“Can a foreigners set up an LLC in Japan?”
“Is it hard to establish a company in Japan?”
If you’ve come across this article, you’re thinking about setting up a company, an LLC in Japan as a foreigner. You maybe just wanting to live in Japan with your current business in your country. You may have an idea for a new business in Japan that hasn’t yet been developed.
Whatever your reasons, there are many factors to consider. Let me explain the LLC overview in Japan and help you prioritize what matters as a foreigner founder.
Contents
- 1 What is LLC in Japan?
- 2 Gōdō Kaisha vs. Kabushiki Kaisha
- 3 Can a foreigner form an LLC in Japan just like a Japanese?
- 4 What Foreigners Need Before Setting Up an LLC in Japan
- 5 You’ll Need the Right Visa to Manage a Company in Japan
- 6 Requirements for the Business Manager Visa
- 7 Documents Needed for Foreigners to Establish a Company in Japan
- 7.1 Registration Application Form
- 7.2 Supplementary Registration Documents
- 7.3 Articles of Incorporation (定款)
- 7.4 Bank Account for Capital Deposit and Capital Payment Certificate
- 7.5 Acceptance of Appointment Letter
- 7.6 Seal Registration Certificate or Signature Certificate
- 7.7 Company Seal and Seal Registration Form
- 7.8 Registration License Tax Revenue Stamps and Stamp Attachment Form
- 7.9 List of Documents for registering LLC in Japan
- 7.10 Bank Account for Capital Deposit and Certificate of Capital Deposit
- 7.11 Seal Registration Certificate or Signature Certificate
- 8 Step by Step Procedure to set up an LLC in Japan as a Foreigner
- 8.1 Step 1: Decide on the Company’s Basic Details
- 8.2 Step 2: Draft and Authenticate the Articles of Incorporation
- 8.3 Step 3: Deposit the Capital
- 8.4 Step 4: File the Incorporation Application at the Legal Affairs Bureau
- 8.5 Step 5: Submit Notifications to Relevant Authorities
- 8.6 Step 6: Apply for a Business Manager Visa
- 8.7 Approval and Start of Business Management for your LLC in Japan
- 9 Costs for Establishing an LLC in Japan as a Foreigner
- 10 FAQ About setting up LLC in Japan as Foreigner
- 11 Summary: Key Requirements for Setting up an LLC in Japan as a Foreigner
What is LLC in Japan?
An LLC in Japan, or “Gōdō Kaisha” (合同会社), is a business structure that offers flexibility and limited liability to its owners. It is similar to the Limited Liability Companies (LLCs) found in other countries but has distinct characteristics that make it an attractive choice for both domestic and foreign entrepreneurs.
In Japan, an LLC allows owners (known as “members”) to limit their personal liability for the company’s debts. This means that, in most cases, their personal assets are protected from any business-related financial issues.
What are the characteristics of an LLC in Japan?
Key features of an LLC in Japan include:
- Limited Liability: Members are generally only liable for the company’s debts up to the amount of their investment in the business. This structure helps shield personal assets, making it a safer option for entrepreneurs.
- Flexible Ownership and Management: An LLC can be owned by a single member or multiple members. Unlike larger corporations, it does not require a complicated board structure, offering more direct control and a streamlined management process.
- Easier Setup: Compared to other business structures like the Kabushiki Kaisha (K.K.), an LLC has simpler setup requirements and lower capital investment. This makes it a practical option for small businesses or startups, especially for foreign entrepreneurs.
- No Need for a Japanese National Shareholder: Foreigners can own 100% of an LLC, which is not the case for some other company types in Japan that may require a Japanese national as a shareholder.
- Tax Efficiency: LLCs in Japan benefit from the country’s corporate tax rates and the flexibility to distribute profits among members, offering potential tax advantages depending on the structure of the business.
While the LLC structure is simple and appealing for small businesses and entrepreneurs, it does come with certain legal and regulatory obligations, including tax filings and annual reports. Additionally, foreign entrepreneurs must consider their visa status and residency requirements when establishing an LLC in Japan.
Gōdō Kaisha vs. Kabushiki Kaisha
When starting a business in Japan, one of the key decisions you’ll make is choosing the right company structure. Two of the most common types of companies are Gōdō Kaisha (LLC) and Kabushiki Kaisha (K.K.). Each has its own advantages, and the choice depends on your business needs, size, and goals.
