FAQ

1. Why do I need to hire someone to set up a company for me in Japan?
Would I be able to do it by myself?

Hiring an experienced third party provider to set-up your business in Japan significantly simplifies the entire process and minimizes the time necessary. Further it helps you to avoid unnecessary cost by using standardized processes and documents. If you should decide to do the registration of a branch or the incorporation of a subsidiary on your own, your company will require someone who is present in Japan and can personally deal with the Legal Affairs Office and a Japanese bank. The person also needs to be able to speak, read and write Japanese or have a reliable translator since all documentation is handled in Japanese. Further, staff at the banks as well as at the Legal Affairs Office are rarely able to speak English.
Moreover, the process of incorporating a company includes a lot of going back and forth from the bank to the Legal Affairs Office, and is, therefore, often handled inefficiently. Hiring a law firm dealing with the documentation is one option but this still requires someone in Japan who can deal with all other relevant matters like opening a bank account and applying for the various corporate seals (Hanko).
Further, it is necessary to have someone who is legally resident in Japan to serve as a representative director of the Japanese company.

2. Which kind of legal entities suitable for foreign companies exist in Japan and where are the differences?

Basically, there are two options for foreign companies to operate a business in Japan. The first option is to set-up a branch office in Japan. The second option is to set-up a subsidiary with liability limited to the subsidiary’s capital. For a detailed overview on the differences between a subsidiary and a branch office please take a look a the “Branch or Subsidiary” section on our website. (add link)

3. Are there any important laws and regulations I should be aware of before setting up a company in Japan?

You should be aware that when you decide to set up a branch office in Japan rather than a subsidiary, liability in contract and labor disputes can reach the parent company abroad. Therefore, we recommend to the majority of our customers to set-up a subsidiary to create a legal shield. Further, a subsidiary also provides recognition by local customers and employees of your full commitment to the Japanese market.

4. Which costs are involved in setting up a company in Japan?

Besides the time and effort involved, the filing of a company in Japan involves various charges by different entities. The list below provides an approximate overview on the fees charged when you decide to file a company individually.

Cost occurring for the incorporation of a Subsidiary

  • Registration tax                                                            150,000 yen
  • Stamp tax                                                                     40,000 yen
  • Certified copy of articles of incorporation                   3,000 yen
  • Corporate seals (Hanko)                                              3,000-20,000 yen
  • Bank handling fee                                                         ???
  • Law firm fee for drafting documents                           200,000-500,000 yen
  • Notary fee for certification of articles of incorporation 50,000 yen

The total amount of fees and taxes ranges between 400,000-750,000 yen, not including expenses for time and travel. In case you decide to file your company in Japan with J-Seed the quoted prices for setting up a branch (500,000 yen plus 5% consumption tax) or subsidiary (1000,000 yen plus 5% consumption tax) are fixed quotations and include all related fees.

5. How long does it take for a company to be set up in Japan?

As a rule of thumb, it requires roughly a month to set-up a company in Japan. Once the form provided on the website is filled out properly and all required documents are submitted it takes approximately two weeks to register a company. As soon as the company is registered it is possible to begin operations in Japan. Approximately two weeks after the registration of the company, an official confirmation will be provided by the Legal Affairs Office. Thus, the whole process until proof of the registration is obtained, takes roughly one month. In case you decide to set-up a branch in Japan you must provide a translation of various corporate documents which must be certified by the embassy or consulate of the country of incorporation. The whole process requires approximately one month.

6. Do I have to hire staff from the first day?

It is not necessary to hire staff from the first day. In case of setting up a branch office or subsidiary though you will need to register someone who is resident in Japan who is willing to serve as a representative or representative director, respectively. The representative or representative director can be of any nationality.

7. Do I need a physical office in Japan to set up a branch or subsidiary?

No, an address you are legally entitled to use for purpose of registration is sufficient. For this purpose you could for example rent a virtual office as long as the company providing the virtual office address allows it. We recommend double-checking this aspect with the virtual office provider and as the case may be to upgrade to an appropriate package or change the service provider accordingly.

8. Do I have to wait until the company is incorporated to start my business in Japan

To prevent personal or parent company liability issues you should register a branch or set-up a company before starting to operate your business in Japan. Once the company is incorporated (approximately two weeks after submitting the form and all necessary documents) business can be started with limited liability. Nevertheless, we recommend waiting until you receive the final confirmation from the Legal Affairs Office to minimize your risk.

9. How long does it take to obtain working visas for foreign staff?

Working visas take 1 month to obtain. However, in the case of a new entity it may take 2-3 months. Qualification, country of citizenship and capitalization of the parent company as well as the company in Japan are factors which heavily influence the duration and probability of obtaining a working visa. After the subsidiary is incorporated you can apply for a certificate of eligibility (CoE).

10. What cost is involved in obtaining working visas for foreign staff?

The cost to obtain a working visa ranges from 100,000 to 300,000 yen per person (and 20,000-30,000 yen for each dependent family member) and is handled by a so-called “Gyoseishoshi” a type of administrative lawyer specializing in visas and other administrative matters.

11. What company information do I have to disclose when setting-up a company in Japan?

The degree of company information needed to be disclosed depends on whether you decide to set-up a branch or a subsidiary. In the case of setting-up a branch certain financial information of the parent company such as the number of shares issued and outstanding, number of authorized shares, and paid-in capital, etc. is required. In case of setting-up a subsidiary in Japan only information of the subsidiary’s capitalization needs to be disclosed.