Good to know
Good to Know
- Owning and being a director of a Japanese company from abroad is legal, but it does not by itself let you live in or actively manage the business inside Japan — that requires a separate visa such as the Business Manager Visa.
- A Godo Kaisha (GK) is usually the pragmatic choice for solo foreign founders: it's cheaper, faster to set up, and gives identical liability and tax treatment to a KK under the Companies Act, even though a KK carries more prestige with Japanese banks and corporate clients.
- Budget extra time for the corporate bank account, not the registration itself — this is consistently the step that surprises foreign founders, since banks scrutinize non-resident-owned entities closely for anti-money-laundering reasons.
- The company seal (hanko/inkan) is still functionally essential in Japan for contracts, banking, and official filings, even though it's not always a strict legal requirement in every context.
- The advertised 23.2% national corporate tax rate is not what a company actually pays — once national local corporate tax, prefectural enterprise tax, and inhabitant tax are layered on, the real effective rate for most small/medium foreign-owned companies in Osaka lands around 30-35%.
- Choosing between a Godo Kaisha (cheaper, simpler, ~¥100,000 to set up) and a Kabushiki Kaisha (~¥250,000, more formal, generally seen as more credible by Japanese banks and clients) is purely a governance/credibility decision — both are taxed identically, so it shouldn't be treated as a tax-optimization choice.
- Filing deadlines in Japan are strict and calendar-based regardless of whether the company is managed from abroad — the corporate tax return is due two months after fiscal year-end, and even an approved filing extension does not delay the tax payment deadline itself.
- A sole proprietorship (Kojin Jigyo) is the cheapest and fastest way to start working legally, but it cannot be used to obtain a business visa — you need an existing visa status (e.g. spouse, permanent residence, long-term resident) that already permits self-employment before registering one.
- New companies typically get a consumption tax (10%, Japan's VAT-equivalent) exemption for their first two fiscal years, which is worth factoring into early pricing and invoicing decisions.
Entity Types
- Other Forms
- A branch office or representative office of a foreign parent company is also possible but requires a Japan-resident representative for the branch and is not a separate legal entity (parent company remains liable).
Godo Kaisha Gk
- Governance
- No board of directors or shareholder meetings required; simpler and cheaper, but carries less prestige than a KK with Japanese banks/clients/partners.
- Requirements
- Skips the notarization step entirely, and capital does not need to be deposited into a bank account before incorporation — the representative member can simply issue a receipt for the investment funds.
- Description
- Japan's LLC-equivalent (合同会社), introduced in 2006; used by major US multinationals' Japan subsidiaries including Apple Japan, Amazon Japan and Google Japan.
Kabushiki Kaisha Kk
- Governance
- Subject to stricter Companies Act rules (e.g. shareholder meetings), though minimal for a small single-owner KK.
- Requirements
- Needs at least one representative director (no residency requirement) and Articles of Incorporation notarized by a Japanese notary public before filing.
- Description
- Japan's traditional joint-stock corporation (株式会社), the most credible and recognized structure, generally required for firms seeking outside investment, stock options, or an eventual public listing.
Typical Cost Breakdown JPY
Notarization of Articles of Incorporation (KK Only; Not Required for GK)
- Notarization Of Articles Of Incorporation (KK Only; Not Required For GK)
- ¥50,000
JPY
JPY
Company Seal (Hanko) Set
- Company Seal (Hanko) Set
- ¥20,000
JPY
Business Tax And Structure Options
- Jurisdiction Note
- Corporate tax law in Japan is set nationally by the National Tax Agency (NTA), with prefectural and municipal governments (here, Osaka Prefecture and Osaka City) administering the local layers. Osaka is not a special case like Tokyo, which levies a higher-than-standard enterprise tax rate on larger firms — Osaka Prefecture applies the standard national enterprise tax rate table.
Filing Obligations
- Consumption Tax
- Japan's consumption tax (equivalent to VAT) is 10%. A company must register and start charging/remitting it once annual taxable revenue exceeds JPY 10 million, assessed on a two-year lookback basis. New companies typically get an exemption for their first two fiscal years.
- Blue Form Status
- Applying for 'Blue Form' (aoiro) tax return status within three months of incorporation is considered a day-one priority for foreign-owned companies, since it unlocks a multi-year loss carryforward and enhanced depreciation deductions not available to standard ('white form') filers.
- Extension Caveat
- A one-month filing extension can be requested in advance for valid reasons (e.g. delayed shareholder meeting or audit), but this only extends the filing paperwork deadline — actual tax payment is still due on the original date, and late payment triggers automatic daily penalties and interest.
- Standard Deadline
- Final corporate tax return, local corporate tax, enterprise tax, and inhabitant tax returns are all due within two months after the end of the company's fiscal year — this single two-month window covers all national and local layers simultaneously.
