Your Company Incorporation in Japan: The Essential Primer
Master the essential fundamentals of company incorporation in Japan. Find out the key decisions you will face, common pitfalls to avoid, and get a step-by-step checklist to guide you on your journey.
The paperwork and procedures for incorporating a company in Japan can take from 2 to 3 weeks—but much, much longer if you make mistakes on various applications and need to file do-overs.
Meticulous preparation is critical in minimizing errors and ensuring you come through with your sanity intact.
Here are 4 decisions to make pre-paperwork, 9 steps to complete your journey, and 5 common mistakes to avoid.
✅️ Decisions to make pre-paperwork
Before starting any paperwork, you will need to make the following decisions regarding your company. These decisions will come up during the paperwork process, so prepare yourself and your partners in advance.
Decision 1. Decide on company type.
If you are bringing your company to Japan, you have a few options. You could open a branch office or establish a subsidiary company—either a stock company, Kabushiki-Kaisha (KK), or a limited liability company, Godo-Kaisha (GK).
Branch office. Branch offices allow you to buy and sell goods and are under the company's head office's governance, with daily running capability but without decision-making power, so they are not required to have corporate status and are easy to set up.
Kabushiki-Kaisha (KK). A KK is a corporation with stock options, allowing you to raise capital as needed and investors to receive dividends. This is the most well-established company type in Japan but has the highest number of procedures to get started.
Godo-Kaisha (GK). A newly developed limited liability company type, with fewer requirements than a KK, GKs are an option for those who wish to operate on a smaller scale and aren't interested in selling company stocks.
Decision 2. Decide on your company name.
When filing paperwork for your company, you will need to list the name of your company. Regulations surrounding your company's name include the following:
You cannot choose a name already in use. There is an online portal (Japanese) where you can search for trade names.
You must not include any special characters, such as (?) or (;). English alphabet letters are OK to use, along with all Japanese alphabets and kanji.
Be aware that restrictions surround the terms "Bank" and "Securities," as these come under the jurisdiction of other laws.
Decision 3. Determine the location of your office.
Choose the location of your head office before you register for company incorporation in Japan. This is because your head office location will determine the correct Legal Affairs Bureau (also referred to as a Registry Office) and notary public office to which you will submit your incorporation documents.
For instance, if you live in Tokyo, you must file company incorporation paperwork with the Tokyo Legal Affairs Bureau. Also, the notary who notarizes your incorporation documents must reside within the same city as your head office. Here is a list (Japanese) of all Legal Affairs Bureau's and their jurisdictions.
Decision 4. Determine whether you will have a board of directors.
If you are the sole investor of a company, it is unnecessary to establish a board of directors. A company can be established with one director, and there is no further need to appoint other company roles. However, if there are many shareholders in your company, you may wish to appoint a governing board of directors, although it is not mandatory.
If you decide on a board, appoint no less than 3 directors and an auditor, who will report to shareholders on the board's financial and operational decisions (the auditor is often external to the company).
🗺️ A step-by-step guide
Here are the actions and forms you will be required to enact and submit as you incorporate your company and set up shop in Japan.
Step #1: Make a company seal.
A company seal is necessary for preparing documents for incorporation. So it is best to make a corporate seal before starting on the paperwork.
The cost for creating a company seal is typically ¥10,000 for a machine-carved seal or ¥20,000 for a hand-carved seal. Once you have had this created, register it with the Legal Affairs Bureau to receive a seal certificate.
Aside from a company seal, you will need to create personal seals and registered seal certificates for each of your directors. These, too, are required and necessary throughout the company incorporation process.
Step #2: Create Articles of Incorporation.
The crucial step in the process is creating the "Articles of Incorporation" document. The document must include the following information:
Company name (trade name)
Head office location
Purpose (business objectives)
The amount of capital invested for company establishment
Names and addresses of founders/incorporators (individuals or corporations)
The number of authorized share of stocks
Date of incorporation
This document may also include points on shareholders, shareholder meetings, directors, supplementary provisions, etc. There are templates and examples of descriptions (Japanese) available on the Legal Affairs Bureau's official site.
