I
Japan

Japan

Company Formation in Japan

Japan

Formation Time
2–4 weeks
Min. Capital
¥1 (KK & GK since 2006)
Corporate Tax
~30% effective (23.2% national + local)
Foreign Ownership
100%

Overview

Japan is the world's fourth-largest economy and Asia's most technologically advanced market. Since 2006, both the KK (Kabushiki Kaisha / stock company) and GK (Godo Kaisha / limited liability company) can be formed with just ¥1 in capital, eliminating the previous ¥10 million barrier. Japan offers unparalleled access to a domestic market of 125 million affluent consumers, a highly educated workforce, and world-class infrastructure. The corporate tax system is multi-layered — combining national (23.2%), prefectural, and municipal taxes for an effective rate of approximately 30% — but this is offset by generous R&D tax credits, accelerated depreciation, and special economic zone incentives. With 78 double tax treaties, strong IP protection under the Patent Cooperation Treaty, and regulatory transparency, Japan is a premier destination for technology, manufacturing, and professional services firms seeking credibility and access to the broader Asia-Pacific region.

World's 4th economy
¥1 capital for KK & GK
78 tax treaties
R&D tax credits
Strong IP protection

Why Choose Japan

1

World's 4th largest economy — 125 million affluent consumers

2

¥1 minimum capital for both KK and GK since 2006 reforms

3

78 double tax treaties including all major economies

4

World-class IP protection and patent infrastructure

5

Generous R&D tax credits (up to 20% of qualifying expenses)

6

GK structure offers operational flexibility similar to an LLC

7

Gateway to Japan's $5 trillion GDP market

8

Stable legal system with transparent regulatory environment

Business Entity Types

EntityOwnershipDirectorsCapitalTaxBest For
KK (Kabushiki Kaisha)100%1 (no residency requirement)¥1~30% effective (national 23.2% + prefectural + municipal); R&D credits availableLarger businesses, those seeking investor confidence, IPO-track companies
GK (Godo Kaisha)100%1 member/manager¥1Same corporate tax rates as KK; simpler governanceStartups, subsidiaries, small businesses, consulting firms
Branch Office100% (extension of foreign parent)1 representative in JapanNoneTaxed on Japan-sourced income onlyCompanies testing the market before full commitment
Representative Office100%1 representativeNoneNo commercial activity allowed; not subject to corporate taxMarket research, liaison activities, pre-entry planning

Step-by-Step Formation Process

1

Name & Seal Preparation

2–3 days

Choose company name, prepare Articles of Incorporation, and order the official company seal (Inkan). KK articles must be notarised by a Japanese notary.

2

Capital Deposit

1–3 days

Deposit registered capital into a designated bank account in Japan and obtain a deposit certificate.

3

Registration Filing

3–7 business days

File incorporation documents with the Legal Affairs Bureau (Homukyoku). Registration date becomes the official date of incorporation.

4

Tax & Social Insurance Registration

1–2 weeks

Register with the National Tax Agency, prefectural and municipal tax offices, and social insurance authorities.

5

Bank Account

2–4 weeks

Open a corporate bank account with a Japanese bank. Non-resident shareholders may need to attend in person or use a representative.

Costs & Fees

Government / License FeeJPY 60,000+
Our Service FeeUSD 3,500+
Annual RenewalUSD 2,000+

Fees are indicative and may vary based on business activity, entity type, and additional approvals required. Contact us for a precise custom quote.

Get Custom Quote

Banking

Japanese banking is conservative and thorough. The 'mega banks' (MUFG, SMBC, Mizuho) dominate corporate banking but have strict onboarding requirements for foreign-owned companies. Newer entrants and regional banks may be more accommodating. Account opening typically requires an in-person visit to a branch, a registered office in Japan, and a company seal.

