Would you like to start a business in Japan?

  If you’ve got the entrepreneurial spirit and thinking of starting a business in Japan, Administrative scrivener (Gyosei-shoshi Lawyer) is the one who you should make a first contact to. It would be happy for me to take care of small business owners.

  When you start a business, you’ll need to prepare certain legal documents in Japanese. Those documents depend on what type of organizational form you choose.

  But don’t worry, I will make those legal documents for you and all you have to do is focusing on the running a business and making profit for the better future.

  This web page provides some tips and guidance for new business owners. I will provide full English communication and support for this starting procedure. Please call or E-mail me when you are thinking about starting up a business in Japan!

    *Nation-wide service available.

1-1. Basic matters before starting a business

  Every single foreign national has a certain status of residence corresponding to their purpose of stay. Those who have a status of "Permanent resident" "Long Term resident", "spouse or child of Japanese national" may start business without any restriction. If you don’t have these status, you must apply for appropriate status of residence before engaging business activities in Japan.

This web page provides the information for those who have an appropriate working status to start up a company. And the guidance is for people who have already lived in Japan.

1-2. Business structure

  New business owners have to decide business structures before working on the document preparation. Major two types are "Stock Company" and "Japanese Limited Liability Company (LLC)".


Comparison Table
Stock Company and Limited Liability Company(LLC)

  Stock company is the most widely known and common form of incorporation. Limited Liability Company is still new in Japan and not widely known. But it is only a matter of time until the name becomes common knowledge. It is worth considering for simple and quick formation of establishing the company.


1-3. About private stamp registration (Seal registration)

  The incorporator(person who decide the overall outline of the company) and director(person who is responsible for running the business) must provide the certificate of the stamp registration. You can register the stamp (seal) at municipal city office where you applied for alien registration card. Your name will be registered only in Katakana (Japanese letter). And you need to decide what Katakana name you register in the Legal Affairs Bureau.


1-4. About bank account

  It is necessary to prepare a document that is certifying the amount of stated capital has been deposited to a bank account in Japan. A copy of the bankbook which is held under the name of incorporator is used for this purpose.
This account is for the purpose of depositing the capital fund only before establish the company and it is different from the corporate bank account which you probably make after the completion of the establishment.

2-1. Requirements or Licenses

  This is very important that some business may be started without fulfilling any special requirements or licenses, while others need authorization from a certain government agencies or notification needs to be submitted to related public office.

Therefore it is important to check if you need to obtain authorization from the government-agencies before starting a business. Again, this is very important.

If your business needs to get appropriate authorization, you must satisfy the conditions for acquiring the license or approval, such as amount of capital, amount of assets, employment of full-time licensed personnel, business area, and office location and floor plan. In some cases, you must write those statements in the Articles of Incorporations.

If you neglect those checking process, you may not be able to operate your business while on the other hand the company set-up is somehow completed. Making company and obtaining proper authorization is different matter.

For example, It is possible to establish a company with capital fund of 1 Yen, and register the head office at your residential place, but you can not operate "general manpower agency" since it does not meet the requirement to obtain the authorization.

Administrative scrivener (Gyosei-shoshi Lawyer) is the most appropriate specialist who you can relay on to get those business authorization and approvals.

Some examples of business requiring authorization

  There are many other authorizations. It may take months or more to obtain the permission. You had better to get the information in the early phase of the planning the business.

3-1. Process

  Following is the chart for the making process of a stock company. Please look through the brief introduction of the steps.


3-2. Preparation

• Assembling the founding members.
• Prepare a certificate of stamp registration
  in the name of incorporators and directors.
• Bank account in the name of an incorporator.
• Decide the business description.

3-3. Making a Stock Company

Decide incorporator and director *You can take all roles if you don’t have any partners.
↓	↓
Decide the location of the Head Office	Decide the amount of capital, board members
↓	↓
Decide the trade name and business activities
↓
Create the articles of incorporation and notarize the document
↓	↓
Call up for a constituent general meeting	Create a company stamp for registration
↓	↓
Complete the deposit of full amount of capital into the bank account that is stated in the articles of incorporation
↓
Prepare all documents for the registration
↓
Apply for the registration
↓
Completion of the registration

*Time frame shown on the chart is approximately.
Express service is available.


3-4. Timeframe

  Generally making procedure takes 2 to 3 weeks after the decision of starting up the company. You had better think that it takes about a month from the time of initiating the idea of the business to actual operation.

The owner will be able to obtain the certificate of the registration and seal registration of the company after the completion of the process in the Legal Affairs Bureau.

