Japan Company Formation

Opening a company in Japan

Why start a company in Japan? What are the advantages in the country of Japan?
Japan is in a unique position. Being a Western country with a free democracy, it borders China, and is relatively close to Australia, which makes Japan an excellent strategic destination for exports.

The local currency is the Japanese yen (JPY).

Japan is a convenient gateway to the Asian market, with a local market that understands the English language very well.

The process of opening a company in Japan
Opening a company in Japan begins with the signing of several documents, some of which need to be signed in front of a notary public. The package of documents is sent with a courier urgently to our local agent and the company is established.

In Japan there is no need for a local director or a local shareholder.

In Japan you can open a company even if you are a foreign citizen. This means that it is possible to open the company with 100% shareholding in the name of a foreign citizen - in your name, or even in the name of a foreign company. The director can be foreign and there is no need for a local director.

However there are some things unique to Japan in the company opening process.

The establishment of the Japanese company
Establishing the company in Japan is not a difficult matter, but an analog one. Everything is based on paper, and there is a strict procedure.

The company address should be in a known commercial place, such as Tokyo or Kyoto, otherwise the banks will not talk to you at all to open the account.

The process takes about 2 months - 6 weeks to prepare documents + 2 weeks to open in JETRO, which is the name of the Japanese company registrar.

It is possible to establish a company without a business visa. In this first step it is not necessary to come to Japan.

The company can be established with only a "virtual address" (only address services, no office).

You need to prepare goals for the company. For the KK company you can set as many goals as you want. It is recommended to set only 10 goals, because when you apply for a business visa (for those who are interested), the immigration authority will ask a lot of questions. Additional goals can be added later through an amendment to the company's articles of association.

Company stamp
In Japan, the culture of signing documents is not based on signatures, but on seals. A stamp, like the usual stamps you know, only unique to each company. The stamp is mainly relevant to banks, and whoever holds the company's stamp is the one who is actually allowed to perform operations on the company's account. Japan is a fantastic culture!

Equity Requirement
The official equity is one dollar, but the unofficial rule is that the company will have a minimum equity of $8,000, which is one million yen. Nevertheless, if the company intends to employ a foreigner with a business manager visa, there is an official requirement of an equity investment of 5 million yen, which is about $40,000.

local representative
On the one hand, the company will not open without equity. On the other hand, it is not possible to open a bank account to deposit the equity because the company does not yet exist. Apparently there is a dead end here.

The solution is actually to appoint a local agent, usually a local law firm or accountant that we know and trust, who will use his own bank account as a trustee for the equity funds of the new company, until the new bank account is opened. The trustee provides the registrar of companies with proof that the parent company has a designated deposit amount for the establishment of the company.

After opening the company, you can immediately use the equity capital to operate the company.

Opening a bank account
Japanese banks actually do not agree to open a bank account for any new company, unless it has a local representative, i.e. a resident Japanese who is willing to manage the account opening process.

The process itself takes about two weeks.

The local representative can act as a local director. The Japanese resident need not be a Japanese citizen; A person with legal resident status in Japan is sufficient.

Immediately after opening the account, the director resigns, but not before holding a physical meeting between the client and the bank, to introduce the client to the bank, and to explain to the bank that the client is in the process of issuing a business visa and that the client will be the one managing the account from here on out.

Business visa
There are basically two types of visas:

Business manager visa (KK company) or manager visa (KK subsidiary to another company, for example when the parent company is foreign):

A "business manager" visa is possible if the KK is independent (the owner is a natural person), because the applicant for such a visa must be the sole owner of the company (or have at least 2/3 ownership) who is a natural person, not an entity.

An application for a "manager" visa must be submitted if the company is established as a subsidiary.

Visa requirements:

Equity capital deposited in the company of 5 million yen as stated above. and one of these:
-Degree in business,
- Certificate in Culinary Arts.
- At least 3 years of proven experience as a manager.

That means you cannot get a business visa if the visa candidate is new to the company, has no experience, or has no connection to the business or company.

