Japan’s retail sector, with 126 million consumers and a 3.1% sales growth in March 2025, is thriving. Despite e-commerce accounting for 9.4% of sales, brick-and-mortar stores still dominate. This guide streamlines the process of starting a retail business, covering essential topics such as legal structures, costs, permits, and strategies, with valuable resources.
Before you can open your store, you’ll need to choose a legal structure. In Japan, most entrepreneurs go with either a Godo Kaisha (GK) or a Kabushiki Kaisha (KK). Both options achieve the desired outcome, but they come with different trade-offs in terms of cost, credibility, and complexity. We hope this article can help you with opening a retail business in Japan. Gather all the information you need to open a retail business in Japan in no time!
GK: Quick, Affordable, and Founder-Friendly
If you’re launching your first shop or starting lean, a GK is often the way to go. It’s similar to an LLC in the U.S.—simple, low-maintenance, and cost-effective.
Step 1: Legal Structure
Why choose a GK?
- Lower startup costs
- No board meetings or complex filings
- Easy to manage as a solo founder
- Fast setup (about 2–3 weeks)
Estimated cost: ¥120,000–¥250,000
Best for: First-time founders, small shops, or lifestyle brands. For more information about Godo Kaisha (GK), check out this helpful article Ultimate Guide to Godo Kaisha in Japan.
KK: Built for Scale and Serious Growth
If you’re aiming for bigger opportunities—multiple stores, outside investment, or long-term growth. A KK offers more credibility and structure. It’s Japan’s version of a joint-stock company, and it’s the go-to for businesses that want to look serious from day one.
Why choose a KK?
- Seen as more credible by landlords, banks, and suppliers
- Easier to raise funds or take out loans
- Required for franchising or IPOs
- Preferred for larger or upscale businesses
Estimated cost: ¥250,000–¥450,000+
Timeline: Around 3–4 weeks (includes notary process)
Best for: Multi-store retailers, import/exporters, or growth-focused brands
We have this amazing article that goes deeper on Establishing and Scaling a Kabushiki Kaisha in Japan
Are you unsure which structure is right for your business? That’s where SmartStart Japan comes in. We specialize in helping entrepreneurs choose the best setup for their goals and guiding you through every step of the process
Step 2: Business Address and Leasing Retail Space
Securing Your Business Address
You’ll need a physical business address to register your company and apply for a visa, and choosing the right one is more than just picking a spot on the map.
What to Watch For:
Zoning Rules
First, make sure the property is legally zoned for retail use. For food businesses, this often means securing a location with a certified commercial kitchen. When in doubt, ask the landlord or check with the local city office for clarification.
Upfront Lease Costs
Renting a shop in Japan comes with some sticker shock. Landlords typically ask for 6–10 months of rent upfront, which includes deposit, “key money” (a non-refundable gift), and realtor fees. For a Tokyo space at ¥200,000 per month, expect to pay between ¥1.2 and ¥1.5 million to move in.
Visa Compliance
If you’re applying for a Business Manager Visa, a residential address or a virtual office won’t suffice. You’ll need a dedicated commercial space. Usually, you sign the lease personally first, then transfer it to your company once it’s officially incorporated.
Choosing the Right Location
Beyond foot traffic, consider areas offering local subsidies. Some cities provide grants for opening in vacant storefronts. At SmartStart Japan, we maintain a list of foreigner friendly office spaces to make this step smoother. This will make opening a retail business in Japan so much easier.
Step 3: Licensing & Permits
Not every retail business in Japan needs a license, but if you’re dealing with food, alcohol, or secondhand goods, there are a few hoops to jump through.
What You Might Need:
General Retail
Good news: if you’re selling only non-food items, you typically don’t need a license.
Food & Beverage
Opening a café, bakery, or restaurant? You’ll need a Food Business Permit from the local health center. It requires a Food Hygiene Supervisor and an on-site inspection. Apply about 10 days before opening.
Selling Alcohol
Planning to sell alcohol in-store or online? You’ll need a Liquor Retail License from the National Tax Agency. It’s location-specific, takes 2–3 months, and costs around ¥30,000.
Secondhand Goods
If you’re selling used items, you must apply for a Secondhand Dealer License through the Prefectural Police. The process involves a background check and typically takes approximately 40 days to complete. You’ll also need to log all transactions in case of police audits.
Other Permits
If you’re dealing with pharmaceuticals, tobacco, or making structural changes to your space, additional permits may apply.
Pro Tip:
Start license applications 2–3 months before launch (except for food, which can be done closer to your opening date).
At SmartStart Japan, we help clients avoid common missteps by handling these applications from start to finish.
Step 4: Business Manager Visa if needed
If you’re planning to live in Japan and run your business full-time, you’ll need the Business Manager Visa. It’s the go-to visa for foreign entrepreneurs.
What You’ll Need:
- Capital: Either invest ¥5 million or hire two full-time Japanese or permanent resident staff.
- Office Space: A leased commercial space is required—home addresses and virtual offices don’t qualify.
- A business plan for immigration requires a comprehensive plan that includes financial projections, market research, and a clear description of your managerial role.
- Application Route: Already in Japan? Apply for a change of status. Outside of applying for a certificate of eligibility (CoE)
Considering a Startup Visa?
Cities like Tokyo and Fukuoka offer a Startup Visa, a 6–12-month option (extended to 2 years in 2025) that allows you to set up without the upfront capital requirement of ¥5 million. It’s a great pathway if you’re just getting started.
At SmartStart Japan, we handle the entire process—from drafting your business plan to collecting the proper documents. Our Visa Transition Checklist ensures that nothing is missed.
