Japan is an island state in East Asia (it includes about 6,848 islands). Such a developed state with a high standard of living is the only one in the world with status - an empire. In the world ranking, Japan ranks 3rd in terms of nominal GDP. To register a company in Japan is beneficial for international business activities.
Japan is definitely called the "land of the rising sun". Today this country is a recognized leader in the field of IT-technologies, electronics, precision engineering, automobile and component manufacturing. The state is one of the most economically and industrially developed in the world.
The convenient location of Japan at the crossroads of transport routes between USA and China, as well as the countries of Southeast Asia, makes it an extremely attractive country for opening a business in Japan. Popular specializations are an international trade, a transportation, logistics, the supply of components and equipment for various purposes.
If you decide to register a Japanese company, be aware, that this provides for compliance with strict tax rules and requirements.
For example, registering a corporation in Japan is carried out if there is a minimum authorized capital of at least 30 million yen (about 268 thousand dollars, a quarter is paid immediately), and in order to open a Limited Liability Company in Japan, the amount of authorized capital from 10 million yen (more than 89 thousand dollars, half is paid immediately). Registration fee, for example, for a corporation is 150,000 yen ($1,335), for an LLC is 60,000 (about $530).
The activities of companies are regulated by Yugen Gaisha Law 1940. If you decide to set up a firm in Japan, you need to know about the types of Japanese enterprises:
- Go-mei Gaisha - a business partnership;
- Go-shi Gaisha - a partnership with a limited liability;
- Kabushiki Kaisha - a corporation;
- Yugen Gaisha - an LLC;
Taxes in Japan include direct taxes (an income, a corporate, a gift, the inheritance, a land and a real estate), as well as a number of indirect taxes and fees.
In short, tax payments in Japan consist of six components, their size depends on the annual income of the enterprise and ranges from 28% for an annual turnover of less than 4 million yen, up to 37% for a turnover of more than 8 million yen.
If you intend to open an LLC in Japan, YB Case specialists inform you, that Japanese LLC can consist solely of non-residents, but the company’s registered address must be located in Japanese territory. All companies are required to submit tax reporting within 30 days after the end of the relevant financial year.
Despite the strict tax rules in force in Japan regarding enterprises and companies, both residents and non-residents, it is possible to register a representative office of a foreign company in Japan and also to open a bank account in Japan.
Representative offices of foreign companies are exempt from taxation, if their activities are conducted outside of Japan. In this case, taxes are paid only by parent companies in their jurisdiction. Japanese law does not limit foreign representations in choosing a bank in order to open a corporate account in Japan.
To start business in Japan will take no more, than 4 weeks from the date of filing the relevant documents. Thus, it is possible to open a company in Japan with an office, through which it is possible to conduct trade and other economic operations in the future, since Japan is not included in any blacklist, and Japanese companies have earned the authority of reliable suppliers and manufacturers.
At the same time, to register a foreign representative office in Japan does not require an impressive authorized capital, such as in the case of the setting up a Japan LLC/joint-stock company.
Knowledge and understanding of local laws and established rules are required, if you want to open a company in Japan. You can turn to the services of specialized registration agents. YB Case professionals will provide legal support services in registering a business in Japan, and legal advice on all related issues.
- Japan's economy is one of the most developed economies in the world;
- low taxes (compared to other large western countries);
- Japan is a member of many world organizations (G7, APEC, UN, etc);
- the lowest unemployment rate in the world;
- Japan occupies a leading position among world states in terms of the index of ease of doing business, and the index of economic freedom;
- Japan has signed many double tax treaties with other states;
- highly developed technologies.
- It is necessary to submit to the Register the name of the company in the state language (Japanese), it is allowed to use Chinese characters. It is forbidden to use words relating to the imperial family, state institutions.
- The company must have a registered address and office in Japan.
- If you want to establish a partnership/branch in Japan, you must remember that there are no statutory capital requirements for such companies. The requirements for the minimum authorized capital of a joint-stock corporation is 10 million Japanese yen, and for corporations with limited liability is 3 million Japanese yen. A capital can be contributed in cash and in material equivalent (for example, intellectual property can also be contributed, but only on condition, that it can be transferred to third parties in the future, without any restrictions).
- There is no exchange control in Japan
- There are no requirements for the residency of shareholders, they can be both individuals and legal entities. Only an individual can hold the position of director.
- Meetings are mandatory procedures (can be held outside of Japan).
- All companies must maintain accounting records showing all operations (received, sent funds, share of shareholders, etc.).
- For joint-stock companies, an audit is required.
- Information about shareholders/directors of the company is publicly available.
- Non-residents and foreign representative offices are not subject to corporate tax on income received abroad. At the same time, Japan has the lowest VAT (compared to developed countries) at only 5%. The corporate income tax rate is 22.4%.
- Japanese law guarantees to keep secret information about banking operations conducted by the company.
If you have any questions related to the establishment of companies in Japan, you can order legal advice from YB Case experts, where you will discuss ways to solve the problems of registering a Japanese business.