Starting a business in Japan has never been more accessible, thanks to various support programs for foreign entrepreneurs. But let’s be honest—the legal and administrative process can still feel overwhelming, especially if you’re new to Japan’s regulations.

If you’re wondering how to start a business in Japan, this guide has you covered. We’ll walk you through the entire process step by step, helping you avoid common pitfalls and set your business up for success.

Keep reading to learn everything you need to know about company registration, tackling potential challenges, and making the most of Japan’s dynamic market!

Requirements for setting up a company in Japan

Several official legal and administrative obligations must be met first before you can officially start your company in Japan. Particularly important, especially if you’re starting a business in Japan as a foreigner, these steps influence one’s qualification for business registration and visa acceptance.

1. Securing a physical office address

One of the fundamental requirements for how to register a company in Japan is obtaining a physical office space. Unlike some countries where virtual offices are allowed, Japan insists that corporations have a registered physical office. This office is used to receive official mail and registration.

Many startups opt for shared office spaces to keep costs low, while more established businesses tend to go for long-term leases for added stability. Where you set up your office isn’t just about convenience—it can impact your credibility and day-to-day operations.

If you’re just starting out, securing an office space can feel like a big financial hurdle. Fortunately, programs like JETRO’s startup promotion initiative offer government-subsidized temporary office spaces, giving new businesses a much-needed boost in their early stages.

2. Preparing a comprehensive business plan

A well-prepared business plan is important for both company registration and visa approval. It should clearly outline your business goals, revenue model, and compliance with Japanese regulations. This document should outline your business objectives, revenue model, target market, and financial projections.

Additionally, your plan should be aligned with Japanese laws, and it is thus recommended to carry out initial research on compliance procedures and legal obligations. Not only does this enhance your chances of approval, but it also attracts potential financiers or investors.

3. Opening a corporate bank account

To open a corporate bank account, you’ll need to deposit your initial capital. Most Japanese banks require applications to be submitted in person and in Japanese, which can be challenging for foreigners. Usually, the following documents are required:

• – Valid visa or residence card
• – Registered office address
• – Business plan
• – Company seal (inkan)

The capital varies depending on the business structure, but many startups begin with at least 5 million yen to meet visa and investment conditions.

4. Securing funding and investments

To register a company in Japan, you must prove financial stability. This means either having at least 5 million yen in capital or employing at least two full-time Japanese residents.

• – Minimum 5 million yen of capital in the company’s bank account
• – Employment of at least two full-time Japanese residents
• – A combination of 2.5 million yen in capital and a single full-time employee

This financial proof is necessary for company registration with the Legal Affairs Bureau and visa applications. Entrepreneurs looking for additional funding can explore startup grants, venture capital, and government-backed business support programs.

5. Obtaining the appropriate business visa

Before you launch your business in Japan, you’ll need the right visa. The process may sound complicated, but with the right steps, it’s more straightforward than you think! The most popular are:

• – Business Manager Visa (4-Months or Long-Term Visa): Required for operating a business in Japan
• – Startup Visa: Available in certain cities like Tokyo and Fukuoka, which provides initial assistance to foreign entrepreneurs

Foreigners entering Japan on a short-term visa (90 days) may engage in preparatory business activities but not paid work. Checking for visa regulations on the Japanese Immigration Bureau website is conducted to confirm compliance in advance.

How to register a business in Japan

Opening a business in Japan as a foreigner requires caution and adherence to the regulations of Japan. As a startup founder looking to register or as an investor looking to expand your business, understanding the registration process is the utmost priority. This is the best guide explaining how to register a business in Japan in the most compliant manner while optimizing setup efficacy in your business.

Step 1: Secure the right visa

If you’re a foreign entrepreneur, securing the right visa is your priority. Japan offers several visa options depending on your business activities, choose one that aligns with your long-term plans. You have to get a visa that will allow business operations before you can start the registration process. The most sought-after ones are the 4-month business manager visa, start-up visa, and investor visa.

Start-up visa

Japan’s Start-up Visa program is designed to attract foreign entrepreneurs. This visa is available in selected cities like Tokyo, Fukuoka, and Aichi. To qualify, you’ll need a business plan in Japanese and a recommendation letter from the local government before applying at the immigration office. The visa is initially valid for six months, with a possible six-month extension.

Business manager visa

If you’re planning to manage or invest in a company, you’ll need a Business Manager Visa. This visa is typically granted for 1 to 5 years, depending on your company’s financial status. Before applying, you must complete the company registration process and obtain a Certificate of Eligibility (COE), which takes about 2–3 months. Once you have the COE, you can convert it to a Business Manager Visa at a Japanese embassy or consulate.