You can start the process of issuing the business visa as soon as you have a company, and even before the process of opening the bank account.

First step: 3-4 months - receiving confirmation of eligibility. This is an official step in which the visitor visa is changed to a business visa.

Second step: 2-4 weeks for the meeting at the local Japanese consulate to change the visa status.

The two visa types above also require the following:

• The applicant must draw a salary from KK company of about JPY 250,000+ or ​​more per month.
  
• For the visa application, the new company must have its own Japanese address in real office space or a service office (such as Regus) that meets certain criteria (such as an office with a company name plate, office equipment, phone number, etc.). Therefore a "virtual office" (address services only) will not meet the conditions, nor will a private residence. The company must have a registered address at the actual office (or at a service office) before a visa application can be submitted.
  
• It is required to prepare a detailed business plan. The plan should show clear evidence that the business in Japan can generate enough sales to sustain it in Japan. It is required to show a detailed business plan for three years is a crucial part of the business visa application submitted to the immigration authority, showing that the projected monthly profit will be able to cover a monthly salary of at least 250,000 JPY per month for the visa holder. As such, the business plan is very important and must contain detailed information, projections, estimated expenses, etc. We can offer advice on any proposed amendment to your client's plan to meet immigration requirements.
  

After opening the bank account and depositing the equity capital, the company is opened and a "certificate of registration" (Japanese certificate of incorporation) is issued, like the one we issued:

VAT registration
After the opening of the company, at the same time as the opening of the current bank account for the company, the registration of the new company with VAT will also be carried out. The company will receive a VAT number and can start trading.

Company maintenance
The company requires annual maintenance of payment of fees, annual submissions, local address (which we will provide for you), as well as submissions to the tax authority.

Tax in Japan
The corporate tax in Japan is 30%. In addition, there is a resident tax and other taxes that do not exceed 2%.

Reports must be made to the Japanese Tax Authority on a monthly basis.

Questions and answers
Question: Is it necessary to physically fly to Japan to open a company in Japan?
Answer: The entire process is carried out remotely and at no stage is it necessary to physically come to Japan. There is no need to fly to Japan to open the company, nor the company's bank account. The entire process of opening the company and the company's bank account is carried out remotely without stepping on Japanese soil.

Question: Who provides the local address for the company in New Japan?
Answer: We will provide the initial local address. In order to issue a business visa, it is necessary to rent a physical office.

Question: How can I find a good accountant who can handle the company in our new Japan?
Answer: We will connect you with a local accountant.

Question: If I want to come to Japan to open a bank account, what should I do?
Answer: We will try ahead of time to arrange a meeting for you at the branch in order to sign the account opening forms, so that everything will be in order before you arrive, so that you don't just walk around the city in order to find a branch that will accept you and open a bank account for your new company in Japan.

Question: What kind of company in Japan should I open?
In Japan there are two types of companies:

Kabushiki-Kaisha (LTD - this is the KK, the company Ltd

(Godo-Kaisha (LLC - this is the GK, the limited liability company (hybrid between a limited liability company and a partnership)

The most recommended type of company for regular business is KK. This is because the second option of the GK has several disadvantages. For example, in GK for a shareholder to want to sell his share in the company, he must get consent from all the other shareholders. In addition, in GK the shareholders must also be the directors of the company and this is a disadvantage.

Question: Do you need a European passport to open a company in Japan?
Answer: There is no need for a European passport. We can open a company in Japan for any foreign citizen as long as he has a valid passport.

Question: How long does it take to open a company in Japan?
Answer: The process of opening the company, including signing the power of attorney and sending it, should take about 4-6 weeks. After that, the process of opening a bank account takes about 3 weeks, depending on the readiness of the banks to accept the new company as a customer. Of course, these are times that depend on third parties, so this is only an estimate.

Question: Is it possible to open a company in Japan for a person with American citizenship or a person living in the USA?
Answer: Yes. We know how to open a company in Japan for a person with American citizenship or a person living in the USA.

Question: How much does it cost to open a company in Japan?
Answer: Click here to contact us and get an up-to-date quote for free!