Setting Up a Company in Japan

Updated for 2025 by Wiktoria Pawluczuk to reflect the latest insights and developments.

Can a foreigner start a business in Japan? Yes! Japan offers a supportive ecosystem, streamlined incorporation process, and government incentives for foreign entrepreneurs. The country’s commitment to globalization makes it an attractive place to start a business.

Setting up a company in Japan is easier than you might think, with plenty of resources, step-by-step guides, and government assistance available. Foreign businesses also benefit from tax incentives and subsidies, making Japan a great market for expansion.

This article will guide you through the process to help you successfully establish your business in Japan.

KK vs. GK: Which Business Structure is Right for You?

When starting a company in Japan, you’ll choose between two main structures:

1. Kabushiki Kaisha (K.K.) – 株式会社

• The most recognized business structure in Japan.
• While traditionally expensive, recent reforms have made it more affordable, similar to a G.K.
• Requires notarization and more formal setup but adds credibility—useful for getting investors, loans, and larger clients.
• Best if you’re planning to scale, seek investment, or build a strong corporate reputation.

2. Godo Kaisha (G.K.) – 合同会社

• Japan’s LLC equivalent—simpler and more flexible.
• Cheaper and faster to register (no notarization required).
• Management is more relaxed, but G.K. has less prestige than K.K., which can be a disadvantage in business negotiations.
• Ideal for small businesses, startups, or those who don’t need outside investment.

Cost of incorporating between a G.K. and a K.K.

The cost of incorporating a Godo Kaisha (G.K.) and a Kabushiki Kaisha (K.K.) varies due to differences in registration fees, legal requirements, and administrative procedures.

Additional Costs Not Included

• Business Manager Visa Requirements: If you need a Business Manager Visa, you must invest at least ¥5 million in company capital.
• Visa Application Costs: Applying for a Business Manager Visa can add ¥50,000–¥150,000 in professional fees, depending on legal assistance.

While a G.K. is the cheaper option, a K.K. offers greater credibility, which may be important for long-term growth and investment opportunities.

What are the Visa and Residence Requirements for Setting Up a Company in Japan?

Navigating Japan’s business landscape, particularly understanding visa and residence requirements, can be complex. This section offers a concise guide to help you be confident in setting up a company in Japan.

Acquiring the Business Manager Visa

The Business Manager Visa is required for foreign nationals who want to start and operate a company in Japan without a long-term visa.

Key Requirements

• Capital Investment: A minimum of ¥5 million OR hiring two full-time local employees (subject to immigration discretion).
• Office Space: A dedicated office with a lock and nameplate; shared or home offices are not accepted.
• Active Business Operations: The company must have a clear business plan, ongoing transactions, and proper management structure.

Important Considerations

• You can legally incorporate a company without a visa, but you cannot operate the business in Japan without the Business Manager Visa.
• Immigration officers have discretion over approvals, so meeting the minimum requirements doesn’t always guarantee success.

Alternatives If You Don’t Qualify for a Business Manager Visa

• Partner with a Japanese Co-Founder: A Japanese national or resident can act as the legal representative while you apply for another visa.
• Apply for Another Visa Type: Some visas allow you to start and run a business without the strict Business Manager Visa requirements:
  • J-Find Visa – For highly educated foreign professionals who want to start a business in Japan.
  • High-Skill Visa – Designed for professionals in tech, finance, or academia with a points-based system. This visa can lead to permanent residency faster.

For a full guide on the application process, read our article on How to get a business manager visa.

Acquiring a Startup Visa

The Startup Visa is a temporary residency program designed to attract innovative foreign entrepreneurs. Unlike the Business Manager Visa, it does not immediately grant Business Manager status but provides 6 to 12 months for entrepreneurs to set up their business in Japan.

During this period, visa holders must meet the necessary requirements to transition to a Business Manager Visa, including:

• Investing at least 5 million yen,
• Securing a physical office space,
• Hiring at least two full-time employees (if applicable).

