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Company Formation Japan

General Guide to Company Incorporation in Japan

Updated on Thursday 29th June 2017

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What is the minimum share capital of a limited liability company in Japan?

The Japanese legislation doesn’t require a minimum share capital at the registration of a limited liability company.

What is the minimum share capital of a joint stock company in Japan?

 

The new Commercial Code, introduced in 2006, has abolished the former law, which stipulated that a joint stock company in Japan must deposit a minimum share capital. Now, every entity may establish this type of business without a minimum share capital. Investors interested in starting a company in Japan can also open a partnership, either a silent partnership or a general partnership. 

 

Are there any specific requirements for establishing an international business company in Japan?

 

A limited liability company in Japan is a form of business chosen by small and medium businesses. The members are liable only to the extent of their contribution to the company’s capital. Unlike the joint stock company, all the members of the company may represent it, until a manager is appointed. Their contribution can be made in cash but also in non-cash assets.
 

It’s mandatory that all the company’s members must be in favor of a certain decision to make it applicable, such as the articles of incorporation’s amendments, the transfer of ownership, transforming the limited liability company into a joint stock company or liquidate it. Our company formation experts in Japan can assist businessmen in every procedure mentioned above, from drafting the articles of association of a new company to liquidating an insolvent company.

 

What are the taxes for companies in Japan?

The standard corporate income tax rate in Japan is 23.4%. Those who open a company in Japan will also pay the local inhabitants tax and the local enterprise tax, both imposed at a local level by the municipalities or prefectures and may vary according to the size of the company. a 20% withholding tax applies on dividends, royalties, and interest. The real property tax, stamp duty, and social security are other examples of taxes payable by companies. Japan has signed many double tax treaties with countries worldwide. These provide relief from double taxation on most types of income, provided that the corporation derives income both from Japan and from another country with which a treaty is signed. 

 

How can I register for VAT in Japan?

 

The equivalent of worldwide VAT in Japan is the Consumption Tax, which is imposed at a rate of 8%. The classic registration for CT is not mandatory for the companies; the Tax Authorities check the first tax filing and determine if the company is a CT taxpayer depending on the taxable sales during the fiscal year. Domestic transactions such as transport services offered in Japan are subject to the consumption tax. The CT is expected to increase to 10% in the coming years but at the same time, a reduced rate of the current 8% will remain in place for certain goods. 

 

How can I open a bank account in Japan?

 

In order to open a corporate bank account in Japan the following documents are usually necessary: the company’s registration documents, the company’s representative’s name and address, a Hanko (which is the official seal of the company), recommendation letters from another bank, from a lawyer or from an accountant, and utilities bills which prove the residence of the company.
Our company registration consultants in Japan can help you set up a corporate bank account.

 

How can I recruit personnel in Japan?

 

The workforce from Japan consists of well trained, educated and loyal employees. The government offers incentives to companies that hire disadvantaged personnel (old workers for example). After hiring, the companies must elaborate carefully the employment contract, since the law is very advantageous for the workers.
 

The personnel may be recruited with the help of the recruitment agencies or by posting ads in a newspaper or on specialized websites.

 

What is the average salary in Japan?

 

The average salary in Japan is around 320.57 JPY thousand per month, depending on the business field and qualifications. 

 

What is the overall economic situation in Japan?

 

Even though lacking land for cultivation or consistent natural resources, Japan is considered one of the major economic powers of the world. The small cultivable areas have a terracing system, this assuring the world’s highest level of harvest per unit area. Almost 15 % of the Japanese territory is cultivated this way.

 

50 % of the Japanese imports consist of grains and meat. The local fishing industry is highly developed. 

 

The industry and the manufacturing sectors are very developed, especially sub-sectors like electronics, machine tools, ships, chemical substances and motor vehicles. The main export partners for these products are EU, United States of America, Hong-Kong, etc.

Many financial services companies are located in Japan and large foreign corporations have branches opened in Japan.


Foreign investors who are considering starting a company in Japan or expanding their businesses in this jurisdiction can benefit from our vast experience in company incorporation cases.

 

Please get in touch with our company registration agents in Japan who will help you establish your business in the country as fast as possible.

 

 

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