How to start a business in Japan – beginners guide
What comes to your mind when you think about Japan? Innovative solutions, artificial intelligence or creative investitions? Undoubtedly, the country is a high-tech place with good-qualified labor and one of the best infrastructures in the global perspective. Japan has a booming economy and (just after the USA and China) it is on the 3rd place on the list of the largest economy in the world. Such an impressive position is owed to Japanese electronic engineering, automotive industry, and the optics. This is a place where were established leading companies we have surely heard about: Nikon, Toshiba, Sony, Casio or Toyota. So there is no wonder if you think about starting a business in Japan – the country where it would have promising conditions to succeed. What is more, we would like to help you in realizing this idea, so look at the article below and find out how to start a business in Japan.
1. Choose the structure of your company
On the premise that you have already known the thing you would deal with, it’s the time for formal issues. You need to choose the form of your business and there are some possibilities to consider:
1.1 Stock Company
Stock Company (Kabushiki Kaisha) is the main form of business in Japan, where shareholders and members have limited liability, the minimum capital is 1 yen and there is a requirement of certification of incorporation.
1.2 Limited Liability Company
Limited Liability Company (Godo Kaisha) as the name suggests it is the type of business where members have limited liability. For establishment Limited Liability Company you can be the only one investor and the minimum capital is 1 yen.
1.3 General Partnership Company
If we want to trade under the General Partnership Company (Gomei Kaisha) we need to have minimum of 2 investors, there are no requirements for certification of articles of incorporation and the liability of partners is unlimited – it means that their personal assets (cars, houses etc) are taken for repaying debts and damages connected with business.
1.4 Limited Partnership Company
Presented type of business is not often chosen by foreign investors. In Limited Partnership Company (Goshi Kaisha) there are limited and unlimited liabilities. Partners with limited liability are responsible only to the amount of the amount they contribute in. There is no regulation about minimum capital in this form.
Another option is a Joint Venture with an existing Japanese company. Commonly, after this process, they become a Stock Company or Limited Liability Company. Deciding for Joint Venture has many advantages – we cooperate with an entity which knows the ropes (especially the formal ground), has a customer base and suppliers connections, so it would be an easier way for starting a company in Japan for sure.
2. Incorporation process in Japan
When you decide what type of business is this proper one and find the city where it would be established, there is a time for legal actions.
2.1 Gather necessary documents
Your formal adventure starts with gathering documents. There is some required information you are obliged to present:
- the confirmation of the seal of each investor,
- passbook and the bank statement, where the capital is deposited,
- signature certificate (approved by competence institution from home country),
- articles of incorporation.
What is more, you should prepare a succinct business plan. This is the foundation of every company no matter what type of business it is. The document should contain the purpose of your company, marketing matters, management operations, and competition analysis. Try to avoid long and repetitive sentences and remember about Japanese language version.
2.1.1 Article of Incorporation
The Article of Incorporation includes the company name, which might be worded either an alphabet or numbers, as long as it isn’t the name which was already used. Other elements of the mentioned document are company address and company activities. Determine what exactly you are going to do under your business. Do not forget about pointing the fiscal year and company capital. We have already known that the minimum sum is one yen. If you want to try to get Japan Investor Visa, you need much more this amount… something about 5 000 000 yen more.
2.2 File the application form
When we prepare essential documents, we can file the application form and pay a registration fee. For a Stock Company the amount is 150 000 yen and for other forms of business 60 000 yen. Afterward, if your submission is accepted, you would get a registry certificate and your company seal certificate which is required for opening a company bank account.
The registration process takes about 2-4 weeks. If you want to take up work which is related to having a special license, the time might be longer and lasts even three months.
3. Japan Investor Visa
The registration process is done, but there is another duty you should perform if you think about starting a business in Japan. Firstly, you need to obtain Japan Investor Business Manager Visa (well-known as Japan Investor Visa). It is a necessary document if you want to live and do business in Japan. Application for a visa can be provided in twofold ways – when we set up a company from scratch or manage the business which has been established in Japan already.
3.1 Visa for a new company
Launching a start-up in Japan imposes obligations on Applicant, who has to have an office in Japan and capacity to hire at least two employees (they can be Japanese, people with other nations who get Japanese Permanent Resident Visa or long term foreign residents) or has a capital in the amount of 5 000 000 yens.
3.2 Visa for an existing company
If you decide to manage the existing company, the requirements for an Applicant are a bit different. You have to have experience in management and business operations – at least three years (studying mentioned fields might be included in that time). Additionally, your remuneration cannot be less than the one you would get in Japan for this kind of work.
3.3 Japan Investor Visa – how to get it?
Meeting the conditions from previous points, lets you go on. Now, you have to present the operations which would be provided under your company and submit the required documents:
- Business Plan,
- Statement of profit and loss,
- Copy of company registration,
- Information about employees,
- Confirmation of investor qualifications.
If the documents are correct, you can apply for Certificate of Eligibility (COE). It is a special certification which allows you to perform a particular job. The Applicant is obliged to file a motion in the regional immigration office in Japan personally or on behalf of a certified immigration specialist. There aren’t any possibilities to settle the legalities by the electronic way and you had better be patient because the process takes about four to six weeks. What is more, keep in mind that Japan Investor Visa is tenable and typically after one year it has to be renewed. If you do not want to keep busy by a pile of formality, you can use the services of special consulting companies, which specialize in supporting foreigners who aim at opening a business in Japan.
4. Business in Japanese – find your way
Among different types of business, there is the one which would be the most relevant for you. In every case, you need to gather the necessary documentation and perform the required capital, which lets you open a business in Japan and be competitive then. As a non-resident, you are also obliged to submit an application for Japan Business Visa and if you do not want to take it up yourself to do formality, there are many consulting companies with proper qualifications and experience which supports you in every action. No matter if you use the services of other entities or you decide to go on your pat – we keep our fingers crossed and hope we would hear about your company soon!
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