Countries JapanBusiness Guide

🇯🇵

Start a Business in Japan

Complete guide: entity types, registration, costs, taxes, labor laws, and break-even analysis

~35 days

Setup Time

~$800

Setup Cost

23.2%

Corporate Tax

100%

Foreign Ownership

#29

Ease of Business

Entity Types

Entity	Min Capital	Foreign %	Liability	Min Shareholders	Best For
Kabushiki Kaisha (KK) 株式会社	1 JPY	100%	Limited	1	Standard corporation — most credible, best for large operations
Godo Kaisha (GK) 合同会社	1 JPY	100%	Limited	1	Similar to US LLC — simpler, cheaper to set up, used by Amazon/Google Japan
Branch Office	None	100%	Unlimited	0	Extension of foreign parent — taxed on Japan-source income

Entity

Min Capital

Foreign %

Liability

Min Shareholders

Best For

Kabushiki Kaisha (KK)

株式会社

1 JPY

100%

Limited

Standard corporation — most credible, best for large operations

Godo Kaisha (GK)

合同会社

1 JPY

100%

Limited

Similar to US LLC — simpler, cheaper to set up, used by Amazon/Google Japan

Branch Office

None

100%

Unlimited

Extension of foreign parent — taxed on Japan-source income

Registration Steps

Prepare Articles of Incorporation

Draft and notarize articles (teikan) at public notary

1-3 days

~$350

Public Notary

Deposit Capital

Deposit capital into representative's personal account (pre-registration)

1 days

Free

Bank

Submit registration application to local Legal Affairs Bureau

3-10 days

~$450

Legal Affairs Bureau

Tax Registration

1-7 days

Free

NTA

3-7 days

Free

Japan Pension Service

Workers' compensation and unemployment insurance

3-7 days

Free

Labor Standards Bureau

Total Estimated

35 days max$800

Tax Framework

Corporate Income Tax23.2%

Effective rate ~30% including local taxes. SMEs (<¥8M capital): 15% on first ¥8M profit. R&D tax credits up to 14%.

Consumption Tax10%

Personal Income Tax5-45%

Capital Gains Tax20.315%

Dividend Withholding20.42%

Tax Treaties83 countries

Tax Incentive Zones

National Strategic Special Zones offer regulatory reform, not direct tax incentives. Okinawa offers special tax rates.

Labor Laws & Costs

$1300/mo

Minimum Wage

$3200/mo

Average Wage

40 hrs/week

Work Hours

10 days/year

Paid Leave

4 weeks/year

Severance

15.5% of salary

Employer Social Security

15.5% of salary

Employee Social Security

Required

Foreign Worker Permit

Foreign Worker Quota: Business Manager visa for company founders — requires ¥5M capital or 2+ full-time employees

Business Environment

#29/190

Ease of Business Rank

11 days

Starting a Business

13 days

Registering Property

360 days

Enforcing Contracts

73/100

Corruption Perception

93%

Internet Penetration

JPY

Currency

UTC+9

Time Zone

Japanese

Investment Zones & Provinces

Tokyo

Province

Kanto

Incentives

Global financial hubStartup visasJ-Startup support program

Key Sectors

FinanceTechServicesMedia

Osaka

Province

Kansai

Incentives

Global Innovation HubLower cost than TokyoManufacturing base

Key Sectors

ManufacturingPharmaTourismIR

Fukuoka Startup City

Tech Hub

Fukuoka

Incentives

Startup visa (6 months)Subsidized office spaceTax breaksLowest costs among major cities

Key Sectors

Tech startupsGamingCreative industries

Break-Even Analysis

Retail (months)

F&B (months)

Tech (months)

Manufacturing (months)

Services (months)

Typical Operating Costs in Japan

Office Rent	$45	per sqm/month
Skilled Worker Salary	$4,000	per month
Unskilled Worker Salary	$2,000	per month
Electricity	$0.25	per kWh
Business Internet	$40	per month
Est. Monthly Overhead (5-10 staff)	$30,000	per month

Break-Even Calculator

Total Investment (USD)

Monthly Revenue (USD)

Monthly Costs (USD)

Tax rate applied: 23.2% (corporate rate)

Never

negative cash flow

$-11,520

monthly net profit

—

annual ROI

$—

total cost to break even

Key Considerations for Foreign Investors

100% foreign ownership allowed in all sectors — Japan is one of the most open economies

Business Manager visa requires ¥5M capital (~$35K) or hiring 2+ full-time employees

Japanese is essential for daily operations — English-only businesses struggle outside B2B tech

Lifetime employment culture means high severance expectations — hiring decisions are critical

Shrinking population (-0.5%/yr) creates labor shortage but also market contraction risk

J-Startup program provides government-backed support for innovative companies

Real estate is accessible to foreigners — one of few Asian countries allowing full ownership

Last updated: 2025-Q4

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Entity	Min Capital	Foreign %	Liability	Min Shareholders	Best For
Kabushiki Kaisha (KK) 株式会社	1 JPY	100%	Limited	1	Standard corporation — most credible, best for large operations
Godo Kaisha (GK) 合同会社	1 JPY	100%	Limited	1	Similar to US LLC — simpler, cheaper to set up, used by Amazon/Google Japan
Branch Office	None	100%	Unlimited	0	Extension of foreign parent — taxed on Japan-source income

Entity

Min Capital

Foreign %

Liability

Min Shareholders

Best For

Kabushiki Kaisha (KK)

株式会社

1 JPY

100%

Limited

Standard corporation — most credible, best for large operations

Godo Kaisha (GK)

合同会社

1 JPY

100%

Limited

Similar to US LLC — simpler, cheaper to set up, used by Amazon/Google Japan

Branch Office

None

100%

Unlimited

Extension of foreign parent — taxed on Japan-source income