Here’s a comparison between the two:
Ownership and Structure
- Gōdō Kaisha (LLC): In a Gōdō Kaisha, ownership is flexible. The company can have one or more members (owners), and there are no requirements for a board of directors. The members have the ability to directly manage the company, which makes the structure simpler and more efficient for small businesses and startups.
- Kabushiki Kaisha (K.K.): A K.K. is more similar to a corporation in the West. It requires at least one shareholder and must have a board of directors, which can be an advantage for larger businesses or those looking to expand. The K.K. can issue shares and is better suited for businesses seeking external investors or those planning to go public in the future.
Liability
- Gōdō Kaisha (LLC): Members of a Gōdō Kaisha have limited liability, meaning they are not personally responsible for the company’s debts beyond their investment. This structure offers strong protection for business owners’ personal assets.
- Kabushiki Kaisha (K.K.): Like an LLC, a K.K. also offers limited liability to shareholders. However, because it is typically larger and may involve more complex financial transactions, the management structure is more formal, and shareholders have more oversight over the company’s actions.
Capital Requirements
- Gōdō Kaisha (LLC): One of the most attractive features of an LLC is its low capital requirement. There is no minimum capital needed to establish an LLC, making it a more affordable option for small businesses or startups.
- Kabushiki Kaisha (K.K.): A K.K. requires a minimum capital investment of ¥1, which is nominal. However, most K.K.s tend to raise significantly more capital, especially if they are aiming to attract investors or plan to expand quickly. The formalities involved in setting up a K.K. are typically more costly and time-consuming than with an LLC.
Taxation
- Gōdō Kaisha (LLC): LLCs benefit from Japan’s corporate tax structure. The taxes are generally applied based on the income and profit of the business. The distribution of profits among members is flexible, which may offer tax planning opportunities.
- Kabushiki Kaisha (K.K.): A K.K. also follows the corporate tax structure but may face higher costs due to its more complex management structure. Shareholders in a K.K. can also receive dividends, which are subject to additional tax considerations.
Simplicity vs. Formality
- Gōdō Kaisha (LLC): An LLC is often favored by foreign entrepreneurs and small businesses because it is easier to set up and manage. The minimal formalities, combined with the ability for the members to be directly involved in daily management, make it a popular choice for those looking for simplicity.
- Kabushiki Kaisha (K.K.): A K.K. is more complex and formal, involving a board of directors and more detailed corporate governance. This structure is better suited for businesses that plan to grow large, attract investors, or eventually become publicly traded.
Suitability for Foreign Entrepreneurs
- Gōdō Kaisha (LLC): Foreigners can fully own a Gōdō Kaisha, and the process of setting up the company is generally easier compared to a K.K. It is a popular choice for foreign entrepreneurs who want full control over their business.
- Kabushiki Kaisha (K.K.): While foreigners can also own a K.K., the process is more formal and may require more paperwork, especially when it comes to establishing a board of directors and handling shareholder agreements.
LLC or K.K. : Which is Right for Your Business?
The decision between a Gōdō Kaisha (LLC) and a Kabushiki Kaisha (K.K.) ultimately depends on your business goals. If you’re a small business or startup looking for flexibility, simplicity, and low cost, an LLC might be the right choice. However, if you plan to scale your business, raise capital, or eventually go public, a K.K. could be a better fit.
Consider the size of your business, the level of formal management you need, and whether you plan to attract investors or eventually list your company on the stock exchange. Both structures offer limited liability protection, but the setup, operation, and growth potential differ significantly.
Can a foreigner form an LLC in Japan just like a Japanese?
The short answer is yes, foreigners can form an LLC in Japan following a similar process to Japanese nationals.
If you’re a foreigner looking to start a business in Japan, the good news is that the process is almost identical to what Japanese nationals follow. There are some additional requirements when submitting documents, but as long as you meet these, the overall process is very similar.
Because of these additional documents required, I would highly recommended to have a Japanese partner who can act as an interim CEO to help set up your LLC. And you will know why this is the case by the time you finish reading this article.
But let’s look at the specific requirements that foreigner founder needs to fulfill before setting up a company in Japan.
What Foreigners Need Before Setting Up an LLC in Japan
Here is a list of what you need as a foreigner before setting up the actual LLC in Japan.