Account Opening Time
2–4 weeks
Multi-Currency
Yes — multiple currencies supported

Recommended Banks

MUFG (Mitsubishi UFJ)SMBC (Sumitomo Mitsui)Mizuho BankResona BankShinsei BankSony Bank

Tax Overview

Corporate Tax
~30% effective (23.2% national + ~7% prefectural/municipal)
Personal Income Tax
5–45% (progressive) + 10% inhabitant tax
VAT / Sales Tax
10% consumption tax (8% on food/beverages)
Capital Gains Tax
Included in corporate income; 20.315% for individuals
Withholding Tax
20.42% on dividends (domestic); reduced by treaties; 20.42% on royalties/interest
Double Tax Treaties
78 countries

Japan offers substantial R&D tax credits (6–14% of qualifying expenses, up to 25% of tax liability). Special zones (National Strategic Zones) provide additional incentives. SMEs (capital ≤¥100M) enjoy a reduced national rate of 15% on the first ¥8M of income.

Visa & Residency

Business Manager Visa

1 year, renewable to 3 or 5 years

For those starting or managing a business in Japan. Requires a physical office and either 2+ full-time employees or ¥5M+ capital investment.

Highly Skilled Professional Visa

5 years (fast-track to permanent residency)

Points-based system evaluating education, income, and experience. 70+ points qualifies; 80+ points offers permanent residency in 1 year.

Intra-Company Transferee Visa

1–3 years, renewable

For employees transferred from a foreign parent or affiliate company to the Japanese entity.

Engineer/Specialist in Humanities Visa

1–5 years, renewable

For skilled employees in technology, engineering, business, and other professional fields.

Family visa: AvailableProcessing: 1–3 months

Frequently Asked Questions

What is the difference between a KK and a GK?
A KK (Kabushiki Kaisha) is a stock company similar to a Corporation or AG — it issues shares, requires notarised articles, and is the standard for larger businesses or those seeking to go public. A GK (Godo Kaisha) is a membership-based limited liability company similar to a US LLC — it has simpler governance, lower formation costs (no notarisation required), and flexible profit distribution. Both require only ¥1 in capital. Most foreign startups and subsidiaries choose a GK for simplicity, while a KK carries more prestige with Japanese clients and partners.
Do I need to live in Japan to form a company?
No. Foreign nationals can form both a KK and a GK without residing in Japan, and there is no requirement for a Japanese-resident director. However, you will need a registered office address in Japan (we provide this) and a company seal (Inkan). Opening a bank account is significantly easier if at least one representative director can visit Japan in person.
How much does it actually cost to form a Japanese company?
Government fees for a GK are approximately ¥60,000 (registration tax). For a KK, it is approximately ¥202,000 (¥50,000 notarisation + ¥150,000 registration tax + stamp duty). Our professional service fees cover document preparation, seal registration, and all filings. Budget ¥300,000–500,000 total including government and professional fees for a GK, and ¥500,000–800,000 for a KK.
Is the ¥1 minimum capital realistic?
Legally, ¥1 is the minimum since 2006 reforms. However, practically, banks may decline to open an account for a company with minimal capital. For a Business Manager Visa, ¥5 million is required. Most advisors recommend at least ¥1–5 million in capital to demonstrate seriousness to banks, clients, and immigration authorities.
What taxes will my Japanese company pay?
Japanese corporate taxation is multi-layered: national corporate tax (23.2% standard, 15% for SMEs on first ¥8M), prefectural enterprise tax (~3.6–7.5%), municipal corporate tax, and business tax. The combined effective rate is approximately 30%. You will also collect 10% consumption tax (Japanese VAT) if annual revenue exceeds ¥10 million. R&D tax credits can significantly reduce the burden for technology companies.
Can I hire employees in Japan through my new company?
Yes. Once registered for social insurance (health insurance and pension) and labour insurance (workers' compensation and unemployment), your company can hire employees. Japan has strict labour laws — employment contracts, minimum wage compliance, overtime regulations, and termination protections are rigorously enforced.