting a shihoshoshi firm such as The Shinonome Group may be a good place to start.

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