Company register in Japan
In today's world, where globalisation has become a defining feature of the economic landscape, the opportunity to open a company in another country is becoming an increasingly attractive and viable strategy for entrepreneurs. One of the countries that attracts attention for its unique culture, technological advances and business prospects is Japan. Starting a company by a foreigner in this country is a challenge that requires a deep understanding of its peculiarities and a responsible approach to planning and implementation. The main sectors of the economy in Japan are as follows:
- the financial sector, including banking;
- insurance sector;
- real estate market;
- retail trade;
- transport infrastructure;
Advantages of company registration in Japan
Here are some of the most important ones:
- Technological forwardness: Japan is a leader in the development and implementation of advanced technologies, which opens up endless business opportunities in innovative industries.
- High-quality labour force: Highly educated workers with diverse skills and experience are ready to support your business and contribute to your growth.
- Global logistics: Japan's geographical location makes it easy to trade with other countries using highly developed transport networks.
- Favourable regulation: Japan offers favourable tax rates and a business-friendly regulatory framework that ensures sustainable development.
- Excellent infrastructure: An extensive network of communications, transport and services supports the efficient operation of businesses.
- Ready market: Japan is one of the world's largest consumer markets where you can find your customers.
Choosing the Optimal Business Structure in Japan: Importance and Benefits
When considering starting a business in Japan, an important step is to choose the right business structure. Choosing the right form of business has a key impact on taxation, legal status, financial control and the ability to attract investment. In this context, we will review the main business structures in Japan and their advantages, as well as provide detailed information on the conditions for registering a foreign individual entrepreneur.
Joint Stock Company (Kabushiki Kaisha):
Limited Liability Company (Godo Kaisha)
A limited liability company is another popular form of business in Japan. It gives the owners (partners) limited liability for the company's obligations. Each partner has a defined share of ownership and liability and shares in the company's profits and losses.
That’s a form of business organisation in which two or more persons combine their resources and knowledge to achieve common goals. The partners are jointly liable for the company's obligations and share profits and losses.
Sole proprietor (Kojin Jigyo)
A sole proprietor is a natural person who carries on business independently. The owner is liable for all the obligations of the business with his or her personal property.
A joint venture is a joint project between two or more companies that pool their resources to achieve common goals. They share profits and risks according to the terms of the agreement.
Foreigners wishing to register as sole proprietor in Japan must follow the following steps:
- Obtaining residence status: The foreigner must obtain an appropriate residence status in Japan that will allow him/her to conduct business activities.
- Choosing a business activity: You must also determine the nature of your business activity and register it following the requirements of the law.
- Registration of an individual entrepreneur: A non-resident must register his/her business with the local government authorities (municipality) at the location of the enterprise. To do this, you need to submit an application and the necessary documents, including a copy of your passport and residence status.
- Taxation: A foreigner must comply with mandatory registration taxation and obtain a tax number.
- Bank account: To conduct business, a foreigner must open a bank account with a local bank.
- Permits and licences: Depending on the nature of the activity, you may need additional permits and licences to conduct business.
These conditions are subject to change according to the laws and policies of the country, so it is important to familiarise yourself with the current requirements and guidelines of the relevant authorities before registering.
What is a free economic zone?
Companies that register following the rules of free economic zones may enjoy certain benefits, such as reduced taxes, customs benefits, simplified administrative procedures, access to infrastructure and other benefits depending on the specific conditions of the zone. The main free economic zones are:
- Tokyo Metropolitan Area: Located around the capital of Japan – Tokyo. This zone is aimed at developing financial services, technology, research and development.
- Keiyo Industrial Zone (Keiyo Special Economic Development Zone): Located on the east coast of Tokyo and designed to stimulate industrial development, innovation and exports.
- Kansai Special Economic Zone: Located in the west of Japan and includes Osaka, Kyoto and Hiroshima prefectures. It is focused on the development of industries such as automotive, electronics, biotechnology and others.
- Shingo Innovation and Startup Support Zone: Located in the southwest of Tokyo. It is aimed at supporting innovative companies and start-ups.
Key features and requirements
Starting a company in Japan is a process that involves several steps and requirements, but it can also be quite simple if you have a good understanding of the procedures and requirements. Here is a detailed overview of the main aspects of opening a company:
- Choosing the type:
- Rely not only on your desires and goals, but also on your capabilities. Some forms are more accessible than others.
- Company name:
- Choose a unique name for your company and check it against the registry.
- Place of incorporation:
- Select the place of incorporation (usually in the municipality where you plan to operate).
- Identification of a resident director:
- According to the requirements, at least one of the company's directors must be a resident of Japan. This means that they have permanent residence in the country.
- Filling out the paperwork:
- Usually, you have to submit the following documents to register a company:
- Application for company registration.
- Articles of association (agreement for a limited liability company or a joint stock company).
- Copies of passports of directors and shareholders (if it is a joint stock company).
- A statement of the company's address and consent to its use.
- Confirmation of a resident director (if it is not you).
- Usually, you have to submit the following documents to register a company:
- Payments and start-up capital:
- Japan does not have a hard-coded minimum start-up capital for most types of companies, but you must provide sufficient funds to carry out your planned activities. The amount is usually determined based on the specific needs of the company.
- Register your company with the local commercial registration office or relevant authority. The registration procedure involves submitting the necessary documents and filling out the appropriate forms.
- Opening a bank account:
- After registration, you can open a bank account for your company where you will conduct financial transactions.
- Obtaining a tax number:
- Contact your local tax office to obtain a tax number for your company.
- Taxation and reporting:
- You must comply with the tax reporting and taxation requirements governed by Japanese tax law.
Taxes for foreign companies
The taxation system in Japan includes various types of taxes that apply to both residents and foreigners operating in the country. Here are some of the main ones:
Starting a company in Japan is a powerful step for those seeking to do business in a highly developed economic environment with rich opportunities. The registration and taxation system in Japan requires awareness and vigilance, but with the right approach and proper advice, the process can be successful.
Doing business in Japan is more than just opening a company. Cultural sensitivities, language barriers, and understanding of consumer warnings and market dynamics are of great importance. Interaction with local experts, partners and consultants can significantly increase your opportunities in this competitive market.
What documents are needed for opening a bank account?
You will need the following documents:
- Passport or other document proving your identity and residency status.
- A resident card (iko card) is issued to foreigners for long-term stays in Japan.
- Personal identification number (My Number), which is issued to all residents of Japan.
- Certificate of employment, source of income or business activity.
- Additional documents that the bank may request to confirm financial stability and compliance with the law.
What are the taxation features for foreigners?
They are subject to taxation under the same conditions as local entrepreneurs. Above, we have discussed each aspect in more detail.