Japan company formation for non-residents

Why foreign founders set up in Japan

Japan is a large, high-income market where customers and partners often prefer to contract with a local company. A Japanese entity lets you sign local contracts, hire staff, lease an office and invoice in yen.

It is a market-entry choice, not a tax choice. Corporate tax is at the higher end for Asia, and compliance is detailed. Founders form here because the customers, distributors or engineers are here.

KK or GK: which entity fits

The Kabushiki Kaisha (KK) is a joint-stock company. It issues shares, suits outside investors and is the name most Japanese counterparties know. Its articles must be notarised by a Japanese notary before registration.

The Godo Kaisha (GK) is modelled on the US LLC. Members own it directly, it needs no notarised articles and its minimum registration tax is lower. Many foreign groups use a GK for a wholly owned subsidiary.

Both have limited liability and pay the same corporate taxes. A GK can later convert into a KK if you raise outside equity.

• KK: 1 or more directors, notarised articles, shares, director terms up to 2 years (up to 10 for non-public KKs)
• GK: 1 or more members, no notary, no fixed term for executive members
• Both: registered at the Legal Affairs Bureau; the filing date is the date of establishment

Directors, capital and the address in Japan

Since 16 March 2015 a KK or GK can register without any representative who lives in Japan. A single director or member is enough. Overseas directors prove their signature with a certificate from their home authorities or a notarised affidavit.

Legal minimum capital is JPY 1. Real projects need more, because capital pays set-up costs and banks look at it. If you plan to live in Japan on a Business Manager status of residence, the rules from 16 October 2025 require capital or investment of at least JPY 30,000,000 and at least one full-time employee. You or a full-time staff member also need Japanese language ability, and you need 3 years of management experience or a relevant postgraduate degree.

The company needs a head office address in Japan for registration. Some addresses are acceptable for registration but not for a visa application, so tell us your plans early.

How registration works

We confirm the entity type, trade name, business purposes, capital and address. You pass KYC and sign the documents. For a KK, the articles go to a Japanese notary. Capital is then paid into a designated bank account and evidenced for the filing.

A licensed judicial scrivener files the registration with the Legal Affairs Bureau. The filing date becomes the company's date of establishment. Registration is usually complete within a few business days, and the whole process takes 2–4 weeks after KYC approval.

After registration the company notifies the tax office and local tax authorities. If a foreign investor holds the shares, a report under the Foreign Exchange and Foreign Trade Act may be due to the Bank of Japan. Some sectors need prior notice before the investment.

Tax, social insurance and annual compliance

National corporate tax is 23.2%. Smaller companies pay a reduced rate on their first JPY 8,000,000 of income. Local inhabitant tax and enterprise tax come on top, so most profitable companies face a combined effective rate of about 30% (confirm with your specialist).

Corporate tax returns are generally due within 2 months after the financial year-end, with extensions available in some cases. Consumption tax registration depends on turnover and on whether the company issues qualified invoices.

A KK must publish its balance sheet each year and re-register directors when their terms end. Any change to registered details, such as address or officers, is generally filed within 2 weeks. Only large companies need an accounting auditor.

A Japanese company must enrol in health insurance and employees' pension insurance once it pays a salary, even if the only person paid is the representative director. Employees are also covered by employment insurance and workers' accident insurance.

Contributions are shared between the company and the employee and are a real cost on top of salary. Budget for them before you set directors' pay, and check them with a Japanese payroll or labour and social security specialist.

Bank accounts and common mistakes

Opening a corporate account is often the slowest step. Japanese banks decide, and they look closely at new companies run from abroad. A resident representative, a real office and a clear business plan all help.

We introduce you to suitable banks or EMIs and prepare the application. The bank makes the final decision, so plan your first months of payments with that in mind.

The most common mistake is forming a company first and thinking about the visa later. If you plan to live in Japan, the capital, office and staffing choices you make at registration decide whether a Business Manager application can succeed.

The second is underestimating the bank account. Without an account the company cannot pay rent or salaries, so start the bank conversation as soon as the company is registered.

The third is missing a filing after a change. Directors' terms, address moves and capital increases all need a registration at the Legal Affairs Bureau, and late filings can lead to fines for the representative director.

What OCC handles and what it costs

Our Japan package starts at US$3,299 for year 1 with government fees included, and US$1,320 from year 2. We coordinate the articles, notarisation for a KK, the Legal Affairs Bureau filing and post-registration notices with local licensed professionals.

OCC is licensed in Hong Kong as a trust or company service provider (TCSP TC001305). Filings that Japanese law reserves for licensed judicial scriveners, tax accountants or immigration lawyers are prepared through local licensed professionals, and we tell you when that applies.