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Business Permits & Incorporation for Foreigners in Tokyo

Good to know

Good to Know

  • You do not need a Japanese partner, sponsor, or co-shareholder to incorporate in Tokyo — 100% foreign ownership of a KK or GK is standard and has no special approval process for most ordinary business sectors.
  • A Godo Kaisha (GK) is usually the faster, cheaper route for a solo nomad or small team since it skips notarization entirely; a Kabushiki Kaisha (KK) costs and takes a bit more but carries more prestige with Japanese banks, landlords, and enterprise clients.
  • Even though a Japan-resident director is no longer legally required, budget extra time (and possibly a nominee/resident representative) for the corporate bank account step — this is where most foreign-only-director companies actually get stuck, not at the Legal Affairs Bureau.
  • Incorporating your company and getting a visa to personally live in Japan and run it are two separate processes with different requirements — don't assume registering a KK/GK automatically lets you relocate to Tokyo.
  • If your long-term plan includes a Business Manager Visa, be aware the capital and hiring requirements jumped sharply in an October 2025 reform, so budget and plan for the current (much higher) thresholds rather than older figures still floating around online.
  • A sole proprietorship (Kojin Jigyo) is the cheapest and fastest way to start working independently in Japan — no capital, no incorporation fee — but you're personally and fully liable for business debts, and profit is taxed as personal income rather than at the corporate rate.
  • A Godo Kaisha (GK) is generally the lower-cost, lower-hassle company option versus a Kabushiki Kaisha (KK) since it skips the notarization step and formal shareholder/board structure — worth considering if credibility with big Japanese counterparties isn't your main priority.
  • Setting up a company (KK/GK) does not by itself authorize you to live and work in Japan managing it — that typically requires a separate Business Manager visa with its own capital and office requirements, which have gotten stricter since October 2025.
  • If your annual consumption tax-registered revenue exceeds JPY 10 million, you'll need to start charging and remitting 10% consumption tax (8% on some goods) — factor this into pricing and invoicing as you scale.
  • This entry covers business-level structure and corporate tax mechanics only — your personal income-tax residency situation as a foreigner living in Tokyo is covered separately under Visa & Legal.

Filing Obligations

Quarterly Payments
Companies are generally required to make quarterly (interim) corporate tax payments during the fiscal year rather than a single year-end payment.
Registration Bodies
Corporate registration is filed at the Legal Affairs Bureau (company seal registration, certificate of registered information); tax registration and ongoing filings go to the local tax office (Zeimusho) and the National Tax Agency (NTA).
Annual Return Deadline
The standard annual corporate tax return deadline is 30 days after the fiscal year-end.

Blue Form Status

Benefit
Blue Form status extends the annual tax return filing deadline to 60 days after fiscal year-end (versus the standard 30 days) and unlocks other tax benefits (e.g. loss carry-forward).
What It Is
A company or branch office that files a notification of establishment with the National Tax Agency within 60 days of establishment can elect 'Blue Form' (aoiro) status.

Corporate Tax Overview

Statutory National Rate
The headline national corporate income tax rate is 23.2% for companies with paid-in capital over JPY 100 million; smaller companies (paid-in capital of JPY 100 million or less) get preferential lower brackets on the first tranche of income.
Dividend Withholding Tax Percent
20.42% (15.315% national + 5% local) on dividends distributed to shareholders, subject to reduction under applicable tax treaties.
Upcoming Changes
A new Defense Special Corporate Tax (calculated as 4% of the base corporate tax amount, after a JPY 5 million basic deduction, with its own separate return) applies for fiscal years beginning on or after 1 April 2026, on top of existing rates.
Description
Japan taxes domestic corporations (Kabushiki Kaisha/KK and Godo Kaisha/GK) on worldwide income; a foreign company only becomes taxable in Japan if it has a permanent establishment (PE) here, in which case the PE's Japan-attributable profit is taxed at domestic rates.

Consumption Tax VAT

Reduced Rate Percent
8
Standard Rate Percent
10
Registration Threshold
Businesses generally must register for and start charging Japanese consumption tax once annual taxable revenue exceeds JPY 10 million.

Effective Combined Rate Tokyo

Figure Source Range
Multiple sources place the effective combined statutory rate for a typical Tokyo SME (paid-in capital ≤ JPY 100 million) at roughly 30.6%–34.6%, with the exact figure depending on capital size, income level, and whether enterprise tax deductibility is factored in.
Note
The number a company actually pays is higher than the 23.2% national headline rate because Tokyo layers on local corporate inhabitant tax, enterprise tax, and special corporate business tax on top.

