Register A Company in Japan
Japan is a technological powerhouse in Asia and sits at the top position development-wise. Natural adversaries have been taking a toll on Japan’s development for years, but this nation has never let its spirit down and faced every obstacle with audacity and a strategic approach. Being the 4th largest economy worldwide, Japan capitalizes on sectors like automobile, and technology, finance, and electronics. It is no wonder that Japan continues to remain a productive avenue for local and global businesses. If you are eyeing Japan as your next business destination, you have a deal with various legalities, including structure selection, company registration, etc. Let’s learn how to register a company in Japan and the legalities to stay ahead of the curve.
Analyzing what makes Japan a business powerhouse
- Japan’s per capita GDP (PPP) stood at $54,184 in 2024, as per the IMF.
- It is the first nation in Asia to win the developed country status.
- Japan is poised as the 4th largest nation globally in international business of commodities since 2018.
- The consumer market in Japan sits at the 4th rank globally.
- The annual trade and international investment have barely seen a dip for years.
- The country sits on a whopping $1.4 trillion of foreign exchange reserves, helping it secure the second position globally.
- Japan ranks amongst the 3rd largest nations worldwide in the possession of financial assets amounting to $12 trillion.
- Financial assets are valued at $12 trillion, the third-largest in the world.
- Japan is the world leader in financing.
- The Tokyo Stock Exchange sits at the 5th position globally in terms of market capitalization.
- Japan has a service-led economy, amounting to nearly 70% of the GDP.
Understanding Business Structures to register a company in Japan
Before you strive to register a company in Japan, you must have a brief understanding of the following business structures:
| Business Structure | Description | Registration Compliances |
| Kabushiki Kaisha (KK) | Joint-stock company, similar to a corporation. Ideal for larger businesses. | Must register with the Legal Affairs Bureau, have at least one director, and meet capital requirements. |
| Godo Kaisha (GK) | Limited liability company, similar to an LLC. Suitable for small to medium-sized enterprises. | Must register with the Legal Affairs Bureau, have at least one representative member, and meet minimal capital requirements. |
| Goshi Kaisha | Partnership limited by shares with both limited and unlimited liability partners. | Must register with the Legal Affairs Bureau and submit articles of incorporation detailing the responsibilities of partners. |
| Gomei Kaisha | General partnership with unlimited liability for all partners. | Must register with the Legal Affairs Bureau and submit articles of incorporation. |
| Branch Office | Extension of a foreign company in Japan. | Must register with the Legal Affairs Bureau and appoint a representative in Japan. |
| Representative Office | Conducts market research and non-commercial activities. | Not required to register, but must notify the Bank of Japan and relevant authorities if engaging in certain activities. |
| Sole Proprietorship | The business operated by an individual with personal liability. | Must register with the local tax office and obtain necessary business permits. |
| Limited Liability Partnership (LLP) | Flexible partnership with limited liability for all partners. | Must register with the Legal Affairs Bureau and submit a partnership agreement. |
| Non-Profit Organization (NPO) | Established for social, cultural, educational, or charitable activities. | Must register with the local government and obtain approval for non-profit status, providing detailed articles of incorporation. |
| Cooperative | Owned and operated by a group for mutual benefit. | Must register with the Legal Affairs Bureau and follow sector-specific regulations. |
How to register a company in Japan: A 6 Steps Guide
Follow the given steps to register:
Step 1: Choose the Business Structure
Select the apt business structure that aligns with your requirements concerning management, tax handling, and compliance. Refer to the above section to know more about the prevailing structures and their registration legalities.
Step 2: Draft and Notarize Articles of Incorporation
Prepare the founding documents, including the article of incorporation. The AoI boasts critical information about the company such as its structure, mission, objects, and operational guidelines. Notarize these documents if establishing a KK.
Step 3: Deposit Capital
Open a corporate account in the designed bank and deposit the required capital. This step is vital for affirming your financial compliance with the authority.
Step 4: Register with the Legal Affairs Bureau
Approach to Legal Affairs Bureau, the registering authority, to share the application and founding documents, including notarized articles of incorporation, proof of capital deposit, and details of directors and company address proof.
Step 5: Obtain Necessary Permits and Licenses
After completing the above step, ascertain which industry-specific permit applies to your business. Ascertain relevant documents and file applications after complying with pre-registration norms.
Step 6: Register for Taxes and Social Insurance
Contact the local tax office and get your firm registered. Additionally, enroll in social insurance programs for safeguarding your manpower.
Document to register a company in Japan
Here is a list of documents typically required for company registration in Japan:
- Articles of Incorporation
- Notarized copy of the Articles of Incorporation (for KK)
- List of Directors and Officers
- Certificate of Registered Seal (Inkan Shomeisho)
- Proof of Capital Deposit
- Company Address Certificate
- Power of Attorney (if applicable)
- Application Forms for Registration
Tax consideration for those seeking company registration in Japan
- Individuals are categorized as nationals or non-residents, affecting their tax liabilities on their domicile or stay duration in the country.
- Residents’ global incomes attract corporate taxes irrespective of source.
- Non-residents’ income will be taxed accordingly if it is generated within Japan. The tax treaties may come into play while imposing tax on such income.
- Japan employs progressive tax rates ranging from 5% to 45% based on income brackets.
- Non-residents may attract withholding taxes on specific income type generated locally.
- Residents may attract local inhabitant taxes based on income levels.
- A temporary surtax of 2.1% applies to income and withholding taxes to ensure utmost disaster management.
- These taxes apply to transfers of wealth, with rates ranging from 10% to 55%, depending on the value and relationship.
- Japan offers relief from double taxation through tax treaties, allowing credits for taxes paid in other countries on earned income.
Conclusion
Securing a company registration in Japan is a vital step in the business journey that not only legitimizes the entity but also opens doors to various benefits. Indeed, there are plenty of compliances to meet such a requirement. If meeting legalities is not something you are not comfortable with, let Adviso’s professional help you out. We are a top-tier expert firm specializing in global compliance and registration.
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