REGISTER COMPANY IN JAPAN

Preface: Japan company registration becomes a streamlined process with Fionza Consultants by your side, allowing you to focus your time and resources on more critical business aspects. Our efficient approach and experienced team ensure a seamless Japan business setup experience, with the ultimate aim of enabling you to start operating your Japan-based company within the specified timeframe.

Our comprehensive service package covers all the essentials for your Japan company registration:

Count on Fionza Consultants to simplify the Japan company registration process,allowing you to establish your business in Japan swiftly and efficiently.

HOW LONG DOES IT TAKE TO ESTABLISH A JAPANESE COMPANY AND OPEN JAPANESE CORPORATE BANK ACCOUNT?

Fionza Consultants offers a streamlined and efficient Japan company registration service that can be completed entirely within 3 weeks. Our process starts once we receive the necessary due diligence documents from the directors and shareholders of your prospective company. Our expert team will check the availability of your desired company name and diligently prepare all necessary incorporation documents.

What sets us apart is that you won’t need to make any trips to Japan; the entire registration process can be conveniently handled remotely. Once Fionza Consultants has successfully set up your Japan company, you can anticipate receiving essential documents, including the certificate of formation, Memorandum and Articles of Association, as well as the register of directors and shareholders. Please note that these documents will be in Japanese, but if you prefer, we can provide translations into your preferred language.

Within just 4 weeks of your company’s registration, Fionza Consultants will proceed to open a corporate account with a well-established local or international bank. This means your Japan company will be fully operational and prepared for business within a total of 7 weeks from the time you engage our services.

For those seeking detailed insights into our Japan company registration process and the comprehensive services we offer, Fionza Consultants has prepared a comprehensive step-by-step guide. Contact us today to learn more and take the first step toward establishing your presence in Japan.

CAN FOREIGNERS REGISTER A COMPANY IN JAPAN?

Japan welcomes foreign entrepreneurs to establish businesses within its borders with minimal requirements. While there is no mandate that company directors must be Japanese citizens, Fionza Consultants recommends designating a local representative director proficient in Japanese. This ensures effective communication with local banks for the seamless opening of corporate bank accounts.

As per the Japan Registry Office guidelines, the essential prerequisites for forming a Japan Limited Company include:

Minimum of one shareholder, regardless of nationality.

Minimum of one director, regardless of nationality.

Appointment of one company secretary.

Possession of a registered office address within Japan.

No specific minimum capital requirement.

TYPES OF COMPANIES IN JAPAN

When choosing the right company structure in Japan, it’s crucial to consider factors such as personal liability protection, tax implications, ownership and management flexibility, and compliance requirements. Fionza Consultants takes a comprehensive approach to understanding your business needs before recommending the most suitable company type in Japan. Factors we consider include the nature of your business activities, corporate tax responsibilities, and the nationalities of shareholders and directors. Our consultants also provide detailed information on the setup requirements for these entities.

1.Japan Limited Company (Godo Kaisha)

The Japan Limited Company, known as Godo Kaisha or limited liability company, is ideal for investors with limited capital. Registering a Godo Kaisha separates you legally from your company, protecting you from personal liability for the company’s debts. Requirements include one director and one shareholder of any nationality, as well as a local registered address. While not mandatory, we recommend appointing a Japanese nominee director during registration, especially for bank account approval.

2.Joint Stock Company(Kabushi Kaisha)

Kabushi Kaisha, a Joint Stock Company, is favored by larger businesses as it allows for gathering investments through stock options and convertible bonds. Shareholder liability is limited to the value of their shares. Setting up a Kabushi Kaisha requires a local registered address and a Japanese bank account for capital deposits. The law does not specify a minimum share capital, and representative director nomination is no longer necessary after 2016 amendments.

3.General Partnership (Gomei Kaisha)

Similar to a general partnership, a Gomei Kaisha involves partners directly representing the company and bearing its liabilities. Corporate shareholders cannot establish a Gomei Kaisha. There’s no minimum capital requirement, and management is simplified due to the absence of shareholders’ accountability.

4.Limited Partenership (Goshi Kaisha)

A Goshi Kaisha, or limited partnership, is like a Gomei Kaisha but with two tiers of partners: general and limited partners. General partners are fully liable, while limited partners are only liable for their contributed capital and may not be involved in management to avoid higher liability.

5.Representative Office (Chuzaiin jimusho)

Representative offices are supplementary to foreign companies and are useful for exploring the Japanese market. They can conduct market surveys and promote the foreign parent company’s business but cannot engage in domestic sales. All agreements are signed by the foreign parent company, which is fully liable for the representative office.

6.Branch Office (Shiten)

Setting up a branch office is the simplest way to expand a foreign business presence in Japan. While the parent company remains responsible for debts and obligations, the Japanese branch office can open bank accounts and lease real estate in its name. The requirement for a local Japanese representative is no longer necessary.

7.Sole Proprietorship (Kojin Jigyo)

Sole Proprietorship is the most straightforward business structure, where there is no legal separation between the owner and the entity. This simplicity can lead to personal liability for the owner in case of winding up. Sole Proprietors report business income under their individual federal tax returns. It’s suitable for small businesses where the owner desires easy startup and full control.

To establish a Sole Proprietorship, you must have a work visa, Long-Term Resident visa, Permanent Resident visa, or be the Spouse of a Permanent Resident visa or Japanese National visa.

HOW TO REGISTER COMPANY IN JAPAN?

