Company Registration in Japan in 2023-24
Japan has a strong economy and is home to many global companies, making it an attractive market for businesses. Japan has strengthened its spot at the top of the international market due to its advancements in technology and infrastructure. The major contribution to the GDP in the year 2021 has been done by the sector of agriculture, real estate, insurance, renting, and leasing.
Though fishing, manufacturing, and tourism are a few other contributors to the GDP. With an unemployment rate which is below 3% across the Japanese population, the country proves itself as a great place and a fantastic economy for foreign companies to incorporate their businesses in this particular area. Large cities like Tokyo and Yokohama, which are important commercial and financial hubs, contribute heavily to the GDP and hold a position for the government and the monarch of Japan. For international businesses to start up, the government also offers advantages.
In this article, we will be going to discuss more briefly the process of company registration in japan and the various documents that are required for Japan Company Registration. So, without any further delay, let’s jump into it.
Procedure for Japan Company Registration
The process for Japan company registration includes, the following steps should be taken:
- Step 1:- Choose a company name and have it approved by the Legal Affairs Bureau.
- Step 2:- Prepare the necessary documents, including the articles of incorporation and the list of directors and shareholders.
- Step 3:- Submit the documents to the Legal Affairs Bureau and pay the registration fee.
- Step 4:- Obtain a seal (inkan or hanko) for the company.
- Step 5:- Register the company with the relevant tax department and acquire a tax ID number.
- Step 6:- Register the company with the local city hall and obtain a seal registration certificate.
- Step 7:- Obtain the necessary licenses and permits to operate the business.
- Step 8:- Register for social insurance and employee pension plans.
Please note that the specific requirements and procedures may vary depending on the type of company and the industry in which it operates. So, before choosing to register a company in japan it is a must to understand the various business entities.
Documents Required for Company Registration in Japan
The documents required for company registration in Japan include:
- Application for company registration
- Articles of incorporation
- List of shareholders, directors, and their addresses
- Proof of payment of the registration fee
- Corporate seal
- A certificate of tax payment, granted by the tax office
- Documents showing the status of the company’s capital and assets
- Information about the company’s main business activities
It is important to note that additional documents may be required depending on the type of company being registered and the specific circumstances of the registration.
Types of Business Entities For Company Registration in Japan
Several types of business entities can be determined when you think of company registration in japan, each with its characteristics and requirements.
The most common types of business entities for company registration in Japan are:
Kabushiki Kaisha (KK) or Joint Stock Company
This is the most common type of company in Japan and is similar to a corporation in other countries. It has a distinct legal personality from its stakeholder and is accountable for its debts. KKs are required to have at least one representative director, one auditor, and a minimum capital of JPY 1,000,000.
Godo Kaisha (GK) or Limited Liability Company
This type of firm is identical to a limited liability company in different countries. It is owned by its shareholders and the stakeholders are not accountable for the firm’s debts beyond their capital contributions. GKs are required to have at least one representative director and a minimum capital of JPY 1,000,000
Gomei Kaisha (GMK) or General Partnership
This type of company is owned by two or more individuals and all partners are personally liable for the company’s debts. GMKs do not have legal personalities and are not expected to possess the least capital.
Teikan Seiho Kaisha (TSK) or Limited Partnership
This type of company is owned by two or more individuals, with one or more general partners who are personally liable for the company’s debts and one or more limited partners who are not. TSKs do not have a legal personality and are not expected to maintain the least amount of money.
Yugen Kaisha (YK) or Simple Partnership
This type of company is similar to a general partnership but has a simpler registration process and lower registration fees. YKs do not have a legal personality and are not required to have a minimum capital.
Eligibility for Japan Company Registration
For japan company registration, the following eligibility requirements must be met:
- The firm should possess a minimum of one representative director who is a citizen of Japan.
- The firm should possess a minimum of one shareholder.
- The firm should possess a registered office address in Japan.
- The firm should possess a registered capital of at least JPY 1 million (approximately USD 9,000), although this amount can be paid in after the registration process is complete.
- The firm should possess a unique company name that is not already in use by another registered company in Japan.
- The firm should possess a minimum of one corporate auditor if it has more than 50 shareholders or if the company’s capital exceeds JPY 100 million.