3-5. Corporate account

  The certificate of company registrations are probably needed to be presented at the bank when you make a corporate account and you have to wait another week or so for the screening before the bank issue a new account.

4-1. Notifications

  Many notifications must be submitted to relevant government agencies after the completion of the establishment. Notifications depend on the region and type of business but the main notifications are as shown below.

  *Important thing is that the each notification has time limit
in the acceptance.
   *Due date for submission varies according to the local public office.


  Our clients are all in the Free Advisory Contract. So I will provide the information by checking the agencies case by case after the completion of the establishment.


  Tax Office

• Notification of incorporation (within 2 months after the incorporation)
This notification must be submitted to the tax office when the company has been established.
• Application for approval of filling a blue tax return
This form is necessary for receiving preferential tax treatment under the blue tax return.
It must be submitted to the tax office within 3 months after the establishment.
• Notification of establishment of a salary-paying office
  (within a month from the establishment of the office)
• Application for special approval concerning payment date for income tax

  Prefecture Tax Office

• Notification of establishment of the company

  Municipal Office

• Notification of incorporation ( except companies registered in Tokyo 23 wards )
All companies have an obligation to pay corporate inhabitant tax and enterprise tax. They must submit the notifications to the respective offices governing the location of the head office. The due date for submission varies according to the local agency, but generally, notifications need to be submitted within a month after the establishment. In Tokyo, they must be submitted within 15days after the establishment.

  Social Insurance Office

• Notification of new application
• Report on the current circumstance of new applicable business office
• Notification of the acquisition of eligibility as an insured

  Labor Standards Inspection Office

• Notification of starting a labor insurance relationship
• Declaration of estimated labor insurance premium

  Public Employment Office (Hello Work)

• Notification of the establishment of the company with employment insurance
• Notification of the acquisition of insured status under employment insurance

Q: I don't have any partners to start the business with. Should I find anybody else for the set-up?

A: No, you don't have to find anyone else. "Incorporator", "Investor" and "Director" are necessary when you set up the company. But you can take all three roles by yourself.

Q: Can I really set up a company with one Yen capital? And realistically, what is the appropriate amount for the initial capital?

A: Yes, you can set up the company with one Yen capital. One Yen is sufficient to make a company. But I think it is not possible to manage the company with initial capital of 1 Yen. You need the funds anyway sooner or later. The operation fund that is needed during first 6 month could be a rough indication of the proper amount of capital.

Q: Does a foreign national need to have a status of residence that permits to work in Japan when establish the company or to become an incorporator or director?

A: No, you do not necessarily need to have a working visa in order to make a company. However, any foreign nationals who intend to manage the company as a director after the completion of the company must have proper status of residence.

Q: Can I use my apartment address as a head office?

A: Yes, you can use the address for the incorporation. But the trouble could happen if your apartment is not allowed to be used as a business office. Please make sure to your landlord or realtor beforehand if you can use the place as a business office. And moreover, you may not be able to get the authorization or approval from the public office when you use the private apartment as a business office. Of course it depends on what type of business you are engaging to do though.

Q: How should I decide the closing date of the account? Most companies seem to close it either the end of March or the end of December.

A: You can set the date whenever you like. Here I write some tips before you decide the closing date. 1: You should not set the closing date in your peak season of the business. The settlement of the account is time consuming task and you should not do this during the busy business period. 2: The end of the month prior to the company's birth-month of the establishment. That makes delay as much as possible the first settlement of accounts. For example, if the birth date is in August, the closing date may be set to July 31.

Q: How do I decide the director’s term of office?

A: If the company is on your own or operates only restricted members, such as family business etc, 10 years would be appropriate. In other cases, 4 to 5 year term is more appropriate as it gives more occasions to review management of the company.

Q: Where should I go for notarizing the articles of incorporation?

A: To the notary public office which has jurisdiction over the location of your head office.

Q: What’s the difference between "Stock Company" and "Limited Liability Company"?

A: Limited Liability Company (LLC) is a new form of the company emerging in 2006 in Japan. Stock company is the capital oriented company and the LLC is people oriented. Setting up LLC is cheaper and quicker comparing to the Stock company. In the LLC, all members are company’s representative unless otherwise specified. If the company is operated only a limited members or family based small business and do not need to increase big amount of capital fund in the future, it is worth to establish the LLC.

  My office uses Electric Authentication System that makes owners don’t need to pay 40,000 JPY revenue stamp that must be paid when submitting articles of incorporation presented by owners themselves.