SMARTSTART JAPAN
FAQ
All-in-One Support for Setting Up Your Business in Japan!
Choose a Topic:
Incorporation Questions
Learn about company types, registration process, requirements, and more.
Office Questions
Find guidance on office setup, location options, and lease considerations.
Visa Questions
Get answers about business visas, eligibility, application steps, and renewals.
Tax Questions
Explore tax obligations, filings, deductions, and Japan’s tax system basics.
Corporate Banking Questions
Understand how to open a corporate bank account and manage your finances.
After Incorporation
What comes next? Compliance, reporting, hiring, and scaling your business.
Let’s Get Started Together
If you’re ready to build your business in Japan, and want a partner who knows the system inside and out, we’re here for you.
Frequently Asked Questions
Incorporation Questions
Can a foreigner start a company in Japan?
Yes. Foreign nationals can fully own and incorporate a company in Japan. Japan's Companies Act does not restrict foreign ownership of a KK (Kabushiki Kaisha) or GK (Godo Kaisha). You can hold 100% of the shares or membership interests as a non-Japanese national.
However, incorporation is only the starting point. If you plan to move to Japan and run the company yourself, you will also need a Business Manager Visa. If you are incorporating from overseas, there are additional practical requirements around representation, address, and banking that need to be planned carefully from the start.
Learn more about how SmartStart Japan supports foreign founders →
What is the difference between a KK and a GK?
A KK (Kabushiki Kaisha) is a joint-stock company and the most widely recognised corporate structure in Japan, roughly equivalent to a corporation or limited company. A GK (Godo Kaisha) is a simpler, more flexible structure closer to a limited liability company (LLC).
Both offer full limited liability protection for their owners. The key practical differences:
- Cost: GK registration costs are lower. KK registration requires notarisation of the articles of incorporation, which adds cost.
- Perception: KK is generally more recognised by Japanese banks, clients, and partners, particularly in B2B contexts.
- Governance: GK allows more flexible internal governance but has fewer established norms, which can create friction with some Japanese counterparties.
- Investment: If you plan to raise investment in Japan, a KK is typically required as it supports share issuance.
The right choice depends on your industry, client base, and growth plans. SmartStart Japan can help you evaluate which structure fits your situation.
Can I incorporate in Japan without living there?
It is possible to incorporate a company in Japan without being a Japan resident. The registration process itself can be completed remotely with the right documentation and local support.
However, remote incorporation comes with practical complications that need to be planned for in advance:
- A Japan corporate bank account is difficult to open remotely and typically requires a Japan-based point of contact.
- Your company needs a registered address in Japan.
- For a KK, articles of incorporation require notarisation, which means documents may need to be notarised and apostilled in your home country.
- If you plan to move to Japan later, your visa strategy must align with your company structure from the start.
SmartStart Japan supports remote incorporation and can help you structure the process whether you are based overseas or already in Japan.
Do I need a Japan-based director or representative?
A GK does not require a director in the traditional sense but does need at least one member (社員) with representative authority. A KK requires at least one representative director (代表取締役).
If you are a non-resident founder, having a Japan-based representative significantly helps with banking, day-to-day administration, and credibility with local counterparties. In some situations, a locally based representative director may be a requirement from banks or service providers.
SmartStart Japan can introduce possible solutions for founders who need to discuss local director or representative options. This is not a standard arrangement available to every client.
How much capital do I need to start a company in Japan?
Japan has no minimum capital requirement to incorporate a KK or GK. It is legally possible to incorporate with ¥1. However, your capital amount has significant practical implications.
Banks and business partners use capital as an early indicator of financial seriousness. Companies with very low capital can face difficulty opening corporate bank accounts or building credibility with Japanese counterparties.
If you are planning to apply for a Business Manager Visa, the capital requirement is ¥30 million. This is a significant commitment that should be factored into your overall Japan entry strategy from the beginning.
What are the articles of incorporation?
The articles of incorporation (定款, teikan) are the foundational legal document of your company. They set out the company name, registered address, business purposes, capital structure, and governance rules.
For a KK, the articles of incorporation must be notarised by a notary public (公証人) before company registration. The notarisation fee is typically around ¥52,000, with an electronic notarisation option available in some cases.