The Startup Visa is available in select cities like Tokyo, Fukuoka, and Osaka, offering foreign entrepreneurs a structured path to launch their businesses. However, it is essential to prepare in advance, as failure to meet the conditions within the timeframe may require leaving Japan.

Local governments, rather than national authorities, offer this flexible visa program. To qualify, you need to submit a new business implementation plan demonstrating that your business idea can contribute significantly to Japan’s economy. If the local government approves your plan, you are then eligible to apply for the Startup Visa. Check out this list of startup-friendly cities.

Can I Open a Company in Japan as a Non-resident?

Yes, a non-resident can register a company in Japan, but there are important limitations to consider.

What You Can Do as a Non-Resident:

• Register a business – You can incorporate a Kabushiki Kaisha (KK) or Godo Kaisha (GK) without a visa or Japanese address.
• Own shares in a Japanese company – Foreigners can be company shareholders without living in Japan.
• Appoint a Japanese resident director – A KK must have at least one resident director, while a GK requires a resident representative (which can be a foreigner with a valid visa).

What You Cannot Do as a Non-Resident:

• Open a corporate bank account before having a resident director – Most Japanese banks require at least one company director to be a Japan resident.
• Legally operate the business without a valid visa – If you plan to run the company yourself in Japan, you must apply for a Business Manager Visa or another suitable visa.
• Sign contracts as a company representative – Without a Business Manager Visa or residency status, you may need a Japanese co-director to handle legal agreements.

Workarounds for Non-Residents

If you’re a non-resident wanting to set up and operate a company in Japan, you can:

• Partner with a Japanese resident who can serve as the initial director.
• Apply for a Business Manager Visa after company registration.
• Use a professional service (e.g., legal consultants or accounting firms) to assist with registration and bank setup.

Different Options for Setting Up a Company in Japan

Alternatively, if you are a non-resident interested in setting up a company in Japan, you have various options to consider. The right choice depends on your specific needs and goals.

Representative Office

A Representative Office, offering an easy establishment process, can conduct market research, information collection, or advertising. However, it’s not permitted for sales or profit-oriented activities.

Key Features

• No registration required with the Legal Affairs Bureau.
• No corporate tax obligations since it doesn’t generate revenue.
• Can hire local staff, but salary payments must be managed from the parent company abroad.
• Limited banking options, as corporate accounts may not be available.

Who Should Consider a Representative Office?

• Foreign businesses exploring the Japanese market before full entry.
• Companies that need a local presence for research, networking, or promotions without engaging in sales.

If you plan to conduct commercial activities, you may need to establish a Branch Office, Godo Kaisha (G.K.), or Kabushiki Kaisha (K.K.) instead.

Branch Office

A Branch Office allows profit-making operations and can lease property and open bank accounts under its name. But it’s not a separate legal entity, with the parent company accountable for its liabilities.

Key Features

• Can engage in sales, sign contracts, and generate revenue.
• Requires registration with the Legal Affairs Bureau.
• Must appoint a resident representative in Japan.
• Liabilities and financial obligations fall on the parent company.

Who Should Consider a Branch Office?

• Foreign companies that want a local presence without forming a separate entity.
• Businesses looking to test the Japanese market before full incorporation.

For companies seeking limited liability and independent legal status, establishing a Kabushiki Kaisha (K.K.) or Godo Kaisha (G.K.) may be a better option.

Subsidiary Company

A Subsidiary Company is an independent legal entity, ideal for limiting the parent company’s liability. As mentioned before, there are three types of subsidiaries when setting up a company in Japan: Kabushiki Kaisha (joint-stock corporation), Godo Kaisha (LLC), and Gomei Kaisha (general partnership), each with unique regulations regarding capital, liability, and management.

It is worth noting again that the Godo Kaisha structure, similar to an LLC, has gained popularity among multinational corporations like Google and Apple due to its flexible management and operational provisions. By adopting the G.K. model as these companies have done, businesses can effectively navigate the dynamic business environment in Japan, securing their growth and expansion in this globally significant market.

What are the Tax Requirements?

