Japan Company Incorporation: Step-by-step Guide

Japan Company Incorporation

Tetra Consultants advises you to read through this guide to fully understand the steps required for Japan company incorporation and set up a bank account in Japan.

In essence, your engagement will be broken down into 4 phases:

1. Planning and strategy
2. Incorporate
3. Bank account opening
4. Staying compliant

By systematically following the above 4 phases, you can expect to start conducting business with your Japan company within 7 weeks.

Step 1: Planning and Strategy

• Depending on the nature of your business entity, you should consider the type of business structure you would like to adopt. There are 6 main types of business entities that Japan companies usually adopt:
  • Kabushiki-Kasha (KK) / Joint Stock Company
  • Godo-Kaisha (GK) / Limited Liability Company
  • Gomei-Kaisha / General Partnership
  • Goshi-Kaisha / Limited Partnership
  • Representative Office
  • Branch Office
• After understanding your business goals and activities, our team of dedicated consultants will recommend the most suitable corporate entity for you to carry out your business. Prior to incorporating your Japanese company, you will be advised on the optimum paid-up share capital, corporate structure, legislations and whether there is a need to apply for any licenses to operate.
• Before Tetra Consultants can incorporate your company in Japan, you are required to provide a list of required KYC documents. Some of these documents include the names of directors, company’s resolution and identification proof.
• Tetra Consultants will reserve your preferred company name with the Registry Office. According to the business activity and corporate structure, Tetra Consultants will also draft articles of incorporation, business plan and other incorporation documents.
• Paid up share capital will be required to be injected before we incorporate your Japan company. If our clients do not have a Japan business partner who owns a Japan personal or corporate bank account, Tetra Consultants will be able to assist with this matter.

Step 2: Incorporation

Prepare and notarise the Articles of Incorporation

• The Articles of Incorporation, which are important documents that determine how the company will be managed, should be prepared in accordance with Japan Company Act. Details to be decided in the Articles of Incorporation include:
  • Company address
  • Company’s activities
  • Administration
  • Corporate capital
  • Fiscal year
• Additionally, the Articles of Incorporation has to be notarised at the Notary Office. It is only necessary for Kabushiki-Kaisha (KK), not for Godo-Kaisha (GK).

Prepare the Application Form for Registration of Incorporation of Your Company and attached documents

• After the Articles of Incorporation is prepared, other relevant documents are necessary to be prepared. Examples of the documents to be attached include:
  • Registry certificate of the parent company issued within 3 months.
  • Notarized Signature attestation of the parent company’s representative.
  • Seal certificate (inkan shomeisho) (issued within 3 months) of each director (and private investor if there is any).
  • Signature (or seal) of the Representative of the parent company and each director is required on the Articles of Incorporation and other required documents.
  • The Representative Director’s personal bank account and their passbook (tsucho) / bank statement to be used for the deposit of capital.
  • Company seal that needs to be registered at the registry office.

File the application form for registration and attached documents to the Legal Affairs Bureau

• Once the company is registered, it is possible to obtain a registry certificate and company’s seal certificate. Company seals are necessary for bank transactions, official corporate use and unofficial use.
• Upon receiving all the necessary documents, Tetra Consultants will proceed to draft and notarize the company’s Memorandum and Articles of Association.
• These documents, once confirmed, will be translated by our team into Japanese before submitting to the Japan Legal Affairs Bureau.
• We will then proceed to file for registration.
• After receiving approval, Tetra Consultants will courier the Certificate of Incorporation, Memorandum and Articles of Association and other corporate documents to your preferred address.
• If necessary, our team will further translate the documents received into English for your perusal.
• Should you have to meet additional compliance requirement of a registered legal address, Tetra Consultants will also provide you with one.

Submitting notifications for tax, payroll and the approval of blue tax returns to the District Tax Office 

• Once incorporated, the Japanese corporation will be issued a 13-digit Corporate Number by Japan’s National Tax Agency after completing VAT registration. It can be used for identification and application for different services. The Corporate Number was introduced to streamline the administrative processes such as tax, security and disaster control.