For a GK, notarisation of the articles of incorporation is not required, which reduces setup cost and simplifies the process.
Your business purposes (事業目的) should be drafted broadly enough to cover your current activities and likely future directions without being so vague they create issues with immigration or banking.
Does my company need a seal?
A registered company seal (法人印鑑, hojin inkan) is still required as part of the Japan company registration process. It is registered with the Legal Affairs Bureau (法務局) and becomes the official seal of the company.
In practice, you will use the company seal for agreements, bank applications, and certain official procedures. Even as Japan moves toward digital processes, the seal remains a practical necessity for operating a Japan company.
A standard company seal typically costs between ¥5,000 and ¥30,000 depending on the material and quality.
Do overseas documents need to be apostilled or notarised?
For documents issued outside Japan — such as board resolutions from an overseas parent company, identity documents, or overseas certificates of incorporation — Japan typically requires either apostille certification or notarisation and legalisation, depending on the document type and your home country.
Japan is a signatory to the Hague Apostille Convention, so documents from most countries can be apostilled rather than going through a full chain of notarisation and consular legalisation. However, specific requirements vary by document type and by the Legal Affairs Bureau handling your registration.
What is the difference between a branch office and a subsidiary?
A branch office (支店, shiten) is an extension of your overseas parent company in Japan. It is not a separate legal entity. The parent company bears full legal and financial responsibility for the branch's activities in Japan.
A subsidiary — typically structured as a KK or GK — is a legally separate entity incorporated in Japan. The parent company's liability is generally limited to its investment in the subsidiary.
For most foreign companies entering Japan, a subsidiary is the preferred structure because it limits the parent company's exposure and is more familiar to Japanese banks, clients, and partners. A branch office may be appropriate in certain cases, such as regulated financial services, or where keeping operations within the parent entity's legal structure is important.
Visa Questions
How much capital do I need for the Business Manager Visa?
SmartStart Japan advises clients that ¥30 million in capital is required for the Business Manager Visa application direction we support.
This reflects our approach to structuring applications that are well-positioned for approval and for renewal. We do not advise applicants to plan around lower capital thresholds.
Capital planning should happen before incorporation, not after. The capital amount you deposit at the time of incorporation forms part of your visa application documentation. Contact us early to discuss how to structure this correctly.
Do I need a physical office for the Business Manager Visa?
Yes. Immigration authorities require evidence of a genuine business office for the Business Manager Visa. The office must be a dedicated space that your business actually uses.
Virtual offices are not accepted for Business Manager Visa applications. A shared or serviced office with a dedicated private space may be acceptable depending on the specific setup, but a hot-desk arrangement or mail-only address is not sufficient.
Your office must be secured and documented before your visa application is submitted. The office address is a required part of the application, and immigration will assess whether the space is credible for the type of business you are operating.
Do I need a business plan for the Business Manager Visa?
Yes. A business plan is a required component of the Business Manager Visa application. Immigration authorities use it to assess whether your business is viable and whether your role is that of a genuine manager rather than an employee.
Your business plan needs to be credible and internally consistent. It should explain your business model, target market, revenue projections, operating expenses, and how the business will function in Japan. Vague or generic plans are a common reason for application difficulties.
SmartStart Japan works with clients to structure business plans appropriate for the immigration application context. This is one of the most important documents in your application and should not be treated as a formality.
Do I need to incorporate before applying for the Business Manager Visa?
Yes, in most cases. You typically need your Japan company to be incorporated and have a registered office before submitting your Business Manager Visa application. The application requires documentation of the company's existence, capital, and office.
The standard sequence is: incorporate → secure office → prepare business plan → submit visa application. SmartStart Japan helps clients plan this sequence correctly from the start to avoid delays or application problems caused by incorrect ordering.
Can I manage my Japan company from overseas while waiting for my visa?
You can manage your company remotely while your visa application is being processed, but there are practical limitations. You cannot legally be present in Japan and work as a manager without the appropriate visa status.
During the processing period, administrative and operational tasks can be handled by a Japan-based representative or by you remotely. However, certain activities — including bank account setup and some client-facing work — are easier to progress with someone physically present in Japan.
