How To Start A Business In Japan

When it comes to opening a business in Japan, it might sound rather challenging if you are venturing into unknown territory. However, the process has been streamlined and made more structured in Japan over the past decade. By following certain steps, establishing a business in Japan can be a relatively simple endeavor.

While there is a wealth of knowledge available on the internet, it may take a lot of time and effort to sort through all the information to find the basic facts on how to start a business in Japan. The failure to follow any of these steps could create a problem for your case. Well, that is where we come in. Here is the guide that you need to read when it comes to setting up a business in Japan.

Step 1: Obtaining a Visa to Begin Starting a Business in Japan

It should be noted that Japan’s policies do not allow foreigners to begin the process of business establishment without discretion. In order to do business in Japan, you have to get one of the necessary visas for starting a business operation.

The general procedure for getting a visa is quite simple. For business purposes, you will either require a 4-Months Business Manager Visa or a Start-up Visa. Another option is to get an Investor visa. 

4-Month Business Manager Visa

The 4-Month Business Manager Visa was launched in Japan in year 2015. If you aim to get the visa, then, you will need to prove that you are in the process of setting up a business in Japan. After securing a Japan visa, you can proceed immediately to operate your business once you arrive in the country.

All necessary documents should be submitted in advance to enable to secure the 4-Month Manager Visa as required. This visa enables you to acquire a residence permit, obtain a bank account in Japan, and, consequently, register your business. 

As soon as you register your business in Japan, you can apply for an extension of stay that is granted for one year.

Start-up Visa 

The Start-up visa is one of the wonderful ways through which Japan’s government aims to attract foreign investors into Japan. This permit is given for half a year. However, some of them are not available in different cities. At the moment it is available in Tokyo, Hiroshima, and Aichi Prefectures, Sendai City, Fukuoka City, Imabari City, and Niigata City. 

The list of documents to be provided by the applicant when applying for the Start-up Visa is very few. You will need to write your business plan in Japanese to receive a recommendation letter from the local administration. 

After arranging all the necessary documents, you can directly apply at the immigration bureau. Also, the start-up visa is extendable for another 6 months. This visa allows you to do the same things as a 4-Month Business Manager Visa which includes obtaining a residence card, opening a bank account in Japan, and registering the business. 

Investor Visa 

The investor visa is another way of coming to Japan for the opportunity to start a business as an investor. Investor visas may be issued for a period of 1, 3, or 5 years. The granted period and whether you are able to extend it depends on the business profit and the other business performance indicators. 

However, you do not have to be in Japan to apply for the investor visa. If you have the documents that are necessary for the visa application process, you may apply from the country you are living in. The procedure is relatively easy. 

Step 1 – Establish your company. 

Step 2 – You can obtain an Investor visa Certificate of Eligibility (COE) at the immigration office walk in. If you are a resident of a country other than Japan, then this is perhaps possible with the help of a qualified immigrant officer. You could spend about 2 to 3 months in order to accomplish this process. 

Step 3 – After the completion of the certificate of eligibility you will have to go and collect it from the immigration office. Now it can be exchanged for an investor status or residence (SOR) at the Embassy or Consulate of Japan. It would take you another two weeks to get the SOR. 

If you do not have the support of certified professionals in Japan, then this process would have to be managed on your own. This is the reason why many people decide to have a 4-month visa and then apply for an investor visa having settled all their business issues. 

Depending on the type of business you are going to run and your financial status, there are different document requirements for an investment visa. This is a list of the documentation that may be required in order to be eligible for an investor visa.

• Financial data
• Detailed business plan
• Documentation for company registration
• Applicable business licenses
• Leases for offices
• Your professional background
• Relevant personnel records

Opening a bank account

When discussing opening a bank account in Japan, we have to talk about the banking prospects that exist in this country.

Selecting a bank and creating an account may seem a rather daunting task to those arriving from other countries because of language and other barriers, not to mention the administrative burdens that can cause headaches to the foreigner who is going to set up their own business. Fortunately, there are lots of banks in which foreigners can apply for accounts easily in Japan.

