Company formation in Japan does not require the owners to travel, but the process is document-heavy, involves company seals (hanko) and notarisation, and the bank account can take months after incorporation. What decides whether the structure works is not registration but the visa conditions for the manager, a real office, the extra scrutiny banks apply to foreign owners, the layered tax burden and how the company is treated in the owners’ home country.
Company formation in Japan: which structure is right for you?
For foreign investors, company formation in Japan means one of three routes: a joint-stock company (KK), a limited liability company (GK) or a branch of the foreign parent. In both company types the statutory minimum capital is JPY 1, one or more owners are enough and liability is limited to the contribution. A representative office needs no registration but cannot sell. In company formation in Japan the choice depends on the activity, how easily ownership should transfer and the visa requirements.
The articles must be notarised; shares are in principle freely transferable, though the articles may require board approval. An annual general meeting is held.
- At least one director with power to represent
- Financial results must be published
- More detailed organs for large companies
No notarisation of the articles; internal rules are set freely in the articles. No general meeting and no duty to publish results; transfer of a membership interest needs the approval of all members.
- Profit may be shared differently from capital
- Cannot be offered to the public
- Common choice of foreign groups
No capital is required; the parent is liable without limit for all debts. A branch can open bank accounts and lease property in its own name.
- At least one representative must live in Japan
- Cannot be converted into a KK
- The parent’s documents are entered in the register
A representative office is limited to preparatory work such as market research, information gathering and publicity; it cannot sell, and it generally cannot open accounts or sign leases in its own name. General and limited partnerships are legal entities but partners bear unlimited liability, so they are rarely chosen. A prior inward-investment notification to the Bank of Japan is needed in certain sectors, whatever the form.
How does company formation in Japan work, step by step?
OzbekCPA coordinates the formation with its team in Japan: the document list is issued, the articles are drafted, home-country attestations and translations are arranged, the registry filing is made and the bank opening is supported. In company formation in Japan the company comes into existence on registration, and the filing date is the incorporation date. Only attorneys and judicial scriveners may file the registration as agents.
- Weeks 1–2Structure, name and activityOwners, directors, capital, address, activity and financial year are settled; the name is checked against the register for identical names.
- Weeks 2–4Owner documents and articlesA corporate owner’s registry certificate and signing authority are prepared with a notary or consular attested statement in the owner’s country; directors need signature certificates. The draft articles and the beneficial-owner statement are prepared.
- 1 dayNotarisation (KK)The KK’s articles are notarised by a Japanese notary; a GK does not have this step.
- A few daysPayment of capitalCapital is paid into the founder’s or director’s account; a bank custody certificate is not required and an account statement with a director’s declaration is enough. If all founders are overseas, receipt of payment can be delegated to a third party.
- 3 business days from filingRegistration and sealThe filing is made to the Legal Affairs Bureau and the company seal is registered; KK and GK registrations are processed with priority (24 hours for fully online filings meeting the conditions). The registry certificate and seal certificate are obtained in about two weeks.
- After formationNotifications and bank accountNotifications go to the tax office, prefecture and municipality, labour and social-insurance offices; the bank account takes about 1–3 months.
An investor who opens a branch instead of completing company formation in Japan registers it in the form of the most similar Japanese company type, with the parent’s documents supported by attested statements; this takes about two months. Deadlines after registration are short: social-insurance notices within 5 days of hiring and labour insurance within 10 days.
Is a local partner, local manager or nominee director required?
Not legally, but in practice banks and the visa process value local presence. Company formation in Japan needs no Japanese owner; a foreign owner may hold all of the company. Since 2015 a representative director of a KK or GK need not live in Japan; for a branch, at least one representative must be resident. Being a director gives no residence or work right.
In practice, a local representative director (sometimes a nominee) is described as typically used for banking and similar tasks. Every registered director carries liability for the role, beneficial owners are recorded and banks ask who actually decides. Moreover, in company formation in Japan, for a remotely run company the place where decisions are taken determines whether it risks being treated as resident in another country.
Capital, seals and office
Company formation in Japan has a statutory minimum capital of JPY 1; however, the “Business Manager” residence status needs at least JPY 30 million of capital or investment. The beneficial-owner statement is accepted by the notary at incorporation. For a KK the representative director’s address appears in the register; on request the certificates can show only the ward or municipality.
The seal (hanko) takes the place of a signature in Japan: the registered company seal is used for incorporation, the bank account and important contracts, while a bank seal and a square seal for daily documents are kept separately. The registered seal is filed with the Legal Affairs Bureau at registration.