Step 2: Secure an office address

Every company in Japan must have a registered business address. This can be a physical office, a virtual office (for certain company types), or even a co-working space. Some locations have restrictions, so it’s important to check if your chosen address is suitable for company registration.

• Short-term office rentals: These serviced offices offer flexible lease terms, low setup costs, and essential infrastructure. However, it is advisable to confirm with immigration authorities whether a serviced office satisfies visa requirements.

• Long-term office rentals: Opting for a long-term lease allows you to customize the workspace to reflect your brand identity. Real estate agents and online listings can assist in finding suitable office spaces.

Step 3: Make it official – Register your company

When you start a business in Japan, you need to prepare your Articles of Incorporation (teikan). The form explains the organizational and operational structure of the company, and the data will vary depending on what kind of business structure you are employing. If you are setting up a business as an individual foreigner, the papers you need to certify registration are your seal certificate and the company seal. In addition, proof of capital deposit through your bank account must be provided.

For those wondering how to register a company in Japan as a foreigner, ensure that you gather all necessary documentation, including a seal certificate, the company seal, and any other supporting paperwork depending on whether you’re registering as a foreign individual or a foreign company. Foreign companies must also provide the registry certificate of the parent company and a notarized signature attestation. Make sure all Articles of Incorporation documents are properly signed or sealed by all involved parties.

Step 4: Notarize your articles of incorporation

Once your articles of incorporation are ready, the next step in starting a business in Japan is notarizing the documents. If you’re establishing a gōdō gaisha (GK), similar to an LLC in the U.S., notarization of the revenue stamps will cost around 40,000 yen. However, if you opt for a kabushiki kaisha (KK), which is comparable to a stock company, you will need to notarize the entire set of Articles of Incorporation, with an additional cost of 50,000 yen for the notarization, alongside the 40,000 yen for the revenue stamps.

Notarizing your Articles of Incorporation is mandatory to complete company registration in Japan. This step ensures your business structure complies with Japanese law.

Step 5: Fund your business – Deposit initial capital

A key requirement for company registration in Japan is depositing your initial capital into a Japanese bank account. If you’re setting up a sole proprietorship, a personal account might suffice, but for corporations, you’ll likely need a corporate bank account. Some banks have stricter policies for foreign-owned businesses, so researching your options in advance can save time and hassle. This is an important step before you can open a corporate bank account for your business. The capital deposit proves that your company has the necessary financial resources, a key part of starting a small business in Japan.

If you’re setting up a subsidiary, the process is slightly different. You will deposit the capital into the representative director’s account, which will then be used to fund the company.

Step 6: Collect all required documents

Before officially registering your company, make sure you have all the required documents in order. Apart from the Articles of Incorporation, you will need a letter of agreement from the director who will assume office and proof that your company’s seal has been properly registered. These documents are vital for completing the registration and ensuring that all the legal requirements for starting a business in Japan are met.

Make sure you double-check your documents, as missing any critical items may delay the registration process.

Step 7: Submit your business registration application

The final step in how to register a company in Japan is submitting the business registration application to the Registry Office (Homukyoku). The fee for registering a KK company typically starts at 150,000 yen, while GK companies have a lower registration fee starting at 60,000 yen. Once you’ve submitted your application and all the required documents, you will be able to proceed with obtaining the necessary certificates, including your registry certificate and corporate number.

Step 8: Get the green light – Business licenses & permits

After successfully registering your company, the next step is to obtain important official documents: the registry certificate, the seal certificate, and your corporate number. These documents are needed for conducting business operations in Japan, as you will need them to sign contracts, set up your official corporate bank account, and complete other legal and financial tasks.

The registry certificate proves that your company is officially registered with the Japanese government, while the seal certificate serves as proof that your company’s seal has been properly registered. The corporate number is a unique identifier for your company and is required for various business activities, including tax reporting and compliance.

With these documents in hand, you’re ready to move forward and start business in Japan smoothly.

Common challenges and how to overcome

Starting a business in Japan involves numerous opportunities but also very unique challenges. Familiarity with such challenges and how to overcome them is most vital for setting up a company in Japan. These are the most common entrepreneurs’ challenges and solutions.

1. Failure to register a valid joint-stock company

One of the most significant challenges when you start business in Japan is not properly registering the company. Lack of registration makes it hard to nearly an impossible task to establish legal grounds for company business and obtain connections with other businesses.

Solution: To avoid mistakes during registration, it’s advisable to hire local legal or accounting services to guide you through the necessary paperwork and procedures.

