Setting Up a Business in Japan: Legal Entity Types and Procedures

Setting Up a Business in Japan

For CEOs considering expansion into Japan, understanding the types of legal entities and the setup procedures is critical. Japan offers a structured, transparent, and business-friendly environment—but navigating the incorporation process requires knowledge, preparation, and local insight.

Why Legal Structure Matters in Japan

Choosing the right legal entity affects taxation, liability, perception by local partners, and long-term scalability. Japan primarily offers two entity types for foreign businesses:

• Kabushiki Kaisha (KK) – similar to a joint-stock company, often preferred by established firms for credibility and investor confidence.

• Godo Kaisha (GK) – a flexible, limited liability company model similar to an American LLC, ideal for startups or smaller operations.

Understanding the distinctions helps ensure the structure aligns with your business goals, resources, and market strategy.

Key Steps for Setting Up a Business in Japan

1. Decide on Your Business Structure

Assess your business size, risk tolerance, and branding needs to choose between KK and GK.

2. Secure a Registered Office Address

You will need a physical address in Japan to incorporate. Many companies use virtual office services during initial setup.

3. Prepare and Notarize Articles of Incorporation

For KK entities, these documents must be notarized. GK entities are not required to notarize but still need clear documentation.

4. Deposit Capital into a Japanese Bank Account

Initial capital (as low as 1 yen in theory) must be deposited into a temporary account under the founder’s name.

5. File for Company Registration

Submit all documents to the Legal Affairs Bureau. Registration usually takes 1–2 weeks, after which you’ll receive your company registration certificate.

6. Apply for Business Licenses (if needed)

Certain industries require specific permissions—especially food, finance, real estate, or healthcare.

7. Register for Taxes and Social Insurance

Once registered, your company must notify the local tax office and enroll in appropriate labor/social insurance systems.

Timeline and Costs

Setting up a company in Japan typically takes 4–6 weeks, depending on preparation and paperwork. Incorporation costs can vary but often range from ¥200,000 to ¥300,000 JPY for a KK, slightly less for a GK.

Final Thoughts: Start with the Right Foundation

Establishing a legal entity in Japan is more than a paperwork exercise—it’s a strategic move. Whether you choose KK for long-term positioning or GK for initial agility, the key is to get the foundation right. Our team supports foreign CEOs through every step, from legal setup to operational launch.

Ready to set up your business in Japan?