Starting A Business In Japan

Businesses are no longer exclusive to domestic markets, as they operate on an increasingly global scale. The development of a contemporary company often includes the establishment of overseas branches and subsidiaries. Starting a business in Japan can prove to be an excellent entry point into the Asian market.

Asia has become one of the world's most dynamic and competitive markets, prompting many companies to establish branches on the continent. Situated in the heart of Asia, Japan plays a key role in the continent's economic development since the latter part of the 20th century. Today, as Japan faces rapid economic changes across all industries, foreign companies face potential crises. Considering the complexity of Japan's tax system and legislation, it can be difficult for foreign companies to establish themselves in the country without the assistance of a highly knowledgeable, professional business consulting firm.

Tokyo Consulting Group, established in 20 countries across Asia, is at an advantageous position in the globalizing market for business setup in Japan. With our knowledge, experience, and resources, we can help you at every step of the way when opening a business in Japan.

An Overview of How to Start a Business in Japan

Before starting a business in Japan, a company has to be registered as a legal entity. For instance, when opening a bank account, a newly established business in Japan will be required to show a certificate of registration as legal entity. The business will be recognized as such after having completed registration of its branch office or company.

Tokyo Consulting Group is composed of professionals who are highly experienced in establishing and registering offices and parent companies in Japan, and who are prepared to provide any services to fulfill customers' requirements in a proper and immediate manner. Since 1998, we have continually enhanced and updated our knowledge base through our professional experience and market research. Thus, Tokyo Consulting Group has the ability to provide the necessary information and services for opening a business in Japan.

What advantages does Tokyo Consulting Group offer?

When you start a business in Japan, you have to plan every aspect of the incorporation, such as Japanese law, regulations, customs, and so on.

Strategies for Business Setup in Japan

There exists several possibilities for setting up a company in the country. We can answer your questions on how to start a business in Japan and suggest the best business model depending on the company's characteristics. The most common models are:

Kabushiki Kaisha is similar to joint stock corporation in the United States, and is often used in setting up a business in Japan. Large scale corporations always choose Kabushiki Kaisha (KK), because a variety of methods are available to gather investment (for example, stock options and convertible bonds).When starting a business in Japan using KK, the main considerations to remember are:

Office: Must be in Japan

Capital: JPY 1 or more (formerly, the capital had a lower limit of JPY 10,000,000, but this restriction was lifted in May 2006)

Business purpose: A company should register specific business purposes in Japan, even if the parent company is allowed to do everything that is legally allowed in its original country.

Officers: At least one director is required for the establishment of a KK. In case a KK intends to form a board of directors, at least three directors and one auditor are necessary. One or more of the directors should be representative directors, and at least one representative director should be a resident of Japan.

Unlike a company, setting up a branch does not require new articles of incorporation. Instead, an affidavit must be prepared for certification by the embassy of the company's original country in Japan. If your country's embassy does not provide notary services, certification by a public notary in your home country is acceptable. The registration process is relatively simple. Expenses start at approximately JPY 90,000; name seal expenses and services fees paid to professionals, however, still apply. There are no significant differences between the rules and restrictions that apply to the business activities of companies and those that apply to branches.

Establishing a representative office is a very effective method of setting up a business in Japan when the company is still at the advertising or market research stage of its expansion into Japan. While a representative office cannot perform actual business activities, it generally does not have to be registered, so registration costs do not apply and tax notices do not need to be submitted. To engage in business activities, a representative office only needs to be registered as a subsidiary or branch as described above.

Representative Service is a type of outsourced business setup in Japan in which a representative is sent to agents to perform accounting or taxation work for a temporal or permanent time frame. Sudden shortage of human resources or a need for extra staff or specialists during overwhelming seasons is usually when a company needs representative service.

Tokyo Consulting Group has the ability and a long running history in successfully providing this type of service. The representative service provides the company with any replacement staff for accounting, labor, and tax-related tasks. However, accounting rules and processes are different for each entity.

Our professional staff has experience from several companies, with credentials such as Japan CPA and USCPA, which enables our team to create financial statements under Japanese GAAP, US GAAP, or IFRS. Furthermore, the majority of our staff members possess Japanese national credentials for social insurance or public tax accounting. Thus, Tokyo Consulting Group is composed of experts in their own fields, but is still characterized by strong teamwork and network, and the capability to serve companies worldwide, regardless of scale.

We guarantee to provide services with the highest level of professionalism at reasonable prices, by finding the maximum efficiency and effective ways in solving our clients' problems. Our staff can answer inquiries on how to start a business in Japan, and meet promptly with prospective customers using English, French, Chinese, Spanish, Portuguese, Mongolian, and Khmer.

Tokyo Consulting Group can complete all registration procedures necessary for starting a business in Japan. Send us a message, or call us at +81-3-5369-2930 to learn more about our full range of services for organizations that need help with opening a business in Japan.