Immigration processing times vary. SmartStart Japan can help you plan what can and cannot be done before and after your arrival.
Can my family members come with me to Japan?
Spouse and children of Business Manager Visa holders can typically apply for a Dependent Visa (家族滞在ビザ). This allows family members to live in Japan while your Business Manager Visa is active.
A Dependent Visa holder may work part-time (up to 28 hours per week) with the appropriate permission. They cannot engage in activities outside the permitted scope of their visa category.
Your family members' visas are tied to your status. If your Business Manager Visa is not renewed, their dependent visas are also affected. Maintaining a well-documented and well-performing business matters for the ongoing visa stability of your whole family.
What happens when my Business Manager Visa is up for renewal?
The Business Manager Visa must be renewed before it expires. For renewal, immigration authorities will assess your continued eligibility by reviewing whether your company is still operating, whether it meets the business requirements, and whether your role remains that of a genuine manager.
A company with strong records (e.g., financial statements, tax filings, social insurance enrollment, and documented business activity) is better positioned for renewal. Companies with no revenue, inconsistent records, or unclear management structure may face increased scrutiny.
What should I think about when planning my visa strategy?
Your visa strategy should be planned alongside your company structure and capital decisions, not after them. The most common mistake is incorporating first with a structure or capital amount that does not support the visa application you need.
Key factors to align early: company type and capital amount, office type and location, business plan credibility, and the sequencing of incorporation and visa application steps.
SmartStart Japan advises clients on visa strategy before incorporation begins. Getting the structure right from the start is significantly easier than trying to restructure after the fact.
Corporate Banking Questions
Why is it difficult for foreign-owned companies to open a bank account in Japan?
Japan's corporate banking system applies careful due diligence to new account applications, particularly for foreign-owned companies. Banks are concerned about compliance risk and the credibility of companies without an established track record in Japan.
Foreign-owned companies without Japanese directors, no established Japan business history, or incomplete documentation face a higher bar. Some banks have informal policies that make new foreign-owned company accounts difficult to open regardless of application quality.
This is not impossible to overcome, but it requires careful preparation and realistic expectations about which banks are most likely to be receptive to your application.
When should I apply for a corporate bank account?
Apply as early as practically possible after incorporation, but ensure your application materials are complete and credible before you submit. Banks take the quality of your application documents seriously, and a weak first application makes subsequent applications to other banks harder.
You should have your incorporation documents complete, your registered office secured, your capital deposited, and a clear business plan ready before approaching banks. An introduction or established relationship with a bank can also help.
SmartStart Japan can advise on timing and preparation based on your company structure.
What documents do I need to open a corporate bank account in Japan?
Document requirements vary by bank. Core documents most banks will request include:
- Certificate of incorporation (登記事項証明書)
- Articles of incorporation (定款)
- Company seal certificate (印鑑証明書)
- Representative director identification
- Business plan or business activity description
- Office lease or registered address evidence
Some banks may also request financial statements, evidence of existing business relationships, or additional identification from foreign directors. Be prepared to explain your business model clearly, in Japanese or with translation support.
Does my company need a Japan-based office and director to open a bank account?
A dedicated Japan office address is generally expected for corporate bank account applications. A virtual office or mail-only address is often not sufficient.
Having a Japan-based representative director who can attend the bank in person significantly improves your chances. Some banks require an in-person meeting with a representative director as part of their process.
Companies with no Japan-based director and no physical presence face a higher rate of rejection. If this applies to your situation, discuss the implications with SmartStart Japan before approaching banks.
Does my capital amount affect my bank application?
Capital is one of the factors banks consider. Companies with very low stated capital face more scrutiny. Higher capital is generally viewed as a signal of financial seriousness and business credibility.
There is no official capital threshold for bank account approval. However, companies where the capital amount and business description appear credible together are better positioned than those where these elements do not align.
What is the difference between mega banks, regional banks, and online banks for a new Japan company?
Mega banks (e.g., MUFG, SMBC, Mizuho) have the widest service range and international capabilities but the most conservative due diligence processes. They are the most difficult for new foreign-owned companies to access.
Regional banks can be more flexible than mega banks in some cases. Their appetite for new foreign-owned company accounts varies by institution and by region.
