Business Startup in Japan

When a foreign company intends to conduct any activities in Japan, it must set up its base in Japan. There are three types of bases for the foreign companies as shown below.

1. Company (owned by the parent company)
2. Branch (part of the parent company)
3. Representative Office (same status as the parent company)

The Company or the Branch can be engaged in a variety of businesses. The Representative Office can do only no-business activities such as marketing research or publication activities.

Company

The forms of stock company or LLC(limited liability company) are the common institutions to conduct business in Japan. As these companies are self-contained and independent entities under the Japanese Commercial Law, the legal troubles caused by these companies, in principle, do not have an effect on the head office in the home country.
Paid-in capital is necessary. (Five million yen in the case of the expatriate manager to have the Status of Business Manager of COE)

	Stock Company	LLC
No. of Capital Provider	One or more	One or more
Amount of Capital	One yen (minimum)	One yen (minimum)
Liability of Capital Provider	Indirect & limited Liability	Indirect & limited Liability
Institutions Required	Shareholders Meeting & Board Meeting	No regulations
Board Member	One or more & Auditor	Capital providers
Term of Board Member	10 years (maximum)	No term regulation
Publication of financial results	Necessary	Unnecessary
Distribution of profit	Proportion to the amount of investment	Discretionary
Cost for establishment	・Registration tax: ¥150,000 (minimum) ・Certification of articles of incorporation: ¥50,000 ・Stamp duty: ¥40,000 (in the case of PDF: nil)	・Registration tax: ¥60,000 (minimum) ・Certification of articles of incorporation: No certification ・Stamp duty: ¥40,000 (in the case of PDF: nil)
Period for establishment	About 3~4weeks*	About 2~3 weeks*

*Depending on the previous preparations. Sometimes, it takes more time.
 

Newly Introduced “Startup Visa”

1. When a foreign company intends to set up a new company in Japan, it must obtain the “Company Manager Visa” for its expatriate manager from Japanese immigration office. The conditions for the approval of such visa are establishment of the new company in Japan with the capital of five million yen or two local employees.
2. In 2015, Japanese Government adopted a policy to facilitate the advancement of foreign companies into Japanese market and appointed ten local governments as the National Strategic Special Zone such as Tokyo, Kyoto and Fukuoka.
3. At the National Strategic Special Zone, the so called “Startup Visa” system was introduced. The important aspect of this system is that the Company Manager Visa is approved to the expatriate manger before the establishment of a new company in Japan. Therefore, no capital nor local employees are necessary before obtaining the said visa.
4. The procedures of the application for the “Startup Visa” are as follows (in the case of Tokyo).
1. Application for the “Certificate of Startup Activities Confirmation” to Tokyo Metropolitan Office
2. Tokyo examines the proposed business plan contained in the application and issues the said certificate to the applicant.
3. Application for the visa of “Company Manager” (6 months valid) with attachment of the said certificate of Tokyo to the immigration office of Japan.
4. When the visa of Company Manager is approved by the immigration office, the manager can enter Japan and work for the startup activities for six months. Thereafter, the manager can conduct the planned business with renewal of the visa.

• *If the foreign companies plan to enter business in Japan based in Tokyo, we recommend for them to obtain this Startup Visa. Okada’s Office can handle all procedures explained above on behalf of the foreign companies.

 

Branch

As a branch is a part of the parent company in the home country, it can utilize the higher credit of the parent company.

Taxation on a branch in Japan could be levied based on the bigger capital of the parent company.
The legal troubles caused by branch offices in Japan have an effect on the parent company in the home country.
 

Representative Office

The Representative Office has no legal personality and no registration is required in Japan. Therefore, it is easy to open the office but it is impossible to open bank accounts or sign a lease agreement under its name.

When the foreign company intends to dispatch its staff to open a new rep-office in Japan, the status of intra-company transferee might be applicable to the said staff, since a rep-office has no capital nor legal personality.