- Visa (Business Manager Visa or other appropriate visa)
- Japanese Address (Registered office address in Japan)
- Capital (Initial capital for the business, typically 1 yen minimum, but 500,000 yen recommended for the visa)
- Bank Account (A Japanese business bank account for capital deposit and business transactions)
- Local Representative (A local resident or Japanese national if required)
- Business Plan (A solid business plan to present with your visa application)
You’ll Need the Right Visa to Manage a Company in Japan
Once you’ve established your company, if you want to actively manage it, you’ll need a visa that allows you to engage in business activities. Japanese immigration law requires foreign nationals to stay within the limits of their visa status, so it’s important to ensure your visa permits you to manage a company.
While “visa” and “residency status” are technically different, people often use “visa” to refer to both. In this article, we’ll use “visa” for simplicity.
Types of Visas for Business Management
There are two main visa categories for managing a company:
- Resident Status (e.g., Permanent Resident, Spouse of a Japanese National)
- Activity-Based Status (e.g., Business Manager Visa)
If you’re on a visa that doesn’t allow business activities (like a student visa), you can prepare to start the business but can’t serve as CEO or take a salary until you change your status to one that allows business management.
What the Business Manager Visa Covers in Japan
If you have a Business Manager Visa, you can manage or oversee a business in Japan. This visa lets you make decisions on the company’s operations, supervise the business activities, and manage departments or other essential functions.
To qualify for this visa, you need to be actively involved in managing the company and receive compensation for your work. Without it, you would be considered to be working illegally.
Managing a Company in Japan from Abroad
If you’re managing your business remotely from abroad, you don’t need a visa since you’re not residing in Japan. However, if you’re visiting Japan for short meetings or communication, a Short-Term Stay Visa will work. Just keep in mind, if you’re getting paid for your management role while in Japan, even temporarily, you’ll need a Business Manager Visa.
For more detailed information, check out the Japan Immigration Services Agency’s guidelines on Business Manager Visas and other visa types.
Residency Status (居住資格) | Activity Status (活動資格) | Notes |
永住者 (Permanent Resident) | No restrictions | Can engage in business management activities without limitations. |
日本人の配偶者等 (Spouse of a Japanese National) | No restrictions | Can engage in business management activities without limitations. |
永住者の配偶者等 (Spouse of a Permanent Resident) | No restrictions | Can engage in business management activities without limitations. |
定住者 (Long-Term Resident) | No restrictions | Can engage in business management activities without limitations. |
経営・管理 (Business Manager) | Required for foreign nationals on certain activity visas like Business Manager Visa. | |
Other Residency Status (資格外活動) | Restricted Business Activities | Foreign nationals with other residency statuses (e.g., Student Visa) cannot manage or receive compensation for business activities. |
留学ビザ (Student Visa) | Cannot engage in business activities | Can prepare for setting up a company, but cannot serve as a CEO or receive remuneration. |
Change of Visa Required | A change to a proper business-related visa, such as a Business Manager visa, is necessary to engage in business activities. | |
Specific Activity Qualifications | Business Management Definition | Engaging in significant decisions, business execution, or serving as an officer (e.g., CEO, director). |
Management Definition | Engaging in internal organization management at a department or equivalent level (e.g., department head). | |
Short-Term Stay (無報酬の短期滞在) | Can engage in short-term meetings or coordination | Must hold a Short-Term Stay Visa if there is no payment involved. If payment is made, the Business Manager Visa is required. |
Conditions for Obtaining a Residence Visa to Manage a Business in Japan
When planning to start a business in Japan as a foreigner, obtaining the right residence visa is essential. Specifically, the Business Manager visa (経営・管理ビザ) is the most common route. Here’s a breakdown of the conditions you must meet:
Requirements for the Business Manager Visa
To qualify for the Business Manager visa, applicants must fulfill the following criteria:
- Secure a Business Location
You must have a physical business location in Japan, which meets the following requirements:- It must be clearly separate from your home.
- It must be registered under your company’s name.
- The rental agreement must specify “business use.”
- It should have adequate facilities and human resources to operate as a business.
- Virtual offices or monthly rentals are not acceptable.
- Investment or Employment Criteria
The company must either:- Have a capital of 5 million yen or more, or
- Employ at least two full-time staff who are Japanese nationals, permanent residents, or individuals with specific long-term resident statuses (such as spouses of Japanese nationals).