For company formation in Japan combined with a manager’s visa, an exclusive physical office independent from other companies is expected; a virtual office, coworking space or office shared with a related company lowers the chance of obtaining the status. The lease should state business use and name the company as tenant.
How much does company formation in Japan cost?
The items below for company formation in Japan show fixed and recurring burdens taken from guide sources. Formation service, notary, registration and translation fees are settled by proposal, so no amounts are given.
| Item | Amount |
|---|---|
| Statutory minimum capital (KK and GK) | JPY 1 |
| Capital or investment for the manager status | ≥ JPY 30 million |
| Registration and licence tax | paid at formation |
| Notary, translation, home-country attestations | by proposal |
| Per-capita inhabitant tax (Tokyo, capital ≤ JPY 10 million, ≤ 50 staff) | JPY 70,000 / year |
| Per-capita inhabitant tax (capital JPY 10–100 million, ≤ 50 staff) | JPY 180,000 / year |
| Minimum hourly wage (Tokyo, fiscal 2025) | JPY 1,226 |
| Accounting, payroll, office rent | by proposal |
The per-capita levy is independent of income, so a loss-making company also pays it. Beyond this, fixed asset tax is 1.4% and city planning tax 0.3% on owned property. For a branch, the difference is the attestation and translation of the parent’s documents.
After formation: tax, accounting and filings
Corporate tax. Company formation in Japan brings a combination of national and local taxes: corporate tax, local corporate tax, inhabitant tax, enterprise tax and special enterprise tax. For non-SME companies the combined effective rate is about 30.64% for financial years starting after 1 April 2026 (29.74% before); for SMEs, about 34.43% on the part of annual income above JPY 8 million. A Special Defense Corporate Tax (4% of corporate tax after a JPY 5 million deduction) is added from financial years starting on or after 1 April 2026.
SME relief and losses. Companies with capital of JPY 100 million or less that are not wholly controlled by a large company get a reduced 15% corporate tax rate on income up to JPY 8 million (extended to 31 March 2027). Losses are carried forward 10 years if blue-form returns are filed; for large companies utilisation is capped at 50% of income.
Withholding. Domestic withholding on dividends, interest and royalties to a non-resident company is generally 20% (about 20.42% with the 2.1% surtax). The treaty with Turkey shows 10% or 15% for dividends, 10% or 15% for interest and 10% for royalties; the column mapping comes from a secondary source and should be confirmed. A treaty application form and a residence certificate are needed to claim treaty rates.
Shareholder debt and interest. Interest on borrowing from a foreign controlling shareholder above three times equity is not deductible. Interest above 20% of adjusted taxable income is also disallowed (no limit if net interest is up to JPY 20 million). Transfer pricing and controlled-foreign-company rules apply.
Consumption tax. The standard rate is 10% and the reduced rate 8%. A business with taxable sales up to JPY 10 million is exempt, but a new company with capital of JPY 10 million or more is not. Input credit requires purchases from registered qualified-invoice issuers; for non-registered sellers the creditable share is 50% from 1 October 2026.
Accounting. After company formation in Japan, Japanese GAAP is the basis for tax. Monthly bookkeeping is standard and at least annual statutory financial statements are required; conversion to other standards can be done annually. Global minimum tax rules apply to large groups (IIR from 2024; UTPR and domestic top-up tax from 1 April 2026).
- Within 2 months of formation: tax-office incorporation notice
- Salary-paying office: notice within 1 month
- Tokyo, 15 days: prefecture and municipality notice (varies locally)
- Blue-form application: 3 months after formation or end of first year, whichever is earlier
- 2 months after year-end: corporate and consumption tax return and payment
- Interim: a return for the first 6 months if the year exceeds 6 months
- Salary withholding: by the 10th of the following month
Work visa and employer obligations
Company formation in Japan gives the manager no right to live there. A foreign person running the company needs the “Business Manager” status: an exclusive physical office, at least JPY 30 million of capital or investment and at least one full-time employee (such as a Japanese national or permanent resident). Intra-company transfer, engineer/specialist status and the points-based highly skilled professional route are alternatives. A startup visa allows up to two years of preparation while office and scale requirements are completed. For information only: residence-by-investment routes exist, but our firm does not offer this service.
The process starts with a Certificate of Eligibility applied for in Japan at the immigration office; with it, a visa is generally issued in five working days at the consulate, and entry must follow within three months. Short visits for market research or negotiations are allowed, but working or earning income is not.