- Consumption Tax Threshold
- ¥10,000,000
- Multi Prefecture Note
- If the company later opens offices outside Osaka Prefecture, enterprise tax and inhabitant tax must be apportioned and separately filed across each prefecture where it has a business location.
Corporate Tax Structure
- SME Preferential Rate
- Companies with paid-in capital of JPY 100 million or less (the common bracket for foreign-owned GK/KK startups) benefit from a reduced 15% rate on the first JPY 8 million of annual taxable income, with 23.2% applying above that.
- Effective Combined Rate
- Most sources converge on an effective combined corporate tax burden (national + all local layers) of roughly 30%–35% of taxable income for a typical SME, somewhat lower (around 30–31%) for large corporations.
- National Corporate Tax Rate
- 23.2% standard rate on taxable income for companies with paid-in capital over JPY 100 million.
- National Local Corporate Tax
- A fixed national surtax of 10.3% of the corporate tax liability itself, applied on top of the national corporate tax.
- Enterprise Tax And Inhabitant Tax
- Osaka Prefecture levies enterprise tax (income-based for SMEs; income + value-added + capital-based for larger firms) and corporate inhabitant tax (a per-capita levy plus a tax on the corporate tax amount), both administered locally but calculated under nationally set formulas.
- Description
- A company operating in Osaka pays four layered taxes rather than one single 'corporate tax': national corporate tax, national local corporate tax, prefectural/municipal corporate inhabitant tax, and prefectural enterprise tax (plus a special corporate business tax collected alongside enterprise tax).
Structure Options For Foreigners
- Crossover Point
- A commonly cited rule of thumb is that once a sole proprietor's annual taxable profit climbs to roughly JPY 8–9 million, the progressive personal income tax rate starts to exceed the flat/preferential corporate rate, making incorporation (GK or KK) worth evaluating on tax grounds alone — separate from the liability and credibility reasons to incorporate.
Godo Kaisha Gk
- Taxation
- Taxed under the same corporate tax structure as a KK (national corporate tax + local corporate tax + enterprise tax + inhabitant tax) — the GK/KK choice is a governance and credibility decision, not a way to reduce Japanese tax liability.
- Ownership
- 100% foreign ownership is permitted with no nationality restriction, and since a 2015 rule change a Japan-resident director address is no longer required to incorporate.
- What It Is
- Japan's LLC-equivalent, introduced in 2006, offering limited liability with simpler governance than a KK — no notarization of articles, no mandatory annual shareholder meetings, and no requirement to publicly disclose financial statements.
- Typical Setup Cost
- ¥100,000
- Note
- Several large US tech companies run their Japan subsidiaries as GKs (e.g. Apple Japan, Amazon Japan, Google Japan), partly because the structure can be treated as pass-through for US parent-company tax purposes — a consideration relevant mainly to those with a US tax nexus, not a change to Japanese tax treatment.
Kabushiki Kaisha Kk
- Taxation
- Subject to the identical national + local corporate tax stack as a GK; no separate 'KK tax rate' exists.
- Governance
- Requires notarized articles of incorporation and at least one annual shareholders' meeting, even for a single-owner company, adding more ongoing formality than a GK.
- What It Is
- Japan's traditional joint-stock company structure, generally seen as more credible with Japanese banks, larger clients, and government-related counterparties, and typically expected for Business Manager Visa applications.
- Typical Setup Cost
- ¥250,000
Sole Proprietor Kojin Jigyo
- Taxation
- Profits are taxed as the owner's personal income under Japan's progressive national income tax (up to 45%) plus a roughly 10% local inhabitant tax, rather than at flat corporate rates.
- Liability
- Unlimited personal liability — the owner's personal assets can be pursued for business debts.
- What It Is
- A Kojin Jigyo is not a separate legal entity — the individual and the business are legally the same person, so there's no minimum capital requirement and no company registration with the Companies Act.
- Registration
- Setup is simply filing a Notification of Business Commencement (開業届, Kaigyo Todoke) at the local tax office (Zeimusho), generally expected within about a month of starting.
- Eligibility Caveat
- A sole proprietorship can only be operated by a foreigner who already holds a visa permitting self-employment (e.g. spouse, permanent resident, or long-term resident status, or specific permission on another work visa) — it cannot itself be used to obtain a business visa.
- Blue Return Deduction
- Using Blue Return (aoiro) double-entry bookkeeping and e-filing unlocks a special deduction of up to JPY 650,000 from taxable income; simpler Blue Return bookkeeping without e-Tax gives a smaller JPY 100,000 deduction.
- Individual Business Tax
- Sole proprietors above a certain profit level also owe a separate prefectural individual business tax, generally around 5%, charged on income exceeding a standard deduction.
- Blue Return Max Deduction
- ¥650,000
- Individual Business Tax Deduction Threshold
- ¥2,900,000
Timeline
- Gk
- GK registration itself typically completes 7–10 business days after documents are ready, since it skips the notary step.