Online banks (e.g., PayPay Bank, GMO Aozora) have generally been more accessible to foreign-owned companies in recent years. Their digital processes and less rigid requirements have made them a common first account option for new Japan companies, though their service range is more limited than a full-service bank.
Most SmartStart Japan clients pursue a combination strategy rather than relying on a single bank.
Why do banks reject foreign-owned company applications?
Common reasons for rejection include:
- Insufficient or unclear business plan
- Virtual office or mail-only address
- No Japan-based director or contact person
- Very low capital relative to the stated business activities
- Incomplete or inconsistent application documents
- Business description that is too vague or raises compliance concerns
- Industry that the bank treats as higher risk
Some rejections reflect the bank's current internal policies rather than the quality of your application. A rejection from one institution does not necessarily mean all banks will reject you, but preparation and document quality matter significantly.
What can I do if my corporate bank account application is rejected?
Do not immediately reapply to the same bank. A second rejection from the same institution typically makes further applications there very difficult.
Review your application materials carefully. Identify whether the rejection was likely due to documentation quality, business plan clarity, office type, or another factor. Strengthen the weak areas before approaching a different institution.
SmartStart Japan can help you assess what went wrong and prepare a stronger approach for your next application. Do not give up after a single rejection, but do not apply broadly without improving your materials first.
Office Questions
Can I use a virtual office for my Japanese company?
A virtual office can be used as the registered address for company incorporation in many cases. It is a common option for founders in the early stages who do not yet have a physical office in Japan.
However, a virtual office is generally not suitable for Business Manager Visa applications, which require evidence of a genuine dedicated business space. Some banks also apply stricter scrutiny to companies registered at well-known virtual office addresses.
If your plan involves applying for a Business Manager Visa or opening a corporate bank account, discuss your office strategy with SmartStart Japan before committing to a virtual office arrangement.
What is the difference between a virtual office, serviced office, and private office?
Virtual office: Provides a registered address and mail handling only. You have no dedicated physical workspace. Monthly costs are typically low.
Serviced or shared office: Provides access to physical workspace — typically hot-desks or bookable private rooms — alongside a registered address. The flexibility and quality of space varies significantly by provider.
Private serviced office: A dedicated, lockable private office within a serviced office building. This is the type of dedicated physical space typically required for Business Manager Visa applications.
Private leased office: A conventional office lease in your company's name. Maximum credibility and control, but requires a deposit and multi-year commitment.
The right choice depends on your stage, visa requirements, banking needs, and budget.
Can I use my home address as my company's registered address?
Using a personal residential address as a company's registered address is sometimes possible, but depends on your lease agreement. Many residential leases in Japan prohibit commercial use of the address.
Even where it is technically permitted, a home address may raise questions from banks or immigration in the context of a visa application. It also means your home address becomes part of the company's publicly accessible registration record.
This may be suitable in some simple situations, but it creates complications in others. Confirm this with SmartStart Japan before deciding.
Does my office type affect my Business Manager Visa application?
Yes, significantly. Immigration authorities assess whether your office is a genuine place of business. For the Business Manager Visa, you need a dedicated physical space that you can demonstrate is being used for your company's activities.
A virtual office is not acceptable. A hot-desk arrangement is generally not sufficient. A private serviced office or private leased office that provides a dedicated space is typically required.
Your office must be secured and documented before your visa application is submitted. SmartStart Japan advises clients on suitable office arrangements before the visa application stage.
Does my office choice affect my corporate bank account application?
Yes. Banks in Japan place significant weight on the credibility of your business address. Companies registered at addresses that banks recognise as virtual or shared-only locations may face additional scrutiny or rejection.
A dedicated physical office — one that the bank can verify is operational — improves your banking application. Some banks conduct a site visit or phone verification as part of their due diligence process.
Confirm your office type and address with your SmartStart Japan advisor before approaching banks.
Can I change my company's office address after incorporation?
Yes. You can change your registered address after incorporation by filing a change registration with the Legal Affairs Bureau. The government fee for a head office address change within the same Legal Affairs Bureau jurisdiction is ¥30,000. A move to a different jurisdiction costs ¥60,000.