- Business Stability & Managerial Capability
You must demonstrate the stability and continuity of your business, as well as your ability to manage it effectively. This requires submitting a business plan, which should include details about your products/services, revenue projections, and organizational structure.
Alternative Long-Term Residency Options
While the Business Manager visa is the most common for entrepreneurs, those seeking long-term residency in Japan may also explore options like the Permanent Resident Visa or Long-Term Resident Visa. These options come with stricter criteria, such as:
- Permanent Residents: Applicants must have lived in Japan for at least 10 years, including 5 years under a qualifying visa. They must also have a clean legal record and sufficient income.
- Spouses and Children of Permanent Residents or Japanese Nationals: Conditions related to family ties and financial support apply.
- Long-Term Residents: For those with special circumstances, such as Japanese descent or family ties, this residency option may apply.
Documents Needed for Foreigners to Establish a Company in Japan
Starting a business in Japan as a foreigner involves preparing specific documents that meet legal and regulatory requirements. In addition to the standard documents, there are unique requirements for foreigners, such as a bank account and capital payment certificate, and a seal registration certificate or signature certificate. These are explained in detail in sections 4-1 and 4-2. Below is a summary of the essential documents needed to establish a company in Japan:
Registration Application Form
This document includes essential company information such as the company name, office location, and other fundamental details.
Supplementary Registration Documents
These documents provide additional information to support the registration application. In addition to paper submissions, you may also submit these documents in digital formats like CD-R or DVD-R.
Articles of Incorporation (定款)
This document outlines the company’s rules and regulations, agreed upon by all the founders. It defines the internal structure and management framework.
Bank Account for Capital Deposit and Capital Payment Certificate
For detailed information, refer to section 4-1. Foreign entrepreneurs are required to open a Japanese bank account to deposit the capital and provide proof of payment.
Acceptance of Appointment Letter
This letter confirms the appointment of directors in a corporation (株式会社) or representative members in a limited liability company (合同会社).
Seal Registration Certificate or Signature Certificate
For detailed information, refer to section 4-2. This document verifies the official company seal or signature for legal purposes.
Company Seal and Seal Registration Form
It is standard practice to prepare three types of company seals: the representative director’s seal, the square company seal (社印), and the bank seal. The registration form is required to submit the representative director’s seal to the legal affairs office.
Registration License Tax Revenue Stamps and Stamp Attachment Form
When registering your company, you must pay a registration license tax. You can make this payment either through a financial institution or by purchasing revenue stamps at a convenience store or post office. The latter option is often easier.
List of Documents for registering LLC in Japan
The table below summarizes the necessary documents required for the registration application. Please note that if any of these documents are in a foreign language, a Japanese translation must be attached.
Required Document | Quantity Needed | Where to Obtain |
Company Registration Application Form | 1 copy | Legal Affairs Bureau Office |
Statement of Matters to be Registered | 1 set | Self-prepared |
Articles of Incorporation | 1 certified copy | Self-prepared Example |
Letter of Consent to Assume Office | 1 copy | Self-prepared |
Certificate of Capital Deposit | 1 copy | Self-prepared |
Seal Registration Certificate | 1 copy | Local Municipal Office |
Signature Certificate (if no Seal Registration Certificate) | 1 copy | Local authority in home country or home country’s embassy in Japan |
Seal Notification Form | 1 copy | Download from Legal Affairs Bureau website |
Revenue Stamp Attachment Form | 1 copy | Self-prepared |
Bank Account for Capital Deposit and Certificate of Capital Deposit
The Certificate of Capital Deposit is a document proving that the initial capital required for the company’s establishment has been deposited into the account specified by the founders. It is prepared after the deposit has been made.
The bank accounts eligible for capital deposits are regulated as follows, so not all bank branches can be used. Please ensure compliance by checking the relevant details, such as the bank’s registration certificate:
Bank Type | Eligible |
Domestic bank’s branch in Japan (e.g., Osaka Bank Nagoya Branch) | ✔ |
Domestic bank’s overseas branch (e.g., Osaka Bank London Branch, excluding local corporations) | ✔ |
Foreign bank’s branch in Japan (e.g., London Bank Osaka Branch) | ✔ |
Foreign bank’s overseas branch (e.g., London Bank Paris Branch) | ✘ |
When using option 2, if the transaction is conducted in a currency other than Japanese yen, proof of the exchange rate is required.