When setting up a company in Japan, familiarizing yourself with the tax requirements is just as essential as learning about the visa and residence requirements to do business in this country.

Type of Company and Taxation

In Japan, just like many other countries, the type of business you set up directly affects the kind of taxes you’ll be obligated to pay. The selection between different business structures, including sole proprietorships, partnerships, and corporations, brings along specific tax implications that must be factored in during the planning stage.

For instance, corporations in Japan are subject to a series of taxes – corporate tax, inhabitant tax, and enterprise tax. The rates for these taxes hinge on various variables, such as the size and location of your business. 

On the other hand, if you’re operating as a sole proprietorship or a partnership, the tax landscape changes. The taxation for these business structures is more intertwined with personal income tax rather than corporate tax. This distinction underscores the importance of aligning your business plan with the most suitable structure. Potential business owners are recommended to explore our resources on business tax reduction in Japan.

What is the Overall Process of Setting Up a Company in Japan?

Setting up a company in Japan follows a structured and straightforward process. Here’s a step-by-step summary of what to expect:

1. Drafting the Articles of Incorporation (Teikan – 定款)
   Prepare this legal document outlining your company’s structure, purpose, officials, and registered business address. If needed, get it notarized (required for K.K.).
2. Filing for Business Registration
   Submit the notarized (if applicable) Articles of Incorporation to the Legal Affairs Bureau (法務局). The registration process typically takes 2 to 4 weeks.
3. Depositing Capital
   Transfer the initial capital into the representative director’s personal bank account and keep proof of deposit. This is required for company registration.
4. Opening a Corporate Bank Account (Post-Incorporation Step)
   Once your company is officially registered, you can set up a corporate bank account to manage business finances and transactions.
5. Obtaining Necessary Licenses and Permits
   Certain industries require specific licenses or permits before operations can begin, so check the legal requirements for your sector.

This step-by-step approach provides a clear roadmap for setting up your business in Japan. Now, let’s dive deeper into each step to ensure a smooth and successful incorporation process.

Setting Up a Company Step-by-step

Step 1: Define Key Business Details

Before setting up your business in Japan, you need to establish essential details to ensure a smooth registration process. Here’s what you need to prepare:

1. Choose a Business Structure

Decide between:

• Kabushiki Kaisha (K.K.) – A corporation offering credibility, ideal for larger businesses and those seeking investment.
• Godo Kaisha (G.K.) – A simpler, lower-cost option similar to an LLC, suitable for startups and small businesses.

2. Select a Unique Company Name

• Your company name must comply with Japanese regulations and be unique.
• Check name availability on the Corporate Number Publication Site.

3. Define Your Business Purpose

• Clearly outline your company’s activities as this will be included in your official registration.
• If required, prepare a business plan (2 to 4 weeks)—especially important for visa applications and bank approvals.

4. Secure a Japanese Address & Phone Number

• Your business needs a registered office address in Japan. Options include:
  • Physical office (best for credibility)
  • Virtual office (allowed for registration, but not for visas)
  • Home address (if permitted by your landlord)
• A Japanese phone number is also required for official documents and bank registration.

5. Decide on a Head Office Location

• Choose the official address where your business will be legally registered.
• If you need help with office space, check our guide on renting offices in Japan.

6. Determine Your Initial Capital

• You can legally register with as little as 1 yen, but a higher amount improves credibility with banks and partners.
• If applying for a Business Manager Visa, you must deposit at least 5 million yen.

7. Set Key Company Dates

• Establishment Date – The date your company will be officially registered.
• Fiscal Year – The standard fiscal year in Japan is April 1 to March 31, but you can select a different period based on your needs.

8. Appoint Directors & Shareholders

• Define roles and responsibilities to ensure smooth management.
• K.K.: Requires at least one director.
• G.K.: Needs at least one member (owner), who can also act as the representative.

Step 2: Create a Company Seal

In Japan, a company seal (Hanko or Inkan) is required for official business transactions, including company registration, contracts, and banking. There are several types of company seals, each serving a different purpose. 