Freelancer Sole Proprietor Vs Company

Crossover Point
Because personal progressive income tax can reach 45% while the effective corporate rate tops out well below that, many sole proprietors switch to a KK/GK once taxable business income climbs into roughly the JPY 8–9 million range, as the flat corporate rate becomes more favorable than the personal bracket at that income level.
Visa Linkage Caveat
Forming a KK/GK does not itself grant a visa. Actively managing the company from within Japan generally requires a Business Manager visa, which has separate, tightened capital and office requirements as of the October 2025 reforms — this is a business-structure/tax note, not a personal visa determination.

Company Kk Or Gk

Taxation
Both KK and GK profits are taxed under the corporate tax regime described above rather than as personal income, and both are separate legal entities offering limited liability.
Conversion
A sole proprietorship can later be converted into a KK or GK if the business grows, though this involves additional legal procedures and cost.
Structures
Foreign founders typically choose between a Kabushiki Kaisha (KK, a joint-stock company similar to a corporation) and a Godo Kaisha (GK, Japan's LLC-equivalent introduced in 2006).
Gk Characteristics
A GK is cheaper and faster to set up — no notarization requirement — and operates without formal shareholder meetings or a board; owners act as 'members' similar to an LLC. Some large foreign companies (e.g. Google, Amazon in Japan) use the GK structure for their Japan entities.
Kk Characteristics
A KK is Japan's most established corporate form and can convey more credibility with Japanese banks, clients, and partners, but requires notarization of articles of incorporation and has more formal governance (shareholder meetings, directors).
Capital Requirement
Japan has no general statutory minimum capital requirement for KK or GK registration itself (a company can technically be capitalized with JPY 1), though visa-linked capital thresholds apply separately (see below).

Sole Proprietorship Kojin Jigyo

Setup
Registration is a simple Notification of Commencement of Business (開業届, Kaigyo Todoke) filed at the local tax office (Zeimusho); there is no minimum capital requirement and no government registration fee.
Taxation
Business profit is taxed as the owner's personal income under Japan's progressive national income tax brackets (5%–45%) plus local inhabitant tax, rather than at a flat corporate rate.
Visa Caveat
This is a tax/registration structure, not a visa. A foreigner can only lawfully operate one while holding a residence status that permits self-employment (e.g. Permanent Resident, Spouse of Japanese National, Long-Term Resident) or after obtaining specific 'Permission to Engage in Activity Other Than That Permitted Under the Status of Residence' for most standard work visas — a tourist visa or visa waiver never permits it.
Legal Nature
The individual and the business are the same legal entity — there is no separate corporate structure, meaning unlimited personal liability for business debts.
Who It Suits
Freelancers, independent consultants, remote contractors, small traders, and content creators who want minimal administrative overhead.
Japanese Term
個人事業 (Kojin Jigyo)

Typical Cost Estimates

Recommended Practical Starting Capital
¥1,000,000

Not legally required, but this is the level most advisors and banks expect to see for a new entity to be taken seriously and to smooth corporate bank account opening.

Godo Kaisha GK

Government Registration Tax
¥60,000
Notes
GK avoids notary fees entirely, which is the main reason it is cheaper and faster than a KK.

Typical All In Cost DIY To Light Professional Help

Low Estimate
¥60,000
High Estimate
¥600,000

Kabushiki Kaisha KK

Government Registration Tax Minimum
¥150,000
Notes
The wide range reflects whether the founder self-files with just a judicial scrivener (司法書士) for the notarization step, or engages a full-service bilingual law/accounting firm to manage apostilles, translations, and bank liaison for a foreign parent company.

Notarization Of Articles

Low Estimate
¥30,000
High Estimate
¥50,000

Typical All In Cost Using A Scrivener Or Law Firm

Low Estimate
¥250,000
High Estimate
¥1,200,000

Entity Types Available To Foreigners

  • Godo Kaisha (GK)
    Minimum Capital
    No statutory minimum; ¥1 is technically sufficient, though most advisors recommend at least ¥1,000,000 for banking credibility.
    Description
    Japan's LLC-equivalent, introduced in 2006. Lower cost, no notarization of articles required, no mandatory shareholder meetings or board — the standard low-friction entry vehicle for foreign-owned subsidiaries.
  • Kabushiki Kaisha (KK)
    Minimum Capital
    No statutory minimum; ¥1 is technically sufficient, though most advisors recommend at least ¥1,000,000 for banking credibility.
    Description
    Japan's joint-stock corporation, the most recognized and prestigious structure, generally preferred where outside investment, share issuance, or maximum market credibility with Japanese banks/clients matters.