For option 4, founders must either open a Japanese bank account themselves or rely on an existing valid account of a collaborator who becomes a founder or director.
Opening a Japanese bank account as a foreign resident may involve strict conditions, such as holding a residence certificate or staying in Japan for over six months. This can be challenging for foreigners living abroad or on short-term stays. Collaborating with someone who already has a valid account is often a more feasible option.
Seal Registration Certificate or Signature Certificate
The Seal Registration Certificate verifies the authenticity of an officially registered seal (personal seal). The type of certificate required depends on the company structure:
- For corporations with a board of directors:
Seal Registration Certificate of the appointed representative director, showing the seal used on the Letter of Consent to Assume Office. - For corporations without a board of directors:
Seal Registration Certificate of the appointed director, showing the seal used on the Letter of Consent to Assume Office. - For limited liability companies (LLCs):
Seal Registration Certificate of the representative member, showing the seal used on the Letter of Consent to Assume Office.
If a foreign individual does not have a Seal Registration Certificate, a Signature Certificate can be used as a substitute. This certificate can be obtained from:
- Local government or notary offices in the individual’s home country, or
- Their home country’s embassy located in Japan.
Note that only certificates issued within three months prior to the registration application are accepted, so be mindful of the validity period.
Step by Step Procedure to set up an LLC in Japan as a Foreigner
Here is a six-step guide for foreign nationals establishing a Limited Liability Company (LLC) in Japan:
Step 1: Decide on the Company’s Basic Details
Start by determining the essential details of the company, including:
- Company Name: Ensure there are no identical names registered at the same location.
- Registered Address: Select a location for the head office.
- Capital Amount: The amount of initial capital.
- Business Objectives: Specify the purpose of the business.
For foreign residents with appropriate visa status, these details can generally be set freely. However, if applying for a Business Manager Visa, specific conditions (e.g., a minimum capital requirement) must be met as outlined in Section 3-1.
Step 2: Draft and Authenticate the Articles of Incorporation
Prepare the Articles of Incorporation (AoI) and obtain notarization. The AoI must include the following mandatory information to be valid:
- Company Name
- Registered Address
- Capital Amount
- Founder(s)’ Name(s) and Address(es)
- Business Objectives
- Authorized Shares
Submit the following documents to the notary public for authentication:
- Three copies of the Articles of Incorporation
- Revenue stamp fee: ¥40,000
- Seal registration certificates: One for each founder (issued within three months)
- Personal seals (jitsuin) of all founders
- Declaration of ultimate beneficial owner(s)
- Power of Attorney (if a representative attends on behalf of the founder)
- Authentication fee: ¥30,000–¥50,000 (varies based on capital amount)
- Fee for certified copies of the AoI: Approximately ¥2,000 (depends on page count)
Instead of submitting paper-based AoI, electronic AoI authentication is possible. This method saves the ¥40,000 revenue stamp fee but requires specific software and a card reader for electronic signatures.
Note: Articles of Incorporation notarization is not required for LLCs.
Step 3: Deposit the Capital
After the AoI authentication, deposit the capital into the bank account specified by the founder(s).
Refer to Section 4-1 for details on eligible bank accounts.
Prepare a Certificate of Capital Deposit, as this is required when submitting the incorporation application.
- If applying for a Business Manager Visa, a minimum capital of ¥5 million is recommended.
- For foreign residents with appropriate visas, the law allows for incorporation with as little as ¥1. However, extremely low capital can negatively impact credibility with banks and business partners.
Step 4: File the Incorporation Application at the Legal Affairs Bureau
Submit the necessary documents to the Legal Affairs Bureau with jurisdiction over your registered address. Once the application is processed, the company is legally established.
- Processing usually takes 7–10 days depending on the bureau’s workload.
- After completion, obtain a Certificate of Full Registry Details (履歴事項全部証明書) from the Legal Affairs Bureau, which will be needed for government filings and other procedures.
Templates and examples for the required documents can be found on the Legal Affairs Bureau’s website under Commercial and Corporate Registration Forms.