Registered Seal (Jitsuin / 実印)

• Purpose: Serves as the official company seal for legal and corporate identification.
• Registration: Must be registered with the Legal Affairs Bureau (法務局).
• Usage: Required for company registration, legal contracts, and financial transactions.

Bank Seal (Ginko-in / 銀行印)

• Purpose: Required to open a corporate bank account and authorize financial transactions.
• Registration: Registered directly with the bank at account setup.
• Usage: Needed for deposits, withdrawals, loan agreements, and other banking transactions.

Company Seal (Kaisha-in / 会社印)

A general-purpose stamp used for day-to-day operations, such as invoicing and internal documents. No official registration is required, unlike the Jitsuin or Ginko-in. Commonly used for non-legal documents but not valid for official contracts or banking.

Representative Seal (Daihyosha-in / 代表者印)

• Purpose: Used by the company representative (e.g., president or CEO) for signing official contracts and important documents.
• Registration: Must be registered with the Legal Affairs Bureau (法務局) during company incorporation.
• Usage: Required for legal agreements, tax filings, and major financial transactions.
• Duration: approx. 3 business days

How to Get a Company Seal

You can purchase company seals from the following sources:

• ​​Hanko Shops (はんこ屋) – Specialized stores found in most cities 
• Online Seal Makers – Platforms like Hanko.com, InkanShop, or Rakuten Hanko Stores offer custom engraving and delivery.
• Department Stores & Stationery Shops – Retailers like Loft, Tokyu Hands, and Ito-Yokado provide professional hanko-making services.
• Local Print & Stamp Shops – Small businesses in business districts that offer custom Hanko engraving.

Make sure the seal meets the Legal Affairs Bureau (法務局) or bank requirements if needed.

Step 3: Draft Articles of Incorporation (Teikan / 定款)

The document must outline the company name, business objectives, head office address, capital amount, fiscal year, and details of directors and shareholders. For official registration it has to be written in japaneseIt. 

Copies Needed: Print and bind three copies:

1. For notarization (required for K.K. companies).
2. For submission to the Legal Affairs Bureau.
3. For company records.

Notarization Requirement: If establishing a Kabushiki Kaisha (K.K.), the Articles must be notarized at a Notary Office (公証役場) before submission. This step is not required for a Godo Kaisha (G.K.).

Step 4: Notarize Articles of Incorporation

Articles of Incorporation serve as the constitution of a corporation, outlining its purpose, internal structure, and activities. They can exist as written or electronic documents that formally establish company rules.

For certain companies, such as a Kabushiki Kaisha (K.K.), the Articles must be notarized by a notary public attached to the Legal Affairs Bureau before they are legally recognized. However, any changes made after company registration do not require notarization.

Notarization Fees

• Notarization Fee: 50,000 yen (excluding the cost of a certified copy).
• Stamp Duty: 40,000 yen (additional cost).

Duration: approx. 3 business days

Check out our detailed article for a full breakdown of registration fees, office costs, visa requirements, and more.

Step 5: Deposit Capital

Use the Representative Director’s Personal Bank Account.  Since the company does not yet have a corporate bank account, the initial capital must be deposited into the representative director’s personal account.

• Deposit the Full Capital Amount: Ensure the amount matches what is stated in the Articles of Incorporation.
• Keep Proof of Deposit: Retain a copy of the bankbook (通帳/Tsūchō) showing the transaction or an official bank statement as proof.
• Include Required Details: The bank document should clearly display the deposit amount, account holder’s name, and transaction date, as this will be submitted during company registration.

Once the company is officially registered, you can transfer the funds into a corporate bank account under the company’s name. Transferring investment money to a bank account takes approx. 1 to 3 business days.

Step 6: Register the Company

To officially establish your company in Japan, submit the required documents to the Legal Affairs Bureau (法務局). Preparation and sealing documents for registration of incorporation takes approx. 1 to 3 business days.