Company formation in Japan also brings employer costs. Social insurance contributions are shared between employer and employee: health insurance 9.91% in Tokyo, pension 18.3% and employment insurance 1.55% (employer 0.95%, employee 0.6%); work-accident insurance is 0.25% to 8.8% by industry and paid by the employer. The minimum hourly wage in Tokyo is JPY 1,226 (fiscal 2025). Statutory working hours are 8 a day and 40 a week; overtime needs a prior agreement filed and is capped at 45 hours a month and 360 hours a year.
After company formation in Japan, dismissal requires at least 30 days’ notice or 30 days’ pay in lieu, and must be objectively reasonable. Annual paid leave runs from 10 to 20 days by service. No social security agreement is in force between Turkey and Japan; negotiations are under way, so a seconded employee may face double contributions.
The home-country dimension: what decides the outcome
Japan has 90 tax treaties. A treaty allocates taxing rights; residence, controlled-foreign-company rules and the taxation of dividends are decided by the owners’ own country. Each point below rests on facts to settle before formation.
- Place of effective management. After company formation in Japan, a company whose decisions are taken in another country is treated in many countries as resident there and taxed on its worldwide income. A registered address or nominee director does not answer this; a real manager in Japan, decision records and a physical office are the only defence.
- Two sides of a high rate. A combined rate above 30% comfortably meets the minimum-tax condition (15% in many countries) for participation exemptions in the owners’ country and mostly keeps controlled-foreign-company rules out. The cost of that is a heavier total burden, so the choice should be made on the total burden in both countries.
- Intra-group loans and invoices. Shareholder loans meet the three-times equity limit and the 20% interest cap; service and licence fees are assessed under withholding and transfer pricing together. The same transaction is reviewed in the owners’ country; the agreement is designed for both sides together.
- Branch or company? Branch profit is the parent’s own income: participation exemptions in the owners’ country do not apply to a branch, and the tax paid in Japan is credited against the parent’s tax. A company instead engages the dividend exemption and controlled-foreign-company rules.
- Treaty rate and residence certificate. To use a reduced treaty rate, the recipient’s residence certificate and the Japanese treaty application form must be on file at the time of payment, and dividend timing should follow the owners’ filing deadline.
Frequently asked questions
Do I need to travel to Japan for company formation in Japan?
Not for formation: owner documents are attested in your own country and the registration is filed through an agent. A visit can help with bank account opening and the manager’s visa, where an office and meetings are expected.
Can a company be the owner in company formation in Japan?
Yes. The parent’s registry certificate and signing authority are submitted with a notary or consular attested statement and, where needed, a Japanese translation.
Is a local owner or local manager required for company formation in Japan?
No. A foreign owner may hold all of the company and the representative director need not live in Japan. For a branch one representative must be resident. In practice a local representative may be used for banking.
What is the minimum capital for company formation in Japan?
The statutory minimum is JPY 1. For the “Business Manager” residence status, however, at least JPY 30 million of capital or investment is required.
KK or GK for company formation in Japan?
A KK has notarised articles, an annual general meeting and published results; a GK sets its internal rules freely in the articles. Foreign groups mostly choose the GK for flexibility and lower cost; a KK suits cases needing share-transfer flexibility or a later public offering.
How long does a bank account take after company formation in Japan?
About 1–3 months is quoted. The bank asks for the company profile, beneficial-owner information, the purpose of the account and details of the business; incomplete or late answers can be judged unreliable.
Can a virtual office be used for company formation in Japan?
An address is needed for registration, but the manager’s status expects an exclusive physical office; a virtual office, coworking space or an office shared with a related company raises the chance of refusal.
How does OzbekCPA support company formation in Japan?
OzbekCPA coordinates the formation and bank stages with its team in Japan and handles: modelling the combined corporate tax and withholding together with the owners’ home-country tax result; preparing and attesting owner documents; designing loan, service and licence agreements with the parent under both countries’ rules; and the tax assessment of the Japanese company in the owners’ country. After formation, accounting, payroll and filings run through the team in Japan. Residence-by-investment or citizenship services are not offered; permit work is limited to employment and residence permits tied to companies.
OzbekCPA advises investors and companies worldwide on company formation in Japan: choice of structure and tax effect, attestation and translation of documents, design of intra-group agreements and the assessment of the structure in the owners’ own country. For a structure review based on your activity and ownership, contact us. Related reading: Effective Management and Control · Foreign Participation Gains Exemption: Decision 11257 · Transfer Pricing in Turkey.