Step 5: Submit Notifications to Relevant Authorities
Once the incorporation is complete, you must file notifications with various government offices and agencies. Below is a list of documents typically required and their submission destinations:
Tax Office (税務署)
- Corporate Establishment Notification Form (法人設立届出書)
- Application for Blue Form Tax Return Approval (青色申告の承認申請書)
- Notification of Payroll Office Establishment (給与支払事務所の開設届出書)
- Application for Special Approval of Income Tax Payment Deadlines (源泉所得税の納期の特例の承認に関する申請書)
Prefectural and Municipal Offices
- Corporate Establishment Notification Form (法人設立届出書)
Pension Office (年金事務所)
- Notification of New Health and Pension Insurance Coverage (健康保険・厚生年金保険の新規適用届)
- Notification of Acquisition of Insured Status (被保険者資格取得届)
- Notification of Dependents for Health Insurance/National Pension (健康保険・国民年金の被扶養者届)
Labor Standards Inspection Office (労働基準監督署)
- Notification of Business Coverage under Labor Insurance (労働保険の適用事業報告書)
- Notification of Establishment of Insurance Relationship (保険関係成立届)
- Notification of Estimated Insurance Premiums (概算保険料申告書)
Public Employment Security Office (Hello Work)
- Notification of Establishment of Employment Insurance Coverage (雇用保険の適用事業所設置届): this is only if you have an employee.
- Notification of Acquisition of Insured Status (被保険者資格取得届)
In addition, ensure the following:
- Update leases from individual to corporate names if the business premises were rented under personal credentials.
- Obtain permits for industries requiring specific authorization, such as travel agencies or antique dealerships.
Detailed checklists and guides can be found on official websites, including the “2024 Guide to Company Establishment Procedures.”
Step 6: Apply for a Business Manager Visa
If you do not already possess a visa permitting business management in Japan, this is the appropriate time to apply for a Business Manager Visa.
Timing and Preparation:
Submitting your visa application before completing company establishment might lead to doubts during the Immigration Services Agency review regarding the feasibility of your business. Questions such as “Is the applicant genuinely planning to operate a company?” could result in a denial.
To improve the chances of approval, ensure that:
- The incorporation process, including registration and required notifications, is fully completed.
- All supporting documents for the visa application clearly demonstrate the company’s operational readiness.
Approval and Start of Business Management for your LLC in Japan
Once the Business Manager Visa is approved, you will be authorized to begin managing your company in Japan. This visa grants you the legal status to engage in and oversee business operations within the country.
Costs for Establishing an LLC in Japan as a Foreigner
Below is a summary of the key expenses associated with setting up a company in Japan as a foreigner. These costs primarily cover the incorporation process and may vary depending on the type of company (e.g., corporation vs. LLC) and specific requirements.
Item | Cost | Notes |
Stamp fee for articles of incorporation | ¥40,000 | Waived for electronic articles of incorporation. |
Notary certification fee | ¥30,000 (capital < ¥1 million) ¥40,000 (¥1 million ≤ capital < ¥3 million) ¥50,000 (capital ≥ ¥3 million) | Not required for an LLC. |
Transcript issuance fee for certified articles | ~¥2,000 | Based on the number of pages (¥250/page). Not required for an LLC. |
Registration license tax | ¥150,000+ (corporation) ¥60,000+ (LLC) | Higher of ¥150,000/¥60,000 or 0.7% of capital. |
Certificate of registered matters | ¥600 per copy | |
Certificate of seal registration | ¥450 per copy |
Estimated Minimum Costs for setting up a company in Japan
- Corporation: Approximately ¥250,000+
- LLC (Gōdō Kaisha): Approximately ¥100,000+
Additional Costs
These estimates cover only the incorporation process. You should also budget for:
- Initial capital investment: Amount required to start operations.
- Operational setup costs: Expenses for securing office space, utilities, and equipment.
Having a clear understanding of these expenses ensures better financial preparedness for establishing and running a business in Japan.
FAQ About setting up LLC in Japan as Foreigner
When foreigners establish a company in Japan, several questions frequently arise. Below are answers to two of the most common concerns:
Can you establish a company if the founder’s address is not in Japan?
Yes, it is possible.
Previously, at least one representative director needed to have an address in Japan. However, as of March 16, 2015, a Ministry of Justice directive allows for the establishment of companies even if none of the directors have a Japanese address.
Important Notes:
- Security Screening: In such cases, a notification must be filed via the Bank of Japan with the Minister of Finance and the relevant ministry overseeing the industry to ensure compliance with Japan’s security regulations.
- Notifications are typically submitted after company registration but may require prior submission depending on the country or business activity.