However, you don't need to create this document alone. At least 90% of the struggle and difficulty can be eliminated by hiring a native Japanese bilingual business assistant to help you create necessary documents. We can't emphasize that enough.
After creating the Articles of Incorporation document, affix the founders’ personal seals, and then make three copies.
Step #3: Get notarized.
After creating your company's Articles of Incorporation, you will need to get them notarized (teikan no ninsho) by a notary office affiliated with the Legal Affairs Bureau in charge of the region where the company is to be registered. Search here for a list of notary offices (Japanese).
Get in touch with the appropriate office, decide on a date, and make an appointment with a notary public for this procedure. Prepare the following items for your appointment:
3 copies of the Articles of Incorporation
Seal registration certificates of all the incorporators
Revenue stamp ¥40,000
Registered seal of the incorporators or a personal stamp and an authorization letter for representatives
Payment of ¥50,000 for the notary public
Issuance fee of ¥250 per copy for Articles of Incorporation
If your company has more than one founder/incorporator, they must all go to the notary office on the appointed day. Or make sure to bring an authorization letter for the representative going in his/her place. You could also ask a TokyoMate Assistant to go on your behalf!
Alternatively, you could use a service, such as Maru-Notary.com, to get your Articles of Incorporation notarized online. An explanation of the e-notarization system can be found on page 14 of this English-language PDF, published by the Japan National Notary Association. Or check here for more information in Japanese.
Step #4: Deposit capital.
Deposit capital into a designated bank account. Once that is complete, preserve a copy/scan of the cover, the backside of the front cover with personal information, such as name and address, and a copy of the inside, showing the bank balance.
You will need these copies to prove the capital deposit when you register/submit your Articles of Incorporation to the Legal Affairs Bureau.
Step #5: Register Articles of Incorporation.
After completing all the previous steps, you are now ready to gather the documents needed to register the company to the Legal Affairs Bureau. The following is a complete list of each document that must be created and submitted at this stage:
☐ Application for Authority to Do Business
登記申請書 = touki shinseisho
This document notifies the Legal Affairs Bureau of the establishment of a company. Necessary entries vary by company types, so make sure to check example entries (available on the Legal Affairs Bureau).
☐ Registration License Tax Payment Slip
登録免許税納付台紙 = tourokumenkyozei noufuyoudaishi
The registration license tax payment slip is a piece of paper pasted with the revenue stamp worth the registration license tax. For stock companies (kabushiki kaisha), the stamp is ¥150,000. For limited liability companies (godo kaisha), the stamp is ¥60,000.
☐ Articles of Incorporation
定款 = teikan
Prepare a copy of the Articles of Incorporation. See Step #2.
☐ Founders' Written Decision
発起人決定書 = hokkinin ketteisho
The founders' written decision is required in cases where the Articles of Incorporation do not include the head office's full address.
☐ Letter of Acceptance of Appointment from the Director
就任承諾書 = shuninn shoudakusho
This document will prove the elected individual accepted the appointment as a representative director.
☐ Letter of Acceptance of Appointment from the Auditor
就任承諾書 = shuninn shoudakusho
This document is necessary if your company has appointed an auditor.
☐ Director's Seal Registration Certificate
取締役全員の印鑑証明書 = torishimariyaku no inkanshoumeisho
If there are multiple directors, get seal registration certificates for each director. (The representative director's certificate will suffice if you have installed a board of directors.)
☐ Seal Notification Form
印鑑届出書 = inkan todokedesho
This is the required document for registering the corporate seal created in Step #1.
☐ Documents proving capital deposit
Create a document proving the capital deposit. See Step #4.
Once all the documents have been double-checked, submit them to the application desk of the Legal Affairs Bureau presiding over your jurisdiction. The registry process generally takes around 7 to 10 days, during which your application is vetted. If the office finds a mistake in your application, they will contact you by phone, and you will need to visit the Legal Affairs Bureau to correct the error.
If you haven't heard back from the city office after 10 working days, it is generally safe to assume all is well. And you can proceed with the following post-incorporation procedures (Steps #6 to #9).
Step #6: Notify/file at the tax office.
