Types of Starting business in Japan
The Types of Starting business in Japan are as below;
1. Representative Office
Fitting to the preparatory stages of your business launch in a small scale to study Japanese markets and plan for business structure etc. in future. Representative Offices can be easily set up without registration.
Representative offices are, however, not permitted to get involved in any of actual sales transactions in Japan. Furthermore, a representative office can neither open a bank account nor make lease contracts of real estates for office etc. as a legal entity as such. Therefore, you need a representative who makes such agreements/contracts on an individual basis.
2. Branch Office
Ｉｎ order to operate your business actually involved in any kind of transactions in Japan, you need to set up a branch office or a subsidiary office. A branch office can be more easily set up than a subsidiary office, which only needs to locate an office, assign a representative of the office and be registered with needful information.
Unlike a representative office, it can open a bank account and make a lease contract of real estates for its office.
However, a branch office is regarded as a local organization that operates business transactions upon authorization by the head quarter in a foreign country.. Therefore, all the liabilities and credits as outcome of its business operations and transactions are to ultimately belong to the head quarter.
3. Subsidiary Company
To be a legal entity in Japan, which operates business in all kinds of transactions, you need to set up a subsidiary company in the form of Kabushiki Gaisya (KK – a stock company) or Godo Gaisya (LLC – a limited liability company).
A subsidiary is regarded as an independent incorporation from the head quarter, all the liability and credits belong to itself as well as the other common Japanese incorporations.
There would be other forms of incorporating than a subsidiary company is to set up a joint venture company with a Japanese company, or an investment company by having your own equities as a partner of Japanese investors.
Other methods besides the establishment of a subsidiary by which a foreign company may invest in Japan are the creation of a joint venture company with a Japanese company or an investment company as partners.
General flow of procedures for establishing a Kabushiki-Kaisha
1. Determination of profile of joint-stock corporation to be established
2. Examination at the Legal Affairs Bureau of similar corporate names
3. Preparation of joint-stock corporation’s articles of incorporation
4. Acquisition of registration certificates, etc. for parent company, and preparation of affidavits regarding profile of parent company and affidavits regarding signatures of representatives of parent company (affidavits must be attested by a public notary in equity participants own countries
5. Notarization of joint-stock corporation’s articles of incorporation by Japanese notary public
6. Application to bank for capital custody and issue of capital custody certificate
7. Remittance of joint-stock corporation capital to special bank account
8. Appointment of directors and other officers, such as representative directors and auditors
9. Examination by directors and auditors of legality of establishment procedures
10. Application to the Legal Affairs Bureau for registration of joint-stock corporation establishment (joint-stock corporation establishment date); registration of company seal with the Legal Affairs Bureau
11. Acquisition of certificate on registered information and company seal registration certificate (approx. two weeks after application for registration)
12. Opening of bank account under company name
13. Notification of stock acquisition to the Bank of Japan
(notification prior to company establishment may be required in certain sectors)
Required Documents and the Details to Decide in the Articles of Incorporation
To be able to set up a company in Japan, it is necessary to gather the require documents and decide the following basic elements :
Required documents for a foreign individual
Seal certificate (inkan shomeisho) (issued within 3 months) of each investor and director.
If an investor also becomes a director, two certified copies are required.
It is possible to get a seal certificate (inkan shomeisho) at a local city hall if you register yourself as a resident in Japan.
A seal certificate can be replaced by a signature attestation (notarized signature) certified by the Embassy/Consulate in Japan of your own country or by a notary public of the country if the person lives overseas.
Signature (or seal) of each investor and director is required on the Articles of Incorporation and other required documents.
One of the investors personal bank account and its passbook (tsucho) / bank statement for the deposit of capital (new account can be opened or existing account can be used. Postal saving account, Internet banks such as Shinsei, Citibank, Japan Net bank, E-bank, etc. are also accepted)
Company seal that needs to be registered at the registry office
Required documents for a foreign company
Registry certificate of the parent company issued within 3 months (original or notarized copy if the original can not be sent)
Notarized Signature attestation of the parent company’s representative. If the parent company’s representative will also become a director of the Japanese subsidiary, 2 notarized copies are required.
Seal certificate (inkan shomeisho) (issued within 3 months) of each director (and private investor if there is any). If a private investor also becomes a director, two certified copies are required.
It is possible to get a seal certificate at a city hall if you register yourself as a resident in Japan. A seal certificate can be replaced by a signature attestation certified by the Embassy/Consulate in Japan of your own country or by a notary public of the country if the person lives overseas.