Step 3: Bank Account Opening

• After registration, Tetra Consultants will assist you in opening a corporate bank account. Our team has established partnerships with multiple reputable banks in Japan. We will present your business to each relationship manager and compliance team.
• Typically, a corporate bank account opening will take roughly four weeks. In most cases, the directors and shareholders are not required to travel. However, if travel is required, we will have a representative accompany you to the bank meeting. Alternatively, our team will negotiate with the banks to conduct a conference call instead or to request for a waiver.
• While nominee directors are not necessary for the setup of your company, you may still require one to set up your bank account.
• If necessary, we will provide you with a suitable, fit and proper nominee director.
• As the meetings will be conducted in Japanese, our team will also send a representative to attend the meeting so that any potential communication barrier can be overcome.
• Once your account has been successfully opened, Tetra Consultants will courier the internet banking token and access codes to your preferred address.
• Some of the international reputable banks we work with include Mizuho Bank, Sumitomo Mitsui Banking Corporation and MUFG Bank. By engaging our services, you can leverage on our full portfolio of banking partners.

Step 4: Staying Compliant

• Following the setup of your new Japan corporate home, Tetra Consultants will continue to provide you with the necessary accounting and tax services to ensure that you can continue to legally conduct business while staying compliant to regulatory obligations.
• Our team of dedicated consultants will timely prepare your firm’s financial statements, corporate tax returns and manage bookkeeping on your behalf.
• We will prepare the required filings in advance to ensure we meet all stipulated deadlines.
• Generally, the corporate tax rate is held at 23.2% for all ordinary corporations with share capital exceeding JPY 100 million.
• Other applicable tax schemes also include local inhabitants and local enterprise tax.

What are Tax Identification Numbers (TIN) & how to find company number?

• Tax Identification Numbers comprise of:
  • Individual Numbers
  • Corporate Numbers
• Everyone registered as a resident in Japan is assigned a unique Individual Number, which is a 12-digit number. Foreigners with certain status, such as a medium-to long-term resident status or a special permanent resident status, also receive Individual Numbers.
• Corporate Number, also known as company number, is a 13-digit numbers issued to registered corporations. Finding your Japanese corporation tax reference number is simple. The corporate number is published through the Internet (Corporate Number Publication Site). Information to be made public is comprised of 3 components (Basic 3 Information): include trade name or name of the association that has been designated a Corporate Number, address of head or principal place of business, and Corporate Number.

Why choose to register company in Japan?

Prior to Japan company incorporation, it is important to understand the business landscape of the jurisdiction. This is to ensure that your newly established entity will be able to safely and legally conduct business, while striving towards your long-term business goals.

• Japan is synonymous with quality and innovation, which boasts a highly attractive business environment within one of the world’s largest economies. This is due to Japan’s R&D capabilities, personnel and well developed laws, such as intellectual property rights.
• Japan has established a strong reputation as a major international financial centre. The Global Financial Centre Index published in 2021 ranks Japan as the 7^th best financial centre in the world. The Tokyo Stock Exchange is also the largest exchange in Asia and the 3^rd largest exchange in the world.
• Japan is the 2^nd largest country in Asia by GDP and 3^rd largest in the world. It also has access to a 127 million-strong audience. With its strategic location, Japan is the gateway to Asian economies.
• According to the Global Competitiveness Report published by the World Economic Forum, Japan was awarded a score of 82.3. As such, Japan is ranked the 6th most competitive country across the globe.
• Japan has currently signed double taxation agreements (DTA) with 96 countries. It provides tax relief for businesses where income arises from cross-border economic activities between the two countries.
• The company documents and government letters are in Japanese. Tetra Consultants will ensure that there is minimal miscommunication despite the language barrier.

Contact us to find out more about Japan company incorporation. Our team of experts will revert within the next 24 hours.

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