In addition to these requirements, the company must also file certain documents, such as articles of incorporation, a list of directors and shareholders, and a certificate of registered office, with the relevant government office.
Various Taxes on Japan Company Registration
Following company registration in Japan, the following taxes will typically apply:
- Corporate Income Tax: This is a tax on the profits earned by the company. The tax rate is typically around 20-30%.
- Consumption Tax: This is a value-added tax on goods and services consumed within Japan. The current rate is 10%.
- Property Tax: This is a tax on the value of the company’s real estate and equipment. The tax rate varies by municipality.
- Local Enterprise Tax: This is a tax on the company’s capital and net assets. The tax rate varies by municipality.
- Employment Insurance and Health Insurance Contributions: Employers are required to make contributions to these programs on behalf of their employees.
It is important to note that the specific taxes and rates will depend on various factors such as the type of company, location, and annual revenue.
Cost to Register a Company in Japan
The cost to register a company in Japan will vary depending on the type of company, the number of shareholders, and the services used to assist in the registration process.
However, some of the common costs associated with company registration in Japan include:
- Legal fees: These are the fees charged by lawyers or other professionals for assistance in the registration process.
- Notary fees: These are the fees charged by a notary public for certifying documents used in the registration process.
- Government fees: These are the fees levied by the Japanese government for registering a company. These fees can include the cost of documenting articles of incorporation and the fee of registering the firm’s seal.
- Accounting fees: These are the fees charged by an accountant or other professional for assistance in setting up the company’s accounting system and filing tax returns.
Why register a company in Japan?
There are several reasons why someone might choose to register a company in Japan:
- Japan stands as the 2nd strongest economy in the world.
- Japan has a well-developed legal and regulatory system, which can provide a stable and predictable environment for doing business.
- Japan has a skilled and educated workforce, with an educated workforce with an unemployment rate prevailing of less than 3%.
- Japan is a major trading partner with many countries and has free trade agreements with many countries, which can make it easier for companies to export and import goods and services.
- Japan has strong cultural and historical ties with other countries in the Asian region, which can be an advantage for companies looking to expand their business in Asia.
- Japan’s social and political stability makes it a safe place to conduct business.
Benefits of Japan Company Registration
There are several benefits of company registration in Japan, including:
- Innovation and R&D: Japan is known for its high-tech industries and strong R&D capabilities, which can provide opportunities for companies looking to develop new products or technologies.
- Consumer market: Japan’s economy is heavily dependent on domestic consumption, providing a huge market for companies to sell their products or services.
- Access to a large and stable economy: Japan is the 3rd biggest economy in the nation and has a stable political and economic environment. This makes it an impressive destination for foreign companies looking to expand.
- Skilled workforce: Japan has a highly educated and skilled workforce, which can be an asset for companies operating in high-tech or manufacturing industries.
- Strong legal system: Japan has a well-developed legal system that protects both domestic and foreign investors.
- Good infrastructure: Japan has a well-advanced infrastructure, containing transport, telecommunications, and energy systems, which can make it easier for companies to do business.
- Access to Asian markets: Japan’s location in Asia makes it an attractive location for businesses looking to access other Asian markets.
- Government support: The Japanese government provides various forms of support for foreign businesses looking to invest in Japan, including tax incentives, subsidies, and other forms of financial assistance.
While you plan to register a company in Japan it can be a complex process that involves various steps and costs. The type of company, location, and services used will all play a role in determining the specific costs and requirements associated with registration. Overall, registering a company in Japan can be a time-consuming and costly process but with the help of professionals and an understanding of the requirements it can be done successfully.
It’s recommended to hire a professional from Odint Consultancy to guide you through the process of company registration in Japan.
In Japan, foreign nationals can also open a business. To register, all they need is a private bank account in Japan or a director or shareholder who already has one, as well as an address.
The Joint-Stock Company, Limited Liability Company (LLC), General Partnership Company, and Limited Partnership Company are the four different structures recognized under the Japanese Companies Act.
Annual company costs in Years 2 and beyond total US$0, while incorporation fees in Year 1 total $5,950.
The process of registering a company in Japan can take around 2-4 weeks, depending on the type of company
There are no regulations on abroad ownership of firms in Japan, and foreign nationals are allowed to register and operate a firm in Japan.