An address change also needs to be reflected with other authorities — including your tax office, bank, social insurance office, and any other institutions that hold your registered address on file.
SmartStart Japan can assist with address change procedures as part of post-incorporation support.
Tax Questions
What taxes does a Japan company pay?
A Japan company is subject to several categories of tax:
Corporate income tax (法人税): National tax levied on corporate profits. The effective rate for small and medium companies is approximately 15% to 23% on net income at the national level, with total effective rates higher once local taxes are included.
Local taxes: Include corporate inhabitant tax (法人住民税) and enterprise tax (事業税), levied by the prefecture and municipality.
Consumption tax (消費税): An indirect tax on sales, currently at 10% (with a reduced 8% rate on certain items). New companies may be exempt for the first two fiscal years depending on their structure and capital.
Exact tax rates and applicability depend on your company structure, revenue level, and residency situation. Confirm the specifics with a licensed tax accountant.
What is the per capita inhabitant tax?
The per capita inhabitant tax (均等割) is a fixed local tax levied on corporations regardless of whether the company generates a profit. Even a company with zero revenue or a net loss must pay this tax each year.
The amount varies by municipality but is typically around ¥70,000 to ¥80,000 per year for a small company registered in Tokyo.
This means that even a dormant company with no business activity still has annual tax obligations. Founders who incorporate and then delay operating should be aware that tax filing requirements and this base tax continue to apply from the point of incorporation.
When does my company need to register for consumption tax?
New companies are generally exempt from consumption tax for their first two fiscal years if their capital is below ¥10 million and they meet other eligibility conditions. This is the consumption tax exemption period (免税事業者).
If your capital is ¥10 million or more, your company is subject to consumption tax from the first fiscal year. Additionally, if your sales exceed ¥10 million in a prior base period, you will be required to register and collect consumption tax in subsequent years.
Consumption tax registration and filing has implications for your invoicing and accounting systems from the start. Early advice from a licensed tax accountant will prevent complications later.
What is blue return filing and why does it matter?
Blue return (青色申告) is a tax filing system that provides significant benefits to companies that qualify and elect to use it. For corporations, the primary benefit is the ability to carry forward losses for up to ten years and offset them against future taxable income.
To file on a blue return basis, you need to notify the tax office within a specific timeframe after incorporation. Missing this deadline means your company defaults to white return (白色申告), which does not offer the loss carryforward benefit.
SmartStart Japan advises all clients to file the blue return notification promptly after incorporation. It is one of the first administrative steps that should not be overlooked.
Can my company carry forward tax losses?
Yes, under blue return filing. Losses incurred in a fiscal year can be carried forward and offset against future taxable income for up to ten years. This can meaningfully reduce your tax burden in profitable years that follow an early-stage loss period.
Loss carryforward is only available to companies filed on a blue return basis. This is one of the main reasons the blue return notification is treated as an immediate priority after incorporation.
Exact treatment depends on your company's filing history and structure. Confirm the specifics with a licensed tax accountant.
How do I choose my company's fiscal year?
Your company's fiscal year is set in your articles of incorporation. You can choose any twelve-month period. Common choices include April to March (aligned with Japan's government and corporate fiscal year) or January to December (aligned with many international businesses).
Practical considerations include: when you expect your first significant revenue, your peak operating season, and whether your fiscal year needs to align with an overseas parent company's reporting cycle.
Your first fiscal year may be shorter or longer than twelve months depending on when you incorporate relative to your chosen year-end date. This affects the timeline of your first tax filing.
When are Japan corporate tax returns due?
Corporate tax returns in Japan are due within two months of the end of your fiscal year. For a March 31 year-end, the filing deadline is May 31. For a December 31 year-end, it is February 28.
If you need additional time, you can apply for a one-month extension (延長申請), which is commonly granted.
Most Japan companies work with a licensed tax accountant (税理士) to prepare and file their annual returns. SmartStart Japan can introduce appropriate tax accountant support as part of your post-incorporation setup.
How should I set my director's salary?
Director compensation (役員報酬) in Japan is treated differently from regular employee salary for tax purposes. Once set at the start of a fiscal year, it generally cannot be changed mid-year without triggering tax implications, under the fixed same-amount compensation rule (定期同額給与).