Submit the following documents to the tax office after incorporation:
☐ Notification of Incorporation
法人設立届出書 = houjin setsuritsu todokedesho
☐ Notification on the Establishment of a Salary-Paying Office
給与支払事務所等の開設届出書 = kyuuyoshiharai jimushyotou no kaisetsu todokedesho
☐ Application for Filing the Blue Return
青色申告の承認申請書 = aoiroshinkoku no shouninnshinseisho
☐ Application for Special Approval Concerning Payment Date of Income Tax Withheld at the Source
源泉所得税の納期の特例の承認に関する申請書 = gensenshotokuzei no nouki no tokurei no shyouninn ni kansuru shinseisho
Step #7: Notify/file at a Labor Standards Inspection Office.
File the following labor insurance forms and employment rules at a Labor Standards Inspection Office:
☐ Notice of Establishment of Labor Insurance Affiliation
労働保険関係成立届 = roudouhokenkankei seritsutodoke
☐ Tax Return for Estimated Insurance Premium for Labor Insurance
労働保険概算保険料申告 = roudouhoken gaisan hokenryou shinkoku
Step #8: Notify/file at a Japan Pension Service Office.
File the following forms for health insurance/public welfare pension at a Japan Pension Service office.
☐ Notification of New Application for Health Insurance and Employee's Pension
健康保険・厚生年金保険新規適用届 = kenkohoken, kouseinenkin hoken shinki tekiyoutodoke
☐ Notification of the Acquisition of Eligibility for Health Insurance and Employee's Pension
健康保険・厚生年金保険被保険者資格取得届 = kenkohoken, kouseinenkinhoken hihokensha shikakushutokutodoke
☐ Notification of Dependents Eligible for Health Insurance
健康保険被扶養者届 = kenkohoken hifuyoushatodoke
Step #9: Notify/file at a Public Employment Security Office.
File the following forms for employment insurance at a Public Employment Security Office.
☐ Notice of Establishment of a Workplace Covered by Employment Insurance
雇用保険摘要事務所設置届 = koyouhoken tekiyou jimusho secchitodoke
☐ Notice of Acquisition of Eligibility for Employment Insurance
雇用保険被保険者資格取得届 = koyouhoken hihokensha shikakushutokutodoke
🛑 Common pitfalls to avoid
A mistake on any of the forms you submit could trigger delays. Here are some common mistakes to watch for.
Mistake #1. Abbreviating addresses.
Addresses on the "Articles of Incorporation" application and other applications must not be abbreviated. Do not use hyphens to designate street addresses. Use kanji in street addresses. For example, 「一丁目3番1号」not "1-3-1."
Mistake #2. Forgetting or stamping in the wrong place.
With so much paperwork to go through, it's easy to overlook a document where you must place your stamp. Double check and then triple check.
Mistake #3. Using the incorrect seal for a document.
There are various seals you will be required to have created and use throughout the incorporation process. Each form will require the use of a specific seal. Be sure to double-check that you are using the correct seal for each document that requires a seal stamp.
Mistake #4. Forgetting to include "kabushiki kaisha."
The company name you register in your Articles of Incorporation must be written in its complete form, which means including the term "Kabushiki Kaisha."
Mistake #5. Not including future business plans.
When writing out your business objectives in the Articles of Incorporation, your work will be limited to the purpose within the business outline. Make sure you carefully think about the future of your business, as well as the immediate services you will be providing.
If the registry office finds some incompleteness, description error, or mistake—and the error can be easily corrected—they will ask you to update the document. However, if the error is large enough for the entire form to need re-filing, then the whole application will be refused. You will be asked to file the paperwork again using a new document.
💡 Final thoughts
Some of the steps outlined in this article will vary dependent on factors particular to your company setup. Also, please note that all documents must be in Japanese. There are English-language examples of company incorporation documents online. However, these cannot be used as-is. Your documents must be in Japanese.
Perhaps the most valuable advice to offer you is this: hire a business assistant to help you fill out the various forms, as this will save you so much time and struggle.
TokyoMate Assistant provides experienced guidance and support so you can get your application approved in record time. Try us out with a 30-day moneyback guarantee!