Required Documents

1. Application Form (設立登記申請書) – The official company registration application.
2. Notarized Articles of Incorporation (定款 / Teikan) – If registering a Kabushiki Kaisha (K.K.), this must be notarized.
3. Directors’ and Shareholders’ Consent Forms – Signed documents confirming their acceptance of positions.
4. Proof of Capital Deposit – A bankbook copy or bank statement showing the capital transfer to the representative director’s account.
5. Company Seal (Hanko) Registration Form (印鑑届書 / Inkan Todokesho) – Required to register the official company seal (Jitsuin).
6. Registration Fee – Typically paid via revenue stamps (印紙 / Inshi), costing:
   • K.K.: ¥150,000
   • G.K.: ¥60,000

Submission Process

• Submit the documents in person at the Legal Affairs Bureau (法務局) that oversees your company’s registered address.
• Processing Time: Registration usually takes 1 to 2 weeks.
• Once completed, your company is officially incorporated and can begin operations.

Step 7: Open a Business Bank account

While you can initially operate using a personal bank account, a corporate bank account is essential for long-term growth, tax compliance, and financial credibility.

Requirements to Open a Corporate Bank Account

To open a business account in Japan, you typically need:

• Company registration certificate (登記事項証明書) issued by the Legal Affairs Bureau (takes approx. 7 days after registration submission).
• Registered Company Seal (Inkan) – Official seal used for banking and legal documents.
• Business plan or proof of business activities, depending on the bank.
• Japanese resident director, as some banks require at least one resident officer.
• Office lease contract to verify a physical business address.

Best Banks for Business Accounts

Traditional banks like Mitsubishi UFJ, Mizuho*, and Sumitomo Mitsui* offer credibility but have stricter requirements. SBI Shinsei Bank, Rakuten Bank, and PayPay Bank are more accessible for foreign entrepreneurs.

For a detailed guide on opening a business bank account, check out our step-by-step tutorial or book a free consultation with SmartStart Japan for expert assistance.

Japanese only*

How Much Does It Cost to Set Up a Company in Japan?

Setting up a company in Japan involves structured and transparent costs, covering legal documentation, registration, and compliance. Here’s a breakdown of the key expenses:

• Notarization of Articles of Incorporation: ¥50,000 – Required for Kabushiki Kaisha (K.K.), ensuring legal validity.
• Company Seal Registration & Creation: ¥25,000 – Covers the cost of creating and registering the official company seal (Inkan).
• Incorporation Registration Fee: ¥150,000 – Paid to the Legal Affairs Bureau to officially register your company.

These costs are essential to ensure your business is fully compliant and legally established in Japan.

Where Can I Get Professional Help When Setting Up a Company in Japan?

Foreign entrepreneurs setting up a company in Japan often face a complex landscape of business rules and cultural nuances. Thankfully, professional assistance, ranging from government-backed initiatives to private service providers, can guide you through this intricate process, ensuring your venture’s seamless setup and success.

Government-Backed Aid: TOSBEC

As part of the Japanese government’s efforts to encourage foreign investment, the Tokyo One-Stop Business Establishment Center (TOSBEC) has been established. 

TOSBEC, a joint initiative by the Japanese government and Tokyo Metropolitan Government, helps foreign companies start or expand in Tokyo.

• Free Expert Consultations: Get guidance on legal procedures, financial regulations, market research, and business culture.
• Multilingual Support: Interpretation and translation services are available.

TOSBEC makes it easier for entrepreneurs to navigate Japan’s business environment.

Back Office Specialist Companies

If you’re an established company looking to move quickly, a back office specialist can streamline the process. They help with faster bank account setup, company registration, accounting, tax compliance, payroll, and other operations. With deep expertise in Japan’s business landscape, they provide tailored solutions so you can focus on growing your business and serving customers.

If you are looking for a company, we can introduce one to you based on your company size and needs from low-tier to high-tier service providers. You can reach out to us using the form below.

Local City Resources

Apart from these nationwide initiatives, local resources can also play a crucial role in setting up a company in Japan. Numerous Japanese cities, including Shibuya, Sapporo, Fukuoka, and Aichi, boast startup centers committed to nurturing new ventures. These centers provide a myriad of resources and services to guide you through the process of setting up a company in Japan. 