Setting director salary too high too early can create cash flow problems. Setting it too low may raise questions about the genuine nature of your management role. The optimal level depends on your company's revenue projections, operating costs, and personal income tax situation.
Exact tax treatment of director compensation depends on your company structure, revenue, and personal residency status. Confirm the details with a licensed tax accountant before setting your compensation level for the year.
After Incorporation
How long does the full Japan company setup process take?
The full process from initial planning to being operational in Japan typically takes three to nine months. The incorporation itself takes four to eight weeks. The Business Manager Visa application adds two to four months of processing time on top of that.
Approximate stage-by-stage breakdown:
- Document preparation and incorporation: four to eight weeks
- Business Manager Visa application and processing: two to four months
- Corporate bank account setup: one to three months (can run concurrently with visa processing)
These timelines depend on document readiness, how quickly your office is secured, and immigration processing volumes at the time of your application.
How much should I budget for setting up a company in Japan?
Setup costs vary depending on your company type, capital amount, office choice, and the level of professional support you engage.
Government and mandatory costs include:
- Registration tax: ¥60,000 minimum (GK) or ¥150,000 minimum (KK)
- Articles of incorporation notarisation (KK only): approximately ¥52,000
- Company seal: approximately ¥5,000 to ¥30,000
Ongoing costs to plan for include registered address fees, accounting and tax filing fees, social insurance contributions once you take a director's salary, and any licensing or permit costs depending on your industry.
SmartStart Japan service fees are separate from the above. We can provide a clearer cost picture once we understand your structure and requirements.
How do I hire my first employee in Japan?
Hiring an employee in Japan involves several steps and ongoing obligations:
- Register with the relevant government agencies: Hello Work (ハローワーク), the labour standards inspection office (労働基準監督署), and the social insurance office (年金事務所)
- Draft an employment contract that complies with Japan's Labour Contract Act and Labour Standards Act
- Enrol the employee in Japan's social insurance system (health insurance, pension, employment insurance, and workers' accident compensation)
- Set up payroll in line with Japan's mandatory withholding and reporting requirements
Japan's employment laws provide significant protections for employees, including strong restrictions on dismissal. Understand your obligations before making your first hire.
SmartStart Japan can introduce HR and labour support specialists appropriate to your stage.
What accounting requirements does my company have after incorporation?
Japan companies are required to maintain proper accounting records and file annual tax returns. Core requirements include:
- Bookkeeping records maintained in accordance with Japan's Companies Act
- Corporate tax returns filed within two months of fiscal year-end (three months with an extension)
- Consumption tax returns if applicable
- Annual financial statements prepared at each fiscal year-end
Most Japan companies work with a licensed tax accountant (税理士) to manage compliance obligations. For a small company, budgeting ¥200,000 to ¥500,000 or more per year for accounting support is typical, depending on transaction volume and complexity.
What do I need to know about payroll and social insurance in Japan?
If you take a director's salary or hire employees, your company must enrol in Japan's social insurance system. The three main programs relevant to companies are:
Health insurance and pension (社会保険): Mandatory for companies with directors taking salary or with employees. Both employer and employee contribute approximately 15% each of salary, split between health insurance and pension.
Employment insurance (雇用保険): Applies once you hire employees (not required for director-only companies). Covers unemployment-related benefits.
Workers' accident compensation (労災保険): Applies to all employees from the first hire.
Social insurance is a significant cost that should be factored into your financial projections from the start.
Are there subsidies or loans available for new companies in Japan?
Yes. Japan offers a range of subsidies (補助金) and government-backed loans (融資) for new and small businesses. Common options include:
- Japan Finance Corporation (JFC / 日本政策金融公庫) loans, which are a common source of startup financing for new Japan companies with limited credit history
- Tokyo Metropolitan Government business support programs
- Industry-specific subsidies depending on your sector and business activities
Availability, eligibility criteria, and application requirements change regularly. The right program depends on your company structure, industry, revenue stage, and business plan.
SmartStart Japan can advise on which programs may be relevant to your situation and introduce specialist support where appropriate.
SmartStart Japan is dedicated to helping international entrepreneurs confidently build and launch businesses in Japan.