Step 1: Choose the Right Business Structure

Before diving into company registration in Japan, it’s essential to select the most suitable business structure for your needs. Fionza Consultants takes the time to understand your business model thoroughly and recommend the optimal structure. While we discussed various business structures earlier, we generally recommend either a Japan Limited Company (Godo Kaisha, GK) or a Joint Stock Company (Kabushi Kaisha, KK) due to their balance of continuity and liability protection.

Step 2: Decide Between GK and KK

Comparatively, a GK is more cost-effective and quicker to incorporate, offering flexible profit-sharing. However, a KK may be more suitable if you plan to collaborate with Japanese companies or issue shares in the future. The KK is a well-established and credible company structure, while the GK was introduced in 2006. Importantly, you can convert between these structures after the initial registration.

Step 3: Name Reservation

Next, you should decide on essential details such as your company’s objectives and name. Ensure the chosen name is not vulgar, misleading, or similar to existing trademarks or company names. Fionza Consultants can help you conduct a Japan company registration number search to confirm name uniqueness and prevent delays during incorporation.

Step 4: Prepare and Notarize Supporting Documents

Prepare crucial documents, starting with the articles of incorporation (notarization is required for KK). This document should outline the company’s key details, including organizational structure and internal control regulations. Additionally, gather documents such as proof of capital deposit, notification of the company’s seal, and a letter of agreement from directors (notarized for foreign directors). Submit these documents to the Japanese Legal Affairs Bureau (Homukyoku).

Step 5: Paid-Up Capital and Corporate Bank Account

While the minimum paid-up capital is just 1 yen, this may not be practical for business operations and opening a corporate bank account with Japanese banks. To simplify the process, consider temporarily appointing a Japanese resident director to facilitate capital deposit and bank account opening. Fionza Consultants can assist in opening local or international corporate bank accounts.

Step 6: Financial Reporting and Shareholders’ Meetings

Expect the approval process to take around three weeks. Once approved, you will receive your 13-digit Japan company business registration number and certificate of company registration. Proceed to register the company and director’s seals. Our experts will assist in preparing annual financial reports based on the accepted standards for annual fiscal year reporting, which must be presented at shareholders’ meetings each fiscal year.

Step 7: Tax Registration

Register your company for taxes using your Japan company tax registration number. Notify the National Tax Agency about your office’s salary payments and municipal authorities for local inhabitant and enterprise tax. This tax number will be the same as your business registration number. Keep in mind that the effective tax rate, considering national corporate tax and local inhabitant tax, will be at least 30% for Japanese corporations with share capital exceeding JPY 100 million.

Step 8: Apply for Visas and Licenses

If required, apply for additional licenses like a cryptocurrency license. Companies seeking to actively manage their Japanese operations may apply for an Investor/Business Manager Visa, which necessitates a physical office address and a minimum paid-up capital of JPY 5 million (around US$45,000). Additionally, make necessary notifications to labor standards, public employment security, and pensions offices regarding employment rules and insurance policies.

Feel free to contact us to learn more about your Japanese accounting and tax obligations.

IS JAPAN A GOOD PLACE TO START A BUSINESS?

Political

In Transparency International’s 2020 Corruption Perceptions Index, Japan holds the 19th rank out of 180 countries, indicating relatively low levels of public sector corruption.

According to the 2021 World Press Freedom Index, Japan is placed 67th among 180 countries in terms of press freedom.

Japan passed a national law in May 2018 to promote equal representation of male and female political candidates during elections, signaling its commitment to women’s rights.

Economic

Japan boasts the world’s third-largest economy, with a nominal Gross Domestic Product (GDP) of $5.15 trillion in 2019, projected to reach $5.37 trillion by 2021, according to the International Monetary Fund.

The Japanese yen derives its strength from foreign assets and currencies, making it an attractive choice for funding and investments due to its low borrowing costs.

The Japanese government has exerted pressure on employers to increase worker wages, potentially leading to higher labor costs in Japan.

Social

As per the Organisation for Economic Co-operation and Development, Japan’s unemployment rate stood at 2.9% in 2021.

Japanese is the official language of Japan, and the country ranks 55th out of 100 countries in the Education First English Proficiency Index, suggesting potential language barriers for communication.

Japan faces demographic challenges, with over 20% of its population being over 65 years old, which could impact the country’s economy due to the aging society.

Technological

The “Data Free Flow with Trust” initiative, introduced by former Japanese Prime Minister Shinzo Abe, underscores Japan’s commitment to innovation.

Japan is home to major international tech giants such as Fujifilm, Sony, Canon, and Panasonic.

The Japanese government is pursuing a vision of Society 5.0, aiming to integrate fourth industrial revolution innovations across all industries and aspects of society.

Legal

Japan’s taxation laws incorporate various tax exemption and reduction schemes to incentivize investment in the country.

Japan is a signatory to important Intellectual Property-related treaties, including the Patent Cooperation Treaty and the Paris Convention for the Protection of Industrial Property.

It’s worth noting that Japan’s judiciary is largely independent, although judges can only be removed through impeachment, which involves politicians, potentially raising concerns about judicial independence.

Environmental

A recent report by the Organisation for Economic Co-operation and Development highlights that only 1% of Japan’s municipal waste goes to landfills, a significant achievement compared to Australia’s 49%.

The Fukushima Daiichi disaster has led to environmental challenges, including ocean pollution.

Japan is highly susceptible to various natural disasters such as tsunamis, floods, typhoons, earthquakes, cyclones, and volcanic eruptions, which have had adverse effects on its economy.