For instance, Fukuoka City’s initiative towards nurturing startups offers a wealth of insights and support. For more information, you can listen to our podcast episode: Japanese Startup Cities with Akiko Nakagawa from Fukuoka GSC.

Are There Any Subsidies For Setting up a Company in Japan?

Japan’s dedication to a diverse business environment has resulted in numerous subsidy programs to attract foreign investment. Let’s explore these financial incentives:

Tokyo’s Special Ward Business Establishment Subsidy Program

The Tokyo Special Ward Business Establishment Subsidy Program provides financial assistance for setting up a company in Japan, specifically, businesses looking to operate in Tokyo’s special wards. It primarily targets SMEs and specific sectors, offering financial support to cover establishment costs.

JETRO’s Investment Promotion Programs

The Japan External Trade Organization (JETRO) is another invaluable source of financial support for foreign companies. ​​JETRO’s Investment Promotion Programs encourage foreign direct investment in Japan. These subsidy programs cover various sectors and stages of a company’s life cycle, providing comprehensive support.

Regional Incentives

Several regional governments in Japan offer their own incentives, including subsidies, tax breaks, and preferential rent agreements for companies investing in priority sectors, reducing initial setup and operational costs.

What are Some Potential Legal Changes Coming to Setting Up A Company in Japan?

Staying updated on potential legal changes is critical for businesses planning to set up in Japan. Here are some possible legal modifications to keep in mind:

Revising Tax Laws 

Possible revisions to Japan’s tax laws could include altered corporate tax rates or more tax incentives for foreign-owned startups. Even though these changes haven’t been formally announced, being aware of them can aid strategic planning.

As of February 2025, several legal changes are underway in Japan that could impact the process of setting up a company:

1. Streamlined Registration for Foreign Lawyers

In July 2024, Japan’s Ministry of Justice introduced measures to simplify the registration process for foreign lawyers. Law firms can now reuse certain employer-related documents for multiple applications, and previously registered foreign lawyers need only submit a simplified statement of past approvals. These changes reduce administrative burdens and may facilitate quicker establishment of legal entities involving foreign legal professionals. 

2. Enhanced Scrutiny of Foreign Investments

In January 2025, Japan’s finance ministry proposed tightening reporting requirements under the Foreign Exchange and Foreign Trade Act. The new regulations mandate prior notifications from all foreign investors potentially collaborating with foreign governments in intelligence activities when acquiring a 1% or greater stake in firms critical to national security. This change aims to safeguard sensitive industries and could affect foreign entities planning to establish or invest in companies within these sectors. 

3. Corporate Tax Reforms

The 2025 tax reform proposals, announced in December 2024, include significant changes to corporate taxation. Notably, the introduction of a Special Defense Corporate Tax (SDCT) is proposed, which may impact foreign-headquartered companies conducting business in Japan. These reforms are expected to be enacted by March 2025, and businesses should prepare for potential adjustments in their tax obligations. 

These developments reflect Japan’s ongoing efforts to balance openness to foreign investment with national security considerations and fiscal policy adjustments. Entities planning to establish operations in Japan should stay informed about these changes to ensure compliance and strategic alignment.

Final Thoughts

Starting a company in Japan as a foreigner is entirely achievable, thanks to clear regulations, business-friendly initiatives, and extensive support. While the process can be complex, resources like consulting agencies, startup centers, and government programs simplify each step. With the right knowledge and assistance, entering Japan’s vibrant market can be a highly rewarding endeavor.

For more detailed guidance on setting up a company in Japan, consider referring to The Mipro’s Guide to Starting a Business in Japan and more resources by Scaling Your Company!

If you’re seeking personalized guidance and referrals for setting up a company in Japan, we’re here to assist. Connect with us through our contact form to access expert advice tailored to your unique needs. Your journey towards establishing a successful business in Japan starts with the right support – let us help you every step of the way.