2. Lack of a permanent address and valid contact information

Japan requires all businesses to have a fixed address and valid contact information, including a phone number, fax, and email. Without these, communication with suppliers, government institutions, and clients will be severely hindered. 

Solution: To avoid the challenge of not having a valid permanent address and contact details, it’s highly recommended to either rent a virtual office or establish a physical office from the outset. Renting a virtual office offers a professional business address without the need for a physical location.

3. Language barrier and communication issues

The Japanese language plays a central role in business transactions. All official communication is conducted in Japanese, and without a local employee who is proficient in the language, starting your own business in Japan can become increasingly difficult. 

Solution: Consider hiring bilingual staff or using professional translation services. Additionally, being proactive in learning Japanese will significantly improve your chances of success.

4. Failure to provide necessary tax and insurance documents

Providing the required tax and insurance documents to the Japanese government is mandatory for businesses in Japan. Failure to do so can lead to severe legal consequences, including fines or business closure. 

Solution: Work with a local tax consultant to ensure all documents and filings are submitted correctly and on time. Additionally, integrating a reliable accounting system from the start can help manage tax obligations and simplify the documentation process.

5. Lack of a valid bank account for your company

To be able to receive and make financial transactions on behalf of your company, a valid bank account has to be opened. Otherwise, your ability to conduct business with other companies, pay workers, and keep finances would be crippled.

Solution: Get a relationship with a bank early in the process. Choosing a bank that is experienced in dealing with foreign companies in Japan can make the process smoother and get you all the requirements for opening a corporate account. It will also help have a financial consultant or advisor knowledgeable about local bank regulations to make sure that every piece of paper is in place, reducing the risk of opening your business account being delayed or rejected.

In addition, if you want to know how to register an online business in Japan, it’s crucial to also understand the local e-commerce landscape. 

Cost of starting a business in Japan

To start business in Japan, understanding the financial requirements is essential. The cost of starting a business in Japan can vary significantly depending on factors like the type of business, scale of operations, and whether you use professional services. 

To qualify for a Business Manager Visa, one of the primary requirements is investing at least 5 million yen into your business or employing two full-time staff members who are residents of Japan. Additionally, expenses for office space, hiring employees, and legal fees need to be accounted for. Legal fees can include costs for registering your company, making name seals, and paying professional services for registration and notifications.

The cost of doing business in Japan has decreased in recent years due to government incentives designed to encourage entrepreneurship. The most common company structure, the joint-stock company (“Kabushiki Kaisha” or KK), requires only a minimum share capital of ¥1. However, registering a KK generally costs around ¥350,000, with additional legal advisor fees of about ¥200,000 or more. This is the recommended structure for those looking to engage with other Japanese companies, as it offers the same status as large corporations like Sony and Toyota.

For those considering alternative structures, the Goudou Gaisha (similar to an LLC), which is less commonly used, is cheaper and simpler to register but does not provide the same prestige or operational benefits as a KK. Regardless of the structure, it is important to budget for various registration and operational costs, including fees for company registration, tax notices, and social and labor insurance notifications, which may range from ¥2,200 to ¥5,000 depending on the specifics of your business.

Conclusion

Whether you are wondering how to register a company in Japan or navigating the intricacies of Japanese business regulations, taking the above step will simplify the process.

Japan’s thriving economy and supportive environment for startups offer excellent opportunities for entrepreneurs. With proper planning and professional guidance, you can start a business smoothly. For further assistance, don’t hesitate to reach out to our experts at Luvina, who can ensure that your business complies with all regulations and help you overcome any hurdles that may arise during the setup process.

FAQ

How long does it take to register a company in Japan?

Generally, if your business requires a professional license to operate, it could take 2 to 3 months to be fully operational. The time required to start business in Japan can vary depending on the complexity of the business and the type of license needed. However, the company registration process itself can be completed relatively quickly.

What are the main business structures in Japan?

Japan offers several legal business structures, each with different characteristics. The main structures include:

– Representative office (駐在員事務所): Not a legal entity and cannot engage in business activities beyond marketing and research.

– Sole proprietorship (個人事業主): A simple structure where the owner is fully responsible for the business.

– Limited liability company (合同会社 or LLC): A flexible and low-cost structure, suitable for smaller businesses.

– Joint stock corporation (株式会社 or KK): A more formal and popular structure for larger businesses, requiring a minimum capital of ¥1.

– Limited liability partnership (有限責任事業組合): A structure for businesses with shared responsibilities.

Can foreigners manage a company in Japan without a visa?

No. Having a visa is a must for foreign nationals wishing to manage or establish a business in Japan.rative economy. Call Luvina today for personalized guidance and to begin the process of entering Japan’s business environment successfully.