Signature (or seal) of the Representative of the parent company and each director is required on the Articles of Incorporation and other required documents (the originals need to be sent to Japan).
The Representative Director’s personal bank account and their passbook (tsucho) / bank statement to be used for the deposit of capital (new one can be opened or existing account can be used. Postal saving account, Internet banks such as Shinsei, Citibank, Japan Net bank, E-bank, etc. are also accepted).
Company seal that needs to be registered at the registry office
Certificate of register:￥500
Certificate of registered seal-impression:￥450
【Setting up a Company in Japan】
Certificate of register:￥500
Certificate of registered seal-impression :￥450
Cerfified copy of the articles of incorporarion:￥250 (per sheet)
FAQs for Incorporation
Q: What kind of items do I have to decide first when setting up a company in Japan?
A: If you are setting up a company, you need to generally determine below items.
①the business name,
②Address of head office
③purposes of your business
④amount of capital
⑤total number of authorized shares
⑥total number of sharesissued, directors
Q: What kind of documents do I need?
A: It depends on cases,but generally speaking,Certificate of Seal,certificate of funds of capital,and information of the company are important.
Q: How long will it take to set up a company?
A:it depends on cases.
The flow of the procedures to set up a company is generally above as I wrote.
The first step is determining name,member,location and other information of the company.
And second, starting the creation and authentication of the articles of incorporation.
The next step is execution of capital investment.
Capital investment shall be all completed before incorporation of a company.
Upon completion of the prior steps, you may apply for registration of incorporation of your company.
The review of the application procedures for setting up a company will be generally completed in one to two weeks upon submitting the registration application documents to the Legal Affairs Bureau.
When the review process by the Legal Affairs Bureau is completed, you will have certificate of registered matters of the company. With this certificate, you can confirm the existence and the details of your company.
Q: How many shareholders and directors do we need to have for setting up a company?
A: It is required to have at least one shareholder and one (representative) director, and if the shareholder and director is same individual, the same individual can hold both positions.
This means that if you put your money in a company and become a director, you can set up a company by yourself alone.
Q: Do I need to have a Japanese national as a shareholder or director of a company?
A: There are no restrictions on nationality under the laws and regulations in Japan. As a rule, shareholders or directors do not have to be Japanese nationals.
Foreign resident or a foreign company can set up a company in Japan.
They have to have an address in Japan before,but they don’t have to have an address in Japan now by revision of Company Act.
Q: Are there any initial minimum capital requirements when setting up a company in Japan?
A: There are no minimum capital requirements and you can establish a company with capital from 1 yen.
Nevertheless, if the amount of paid-in capital is small, it is often difficult to gain the trust of external parties and there is a risk of becoming insolvent soon after setting up the company.
The amount of capital depends on the type of business, but we recommend you to start with a certain level of capital.
It seems that many foreign-affiliated companies in Japan typically specify their capital to be 5 million yen or more.
Because basically at least over 5 million yen shall be necessary to have manager/investor visa .
Q: Do I put up money as capital after setting up a company?
A: No.It is required to put up money as capital prior to setting up a company.
If capital is contributed in the form of money, it is, in principle, required to deposit the money into the bank
account of the incorporator (person who is going to be a shareholder after establishment of the company).
But the type of capital is not limited to cash but includes real estate, movable assets such as automobiles, and credit such as loans are also allowable as capital.
Q: What are the benefits of asking a Solicitor to undertake the incorporation procedures of my company?
A: Certainly you can proceed incorporation process by yourself .
But people generally ask Solicitor to take care of it,since the series of procedures is complex,difficult,and requires accuracy.
If you ask a Solicitor to undertake the incorporation procedures of your company, you can receive the following support.
①Advice on details of company which is suitable to your business,relevant laws and regulations and a review of legal documents with respect to the operation of your company
②Advice on preparation of a seal impression or other required documents for incorporation
③Preparation of documents that need to be signed to incorporate a company such as the articles of
④Acting as an agent to make applications to public offices for such matters as authentication of articles of incorporation and supporting for registration of incorporation of your company
⑤Advice on the Foreign Exchange and Foreign Trade Control Law, such as remittance of funds
⑥Applying Investor/Manager visa on behalf of client
For further information with respect to Japan immigration or to find out if you or a company employee is eligible for temporary or permanent relocation to Japan, we invite you to contact our experienced Japan immigration lawyers by calling the Frontier Immigration Legal Office at +81-6-6375-2313 or by clicking here: “Contact Us”.