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Starting A Business In Japan

Starting a Business in Japan

Japan is a bustling country with a rich and beautiful culture. It also has many economic opportunities. If you have always wanted to live in Japan, then why not consider starting your own business there?

There is a long and complicated process foreign entrepreneurs in Japan must follow to start a company. In this guide, we will go over how to set up your own company in Japan if you are not currently a resident.

Why Start a Business in Japan?

Japan has the third strongest economy in the world, right after the United States and China. The country also has agreements in place with several countries that promote free trade.

Japan also has some of the lowest average tariffs in the world on foreign goods. The country also has a highly educated population of discerning customers who love innovative products. And there is no shortage of hard-working and capable potential employees.

Do you have specific questions about starting a business in Japan? Browsing through qualified bilingual Advisors in Japan is one way to get to the core of your concerns.

How Foreigners Can Start a Business in Japan

The method for starting a business in Japan depends on several factors. The type of business you start, whether you want to live there, and whether you are starting a new business or expanding an existing one. In the next few sections, we will go over the most important aspects of starting a company in Japan.

While establishing your business in Japan, it's important to understand the best practices for hiring and compensating remote workers. For a detailed guide on navigating these aspects in the Japanese market, check out our comprehensive article on how to hire and pay remote workers in Japan.

How to Immigrate to Japan and Start a Business

If you’re planning on moving to Japan, the first thing you will need to do is get the right visa. If you already have a visa (like a working visa), you can use that to start your business (you will still need to transfer to a business one eventually), but if not, you will need to get a business visa.

Business Manager Visa

The four-month Business Manager Visa requires your business to have an initial capital of at least 5 million Yen and have two or more employees who live in Japan. To apply, submit your passport, proof of business insurance, and several documents regarding your company to the Japanese Immigration Bureau.

This allows you to set up a bank account, get your business registered, and apply for a residence card. You will also need to secure a business space in Japan. After the visa expires, you can apply for a one-year extension.

Startup Visa

The Startup Visa does not require you to have employees in Japan or 5 million Yen, but it is not widely available. You can only get it in select cities like Tokyo, Hiroshima, and Niigata City. The visa is valid for six months to a year, depending on where you are located. To get it, you will have to hire an administrative scrivener (gyosei shoshi), or immigration expert, to submit your paperwork for you.

Investor Visa

You can apply for an Investor Visa from outside Japan. It can last one to five years. Whether you can renew it will depend on the success of your business. It requires your business to be pretty far along in terms of organization. Some entrepreneurs get a Business Manager Visa first and change to an Investor Visa when their company is set up. Below is a list of documents you will need to get an Investor Visa:

  • Information about company investments
  • A complete business plan (in Japanese)
  • Registration paperwork for your company
  • Any business licenses you have
  • Contracts for office rentals
  • Your work and professional history
  • Paperwork for your employees

Receiving any of these visas can be a drawn-out process. It is best to apply for them well in advance of starting your business. In particular, the Investor Visa can take a long time to attain.

To get the Investor Visa, you have to first apply for a certificate of eligibility (COE) with the immigration office, which can take up to three months. Then, you have to trade your COE for an investor status of residence (SOR) at the Embassy of Japan, which can take another few weeks. A lot of time and effort goes into getting a work visa in Japan. Generally, the right expert can help you get through the process without making costly mistakes.

While it is possible to start a kojin jigyo (sole proprietorship), a gomei kaisha (general partnership company), or a goshi kaisha (limited partnership company), these types of companies are rare in Japan because they offer little to no liability protection for investors. The main types of businesses are kabushiki kaisha and godo kaisha.

A kabushiki kaisha (K.K.) business structure is the equivalent of a corporation. It allows a company to sell stock shares to the public. In Japan, a K.K. is by far the most common and well-known business structure. It offers business owners the greatest level of liability protection.

A godo kaisha (G.K.) is the equivalent of a limited liability company (LLC). Goudou geisha offer business owners liability protection, but they cannot sell stock shares to the public. These types of companies are new to the Japanese market.



How to Start a Business in Japan Without Moving There

If you do not plan on moving to Japan, you will need a representative director for your business who is a resident in Japan to do things like deposit your business capital. Until you get a business bank account, they will have to deposit your capital in a personal bank account under their own name, so it is vital that your representative is someone you trust.

Your business will be sending money to your home country, so you will need your bank (that handles your corporate bank account) to offer a remittance feature. Here are a few things you will need to give your bank to activate this function. Remember that all of these (including your name) must be in Japanese.

  • Your name
  • Japanese business address
  • Your inkan shomeisho seal
  • Your bank PIN
  • Other details like your date of birth and gender

How to Expand Your Current Business Into Japan

If you are opening a subsidiary company or branch office in Japan, you will still need to make deposits using your representative director’s account. You will also need a few extra documents acknowledging your foreign company in your articles of incorporation.

Besides the other information in your articles of incorporation, you will need to submit a registry certificate of the parent company and a signature of attestation from a representative of the parent company. The signature must be notarized.

Get Help Relocating to Japan

Japan can be a great place to live and work — including starting a business. If you have your heart set on moving to Japan, you need the right information. Relocate is an independent marketplace for global migration where you can dig deeper into relevant topics and find qualified Advisors to help guide you through the Japanese immigration process.

Browse Japanese Advisors today and get personalized consultations on starting a business in Japan, business etiquette and more.

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