Core Steps

Core Steps

  • Choose entity type (GK or KK) and decide on a company name in Japanese, checking availability/trademark conflicts.
  • Draft the Articles of Incorporation (Teikan) in Japanese, specifying capital, business scope, and directors/members.
  • For a KK only: have the Articles notarized by a Japanese notary public (adds a fee; not required for a GK).
  • Deposit the paid-in capital into a Japanese bank account (this can be an incorporator's/founder's personal account pre-registration, or via a third-party account holder with a Power of Attorney if all incorporators/directors are non-resident) and obtain a payment certificate/bank evidence.
  • Register a company seal (daihyo-in) and, where applicable, obtain a seal certificate.
  • File the incorporation application, Articles, payment certificate, and signature certificates for non-resident directors/incorporators at the Legal Affairs Bureau (Houmukyoku) covering the company's registered address (e.g. the Tokyo Legal Affairs Bureau for a Tokyo address).
  • Pay the Registration and License Tax at filing (KK: 0.7% of capital, minimum ¥150,000; GK: minimum ¥60,000).
  • Receive the company registry certificate and 13-digit Corporate Number (Houjin Bangō), published on the National Tax Agency's site.
  • Complete post-registration filings: corporate and local tax office registration, social insurance/pension enrollment if hiring, and (separately) open a corporate bank account.

Realistic Timeline

Corporate Bank Account Caveat
Opening a corporate bank account afterward is frequently the real bottleneck for foreign-owned entities and can add several additional weeks beyond the registration date itself, especially with only non-resident directors.
Godo Kaisha GK
Registration itself at the Legal Affairs Bureau typically takes about 1-2 weeks once documents are filed; including document preparation, capital deposit, and immediate post-registration filings, the whole process typically runs 2-6 weeks.
Kabushiki Kaisha KK
Registration typically takes about 2-3 weeks at the Legal Affairs Bureau once filed (longer than GK because Articles must first be notarized); total elapsed time from kickoff to final registration is typically quoted at 4-8 weeks, extending further if a foreign parent company's corporate documents need apostille and certified translation, which is often the single longest step.
Online Filing Option
Single-member KK and GK filings can be submitted online via Japan's Registration and Deposit Online Application System, and in straightforward digital cases can be approved in as little as 24 hours; standard Legal Affairs Bureau processing once a complete application is filed is officially targeted at about three business days.

Office Address Requirement

Every KK or GK must list an official head office address in Japan at registration. A virtual office address is legally accepted for the incorporation filing itself, though it must be a real physical location able to receive official correspondence.

Local Partner Or Sponsor Mandate

Details
Japan does not require a local partner, sponsor, or Japanese shareholder. A foreign individual or foreign corporation can hold 100% ownership of a Japanese company, and there are no nationality restrictions on founders, shareholders, or directors under the Companies Act. Since a March 2015 Ministry of Justice rule change, a Japan-resident director is no longer legally required for either a Kabushiki Kaisha (KK) or a Godo Kaisha (GK) — even a sole non-resident director/member is legally permitted, and applications will be accepted even if all representative directors live abroad.
Required
No

Official Registry And Government Links

Official Registry And Government Links

  • Ministry of Justice (Legal Affairs Bureau) — Procedures of commercial and corporation registration for foreign nationals and expatriates: https://www.moj.go.jp/ENGLISH/m_minji06_00004.html
  • JETRO (Japan External Trade Organization) — official reference guide for foreign companies setting up in Japan

Distinct From Incorporation Do Not Confuse

Separate Note On Work Visa Sponsorship
For simply sponsoring a work visa for an employee (not the Business Manager visa itself), the capital benchmark commonly cited by advisors remains ¥5,000,000, unaffected by the October 2025 reform.
Business Manager Visa Capital
¥30,000,000
Business Manager Visa Reform 2025
Effective October 16, 2025, Japan significantly tightened Business Manager visa requirements: the capital threshold rose to ¥30,000,000, and new rules require hiring at least one full-time employee with unrestricted work authorization, a professionally prepared business plan, a physical (non-virtual) office, at least three years of relevant management experience, and Japanese language ability around N2 level. Existing visa holders have a transition period until October 16, 2028 to comply.
Work Visa Sponsorship Capital Reference
¥5,000,000
Note
Incorporating a company in Japan does NOT itself grant a visa or the right to live in Japan and personally manage it. A separate Business Manager Visa (経営・管理ビザ) is required if a founder wants to reside in Japan to run the business themselves.

Practical Caveat On Resident Representative

While not a legal requirement, most nomads/founders still end up appointing a Japan-resident representative or nominee director in practice, because major banks (Mizuho, MUFG, SMBC) conduct thorough anti-money-laundering due diligence and are far more willing to open a corporate account when a locally accessible representative exists; smaller net/regional banks (e.g. Rakuten Bank, PayPay Bank, Shinsei Bank, Resona Bank) are generally more flexible with foreign-only-director companies.

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.

  1. 1.moj.go.jp

More About Tokyo

Data last updated July 2026 · Verify anything important.