- Kk
- KK registration typically takes 2–4 weeks from filing to completion with standard processing, longer than a GK due to the added notarization step.
- Expedited Option
- Some prefectures, including Osaka, offer same-day or next-day expedited processing for KK filings for a modest fee premium, cutting Legal Affairs Bureau filing time from the standard 3–5 business days down to about 1 business day.
- Bank Account Opening
- Opening a corporate bank account is frequently the slowest and least predictable step, commonly adding 2–6 weeks on top of registration, and can stretch to 3–4 weeks total or more if documents require re-submission — a significant share of foreign-owned applicants report at least one round of resubmission for anti-money-laundering document checks.
- Realistic End To End
- A realistic end-to-end estimate — from starting paperwork to a registered company with a working bank account — commonly cited as roughly 4 to 10 weeks for a straightforward GK/KK setup, and 3 to 5 months if a Business Manager Visa application is bundled in.
- Pre Filing Preparation
- Pre-filing preparation (drafting Articles, name check, gathering documents) usually takes 1–2 weeks for Japan-based founders, but several weeks longer for non-residents due to apostille, embassy/consulate notarization of signature certificates, and international document requirements.
Core Steps
Core Steps
- 1. Decide entity type (KK vs GK) and confirm the company name is not already registered in the Legal Affairs Bureau's commercial registry (names are not reservable in advance).
- 2. Draft the Articles of Incorporation (Teikan) in Japanese, covering company name, business purpose, head office address, capital, fiscal year, and director/shareholder details.
- 3. For a KK only: have the Articles notarized at a Public Notary Office; a GK skips this step entirely.
- 4. Deposit the initial capital — for a KK this typically means transferring funds into a personal bank account (often the founding director's) and obtaining a certificate/bank statement as proof; a GK does not require pre-incorporation bank deposit, a receipt from the representative member suffices.
- 5. Order and prepare to register a company seal (kaisha inkan) — still commonly required for official filings, contracts and bank account opening.
- 6. File the Articles of Incorporation and supporting documents at the Legal Affairs Bureau (Homukyoku) covering the registered office address (for Osaka-based companies, the Osaka Legal Affairs Bureau).
- 7. Receive the certificate of registered matters and the company's 13-digit corporate number once the Bureau approves the filing.
- 8. Open a corporate bank account (a separate, often slower process — see timeline notes).
- 9. File post-incorporation notifications with the national tax office, local tax office, social insurance office, and labor standards office.
Official Links
Minimum Capital
The statutory minimum capital for both KK and GK is JPY 1, so there is no general legal minimum capital requirement for incorporation itself.
Jurisdiction Note
Company registration in Japan is a national (not city-specific) process, filed with the Legal Affairs Bureau (Homukyoku) covering the prefecture where the registered office sits — for Osaka this is the Osaka Legal Affairs Bureau, part of the Ministry of Justice's registry network.
Who Can Incorporate
- Foreign Ownership
- Foreign nationals and foreign corporations can own 100% of a Japanese company; there are no nationality restrictions on founders or shareholders under the Companies Act.
- Practical Reality
- Despite the 2015 change, most major Japanese banks still refuse to open a corporate bank account when the representative director is not a Japan resident, citing anti-money-laundering rules, so many foreign founders still use a resident director/representative (temporarily, via a nominee, or a trusted local partner) purely to get the bank account open, even though it is not a legal incorporation requirement.
- Kk Resident Incorporator Nuance
- For a KK, a resident incorporator who holds at least one share at the moment of incorporation is commonly used as a practical workaround; that share can be transferred to the real foreign owner immediately after the company is formed.
- Resident Director Legal Requirement
- Since a March 2015 Ministry of Justice policy change, Japan no longer legally requires a Kabushiki Kaisha (KK) representative director or a Godo Kaisha (GK) representative member to be a resident of Japan.
Typical Total Cost Estimate
- Gk Low End
- ¥100,000
- Kk Typical
- ¥250,000
- Note
- GK formation is roughly a third of the cost of a KK because it skips notarization; full-service packages that include scrivener/legal support commonly run ¥200,000–¥500,000 for a KK.
Local Partner Or Sponsor Mandate
There is no legal mandate for a local partner or shareholder — foreigners can hold 100% of shares/membership interests. The practical constraint is banking, not ownership: without a Japan-resident director, opening a corporate bank account is significantly harder, which is why many non-resident founders arrange a resident director or local administrative partner even though it isn't a statutory requirement.
Business Manager Visa Capital Note
This is separate from incorporation: to obtain the Business Manager Visa to actually live in Japan and run the company on-site, current guidance cites a minimum capital deposit of ¥30 million into a Japanese bank account plus a physical office and business plan — incorporation itself does not require this amount.
AI-generated estimateData refreshed July 2026
Sources cited for this category
These are the sources cited in this business permits & incorporation for foreigners research for this city. Individual figures may not each trace to one of them.
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Data last updated July 2026 · Verify anything important.