Step 5: Expansion Costs
Expansion Cost Breakdown
Once your first store is up and running, the next step may be growth, whether that involves opening new locations or expanding your online presence. But expansion in Japan comes with specific costs and challenges. Knowing this information, it will make opening a retail business in Japan much easier.
Setting up a new store typically costs between ¥3 million and ¥5 million per location. That covers deposits, renovations, and initial stock. You can use your existing company, but each store needs its permits.
POS Systems like Square or AirREGI cost around ¥5,000–¥10,000 per month, plus a one-time upfront fee of ¥100,000–¥300,000 for hardware.
E-commerce integration starts around ¥200,000 for a basic website, with ongoing costs for marketing and marketplace fees.
Hiring is another significant factor. Expect to pay 1.2–1.5x the base salary once you factor in insurance and benefits. For example, a ¥250,000/month role will cost about ¥300,000 total. The regional minimum wage ranges from ¥900 to ¥1,100 per hour.
Working with Distribution Partners
If you’re considering using a distributor, it’s essential to understand the cultural and legal landscape. This information will be needed when opening a retail business in Japan.
Language barriers can lead to misunderstandings—contracts should be bilingual, and a local advisor is often essential.
Cultural differences mean decisions may take longer and rely on trust-based relationships.
Contracts in Japan are usually shorter, but that doesn’t mean you can skip legal review. Be sure to cover pricing, returns, and termination.
Looking to Partner with a Distributor in Japan? Don’t Miss This Expert Guide from Scaling Your Company
Legal cost estimates:
- Drafting a contract: ¥100,000–¥250,000
- Reviewing an existing one: ¥50,000–¥150,000
- Full support: ¥200,000–¥400,000+
Total Estimated Incorporation
(All costs in Japanese Yen / approximate ranges)
| Category | Godo Kaisha (GK) | Kabushiki Kaisha (KK) | Notes |
| Incorporation (Core Setup) | ¥186,500 – ¥220,000 | ¥431,500 – ¥450,000+ | Includes registration, consulting, seal, etc. |
| Rent Deposit + Key Money | ¥1.2M – ¥1.5M | ¥1.2M – ¥1.5M | Tokyo average: 6–10 months’ rent upfront |
| Company Office Lease (Monthly) | ¥150K – ¥300K | ¥150K – ¥300K | Required for Business Manager Visa |
| Food Business Permit | ¥0 – ¥20,000 | ¥0 – ¥20,000 | Includes facility inspection, hygiene supervisor |
| Liquor Sales Permit | ¥30,000 | ¥30,000 | Takes 2–3 months to approve |
| Secondhand Dealer License | ¥20,000 – ¥25,000 | ¥20,000 – ¥25,000 | Apply via Prefectural Police; ~40-day process |
| Legal Support (optional) | ¥50,000 – ¥400,000+ | ¥50,000 – ¥400,000+ | For contracts or franchising setup |
| Business Manager Visa (optional) | ¥226,000 – ¥391,000 | ¥226,000 – ¥391,000 | Includes visa support, stamp fee, + family if needed |
Total Estimated Startup Cost
| Entity Type | Total (Without Visa) | Total (With Visa) |
| Godo Kaisha (GK) | ¥1.6M – ¥2.2M | ¥6.6M – ¥7.3M |
| Kabushiki Kaisha (KK) | ¥1.9M – ¥2.4M | ¥7.2M – ¥7.8M |
Larger or more complex deals involving intellectual property (IP) or franchising may incur higher costs.
At SmartStart Japan, we assist clients with setup, subsidies, and legal support, enabling them to scale smoothly and confidently.
Smart Start Japan and Scaling Your Company can guide you through subsidy applications and local incentive programs to support your growth. We make it possible to opening a retail business in Japan.
Step 6: Growth Strategy.
Once your shop is up and running, it’s time to think about how to grow smartly and sustainably. This information will be needed for opening a retail business in Japan.
Go Multichannel
Don’t limit yourself to just a physical store. Platforms like Rakuten, Amazon Japan, and your e-commerce site can help you reach a wider audience of customers. Tools like LINE are great for promotions and building direct relationships. Add a loyalty program to boost repeat sales and keep your community engaged. Opening a retail business in Japan is much easier.
Localize Everything
Success in Japan means going beyond translation. Think: elegant gift wrapping, seasonal campaigns, and warm omotenashi-style service. Tailoring your offer to local expectations can make a significant difference.
Use Your Data
Your POS system and online sales give you powerful insights. Use them. Track what’s selling, adjust pricing, and time your promos based on actual buying behavior.
Franchising or Partnerships
If your concept is working well, franchising could be a way to grow quickly. Just ensure your systems and training are solid. Not ready to franchise? Collaborate with local influencers, department stores, or hotels to expand your reach without having to start from scratch.
Stay Fresh
Growth doesn’t always mean bigger. It also means better. Keep things exciting with new products, seasonal events, or in-store workshops. Embrace a kaizen mindset: constantly improving, one step at a time.
SmartStart Japan is here to support you at every stage of your journey, from your first store to full-scale expansion, as you will be opening a retail business in Japan in no time!
Final Checklist
- Have you chosen between a KK or GK?
- Do you have ¥5 million in capital or hiring two people?
- Do you have a location secured that meets the visa requirements (if you need one)?
- Do you have the correct permits? If you’re dealing with food, alcohol, or secondhand goods, it’s best to apply early so you’re not scrambling later.
- Planning to live in Japan? Make sure you apply for a business manager visa!
- Want to grow your business even further? Reinvest profits and apply for subsidies in Japan
- Make sure you stay compliant after incorporation! Keep up with tax filings, renew your permits and visa on time, and don’t forget to plug into the local startup community; you’ll learn a lot from your senpais.
Opening a Retail Business in Japan: Costs, Legal Steps, and Growth Strategy