This complicates the account registration process for foreigners and the following banks provide easy registration of accounts for a foreigner.

Sumitomo Mitsui Banking Corporation

This is a bank that was established in 1876 which makes this bank to be among the oldest banks that were established in Japan. It has good reception for foreigners, especially in the front desk section. While it is a comprehensive financial institution with a wide range of services, SMBC has specially designed its banking services for foreign investors and businessmen. Most of these services are offered in English – a factor that may enhance communication between the organizations and their counterpart foreign institutions.

Shinsei Bank

Shinsei Bank has become the hub for most foreign investors with dreams of setting up businesses within the Japanese territory. In terms of carrying out online banking nicely and properly, SB did a very good job.

The units of the bank are service-oriented, and all of the services are in English and are online. This is very much preferable since you are not required to physically go to the bank in order to open the account. You can do from online at your home. 

You will receive a cash card which functions like an ATM card but does not include ATMs. SB  has a very wide network that shows it is a big management company that is scoring high in organizing a very big company. It will be possible for individuals to withdraw money by visiting Seven Bank, ENet JR East Japan Railway, and others accordingly.

Seven Bank

Another good business bank that any entrepreneur with a business plan should consider is Seven Bank. It also opens services in English. For instance, Seven Bank’s online banking aspect can be seen as simulating those of Shinsei Bank.

Their website proves to be of great use, as it contains all the necessary guides addressing the steps of bank account registration in English. You will be able to withdraw cash through ATM machines that would be available in 7-Eleven stores, shopping malls, airports, and much more. 

Japan Post Bank

Even though the primary focus of Japan Post Bank is on postal services, the company which was established in 2006 offers banking services. It has a lot of advantages because you can easily withdraw cash across Japan.

Japan Post Bank does not charge foreign fees or have a withdrawal restriction. If you ever want to open an account through the JPB, you are issued one cash card and passbook together with an account number.

To open an account with any of the Japanese banks, you would need the following documents to fill out the account registration form. These requirements may differ from one bank to another, however, here are some of the general ones.

• Your residency rights evidence (4-month business manager visa, start-up visa, or investor visa)
• Proof of residency (you can obtain this one from the government agency of the place where you live).
• Phone number and address
• Japanese residence card
• The minimum deposit (there are no strict rules for minimum deposit amounts here, though it is possible to make a deposit of a few thousand yen on average)

For example, if you want to transfer money back home then you should look out for banks that offer the remittance service. So by using this service, you will be able to transfer money to other countries while being in Japan if you are a foreigner.

To be able to access this service, the following requirements should be met;

• Your Japanese address
• Your name (must be in katakana script, Japanese)
• Your Hanko seal (If you still don’t have your Hanko, most banks will let you use your signature.)
• Your date of birth
• PIN number for your bank account 
• Your gender

Step 2: Find an Office or a Coworking Space

The first step of setting up a business in Japan procedure is deciding upon an office or co-working space. In any case, you will need a space or a venue to operate your business. Here are two options; you can lease an office space in Japan in the short term or long term.

Short-Term Office Rentals

Currently, renting an office space is a very popular thing in Japan, especially if the rental is short-term. Japan’s commercial retail industry provided the answer to the steadily rising number of business enterprises that existed.

In Japan, short-term office spaces refer to the same thing as served offices and are commonly utilized in the country. They are much more advantageous when compared to other more conventional office rental solutions. 

• Adaptable rental agreements
• A prime business location in the town center
• Superb management services available
• Affordable initial expenses
• Provision of furniture, IT, telecommunications infrastructure, and office equipment

Long-term Office Rentals

Although services offices provide nice opportunities for start-ups who are entering Japan, often a long-term lease is preferable. Choosing the long-term rental enables the business to make necessary changes to suit its business brand image and culture.

There is no difficulty