Flourishing with various opportunities for investment, availability of different free trade zones to cater to the wants of local and global businesses, government incentives, and straightforward processes – these are just some of the reasons for a company formation in Japan.
How to register your Japanese company
Before commencing your company formation in Japan, you have to make the following decisions regarding your company. These decisions will come up during the paperwork process, so take the time to plan.
Decide on your type of Japanese company
If you are bringing your company to Japan, you have a few options. You could open a branch office or create a subsidiary company – a stock company (Kabushiki-Kaisha/KK), or a limited liability company, (Godo-Kaisha/GK).
- Branch Office
If an entrepreneur is going for company formation in Japan, then using this structure would be adequate. Normally, foreign companies which are incorporated outside Japan would use this structure to carry out operations. If the company wants to regularly do business in Japan, then this type of entity can be established.
- Joint Stock Company Kabushiki Kaisha (KK)
This is a corporation with stock options, enabling you to raise capital as desired and investors to receive revenues.
KK shareholders have the status of limited liability. Companies that desire corporate governance structures can utilize this form of organization.
- Godo Kaisha (GK)
This structure of company was initiated in 2006 through the Japanese Companies Act. For this type of entity, limited liability status is also present for the shareholders. Though, there is more flexibility pertaining to management decision-making. When compared to KK, the annual submission costs are lesser for GK. Utilizing this structure has a lot of tax benefits.
Decide on your company name
When documenting paperwork for your company, you have to list your company’s name. The company name can be in alphabet, numbers, hiragana, kanji, or katakana. It is possible to select any name as long as there isn’t another company of similar name registered at the exact address. Even though it is unlikely, it is recommended to check in advance if there are any other companies with similar names elsewhere or if the trademark is registered, to avoid any difficulties.
Determine the location of your office
Decide on your head office’s location before registering your company in Japan. Your head office location will clarify the appropriate Japan Legal Affairs Bureau and notary public office to which you will submit your company incorporation documents.
Determine whether you will have a board of directors
Creating a board of directors isn’t necessary if you are a company’s sole investor. But, if there are multiple shareholders in the company, you can appoint a governing board of directors, although it is not compulsory.
If you appoint a board, assign at least 3 directors and an auditor, who will report to shareholders on the board’s financial and functioning decisions.
Step-by-step process to start your company in Japan
Outlined below are the actions and documents you will be required to perform and submit as you incorporate your company in Japan.
Step 1. Determine your office location.
You’ll require an office address for listing in your documents and to indicate the Legal Affairs Bureau that has jurisdiction over where you will be filing your paperwork.
Step 2. Make a company seal.
A company seal is important for preparing documents for company incorporation in Japan, so it’s crucial to make a corporate seal before commencing the paperwork.
Once you have made the corporate seal, you have to register it with the Legal Affairs Bureau in order to receive a seal certificate.
Besides the corporate seal, you have to create personal seals and registered seal certificates for each of the company directors, as these are also required and important throughout the company formation process.
Step 3: Prepare the Articles of Incorporation (teikan)
The articles of incorporation are crucial documents that specify how the company will be governed. The Articles of Incorporation must include the following information:
- Company name
- Head office address
- Business objectives
- The amount of capital invested
- Names and addresses of founders
- The number of shares of stocks
- The date of incorporation
After formulating the Articles of Incorporation, attach the founders’ seals and make three duplicates.
Step 4. Notarization of the articles of incorporation
After formulating your company’s Articles of Incorporation, you have to get them notarized by a notary office affiliated with the Legal Affairs Bureau in charge of the district where the company will be registered.
Step 5. Deposit capital
The company’s bank account can only be opened after the registration is completed, so it is recommended to employ one of the investor’s private bank accounts in Japan to deposit the initial capital.
Step 6. Preparing documents for the company’s registration
In associate to the application form, it is important to prepare several other documents required to register the company with the Legal Affairs Bureau. The following is a detailed list of each form that must be composed and submitted:
- Application for Authority to Conduct Business
- Registration License Tax Payment Slip
- Articles of Incorporation
- The Founders’ Written Decision
- Letters of Acceptance of Appointment from both the Director and Auditor
- Director’s Seal Registration Certificate
- Seal Notification Form
- Documents verifying capital deposit
Once you have formulated all these documents, you’ll have them submitted to the Legal Affairs Bureau’s application desk presiding over your jurisdiction.
The final steps in required in Japan Company Formation
- Filing at the tax office.
- Filing at a Labor Standards Inspection Office. (This step isn’t necessary if you don’t have any employees)
- Filing at a Japan Pension Service Office.
- Filing at a Public Employment Security Office. (This step isn’t necessary if you don’t have any employees)
Being the third biggest economy in the world, Japan provides political stability, a high standard of living, and numerous tax advantages.
Japan welcomes innovative entrepreneurs. Register your Japanese company now. Contact your Damalion expert !