- Capital Deposit Restrictions: As mentioned in 4-1, capital cannot be deposited from an overseas bank account.
Check these requirements beforehand to avoid delays or issues.
Can you establish a company without a residence status or local support?
Yes, but it is challenging.
Without a residence status or local collaborators, you may face additional difficulties, such as:
- Finding a real estate agency willing to lease office space.
- Managing restrictions on bank accounts, as outlined in 4-1.
Recommendation:
Before initiating the setup process, consider finding a local collaborator in Japan who can help overcome these challenges.
Startup Visa Option:
Some municipalities in Japan have introduced Startup Visa programs to facilitate foreign entrepreneurs.
- Benefits:
- Allows a six-month stay for business preparation.
- Enables address registration, simplifying bank account creation and office leasing.
- Restrictions:
- Prohibits work during the visa period.
- Not available for foreigners already holding a Japanese residence status.
Action:
Consult the municipality’s website for details and eligibility before applying for a Startup Visa.
Where Can I Seek Advice About Company Formation in Japan?
When establishing a company in Japan, there are both free and paid resources available for consultation. Below is a summary of these options:
Free Consultation Resources
- Legal Affairs Bureau (Houmu Kyoku 法務局): Assistance with legal procedures for registration.
- Commerce and Industry Associations (Shoukoukai 商工会・商工会議所): Guidance for small and medium-sized enterprises.
- Japan Finance Corporation (日本政策金融公庫): Support for financing and business plans.
- Tokyo One-Stop Business Establishment Center (東京開業ワンストップセンター): Comprehensive support for starting a business in Tokyo.
Paid Consultation Resources
- Tax Accountants (Zeirishi): Assistance with tax filings and business accounting.
- Judicial Scriveners (Sihoushoshi): Support with legal documents and registration.
- Administrative Scriveners (Gyosei Shoshi): Help with permits and administrative procedures.
- Lawyers : Advice on legal and contractual matters.
- Social Insurance and Labor Consultants (Shakai Hoken Roumu Shi): Guidance on social insurance and labor regulations.
Additional Support for Foreign Entrepreneurs
Many local governments offer specialized support for foreigners starting businesses.
Examples:
- Foreign Resident Support Center (外国人在留支援センター): Operated by the Immigration Services Agency, offering consultations on residence status and legal support.
- Business Concierge Tokyo (ビジネスコンシェルジュ東京): Managed by the Tokyo Metropolitan Government, providing support for business operations and funding.
Choosing the Right Resource
Your choice of consultation service should depend on:
- Specific Needs: Determine the type of advice or service you require (e.g., registration, legal matters, financing).
- Budget: Free resources are ideal for general guidance, while paid professionals are recommended for specialized and personalized support.
For a more detailed guide on choosing the best consultation resource, you can refer to:
10 Consultation Services for Company Formation and How to Choose the Right One.
Summary: Key Requirements for Setting up an LLC in Japan as a Foreigner
Here’s an overview of the essential information regarding company formation for foreigners in Japan:
General Information
- Foreigners can establish a company in Japan through nearly identical procedures as Japanese nationals.
- A valid residence status permitting business management (e.g., Business Manager Visa, Permanent Resident, Spouse of a Japanese National, etc.) is required to run a company.
Business Manager Visa Requirements
To qualify for a Business Manager Visa, you must ensure:
- A secured business office.
- A capital investment of at least 5 million yen, or the employment of two or more full-time employees.
- Stability and continuity in the business, along with proof of the entrepreneur’s managerial capability.
Tip: To improve approval your chances, apply for the visa after completing company registration with the Immigration Services Agency.
Key Notes on Company Formation
- Attach Japanese translations to all required documents.
- Foreign bank accounts or overseas branches cannot be used for capital payments.
- A certificate of seal registration can be replaced with a signature certificate.
- If all founders reside abroad, a company establishment report must be submitted to the Ministry of Finance and the relevant minister via the Bank of Japan.
- If you lack residence status or local collaborators, prioritize finding local partners to facilitate the process.
Starting an LLC in Japan on your own can feel overwhelming with all the complexities. But teaming up with a Japanese business partner and getting advice from an expert can make the process much smoother and less stressful.
Plus, having a local partner can really help set you up for long-term success in Japan.
If you’re looking for professional guidance, feel free to reach out to me. As a business consultant, I can help you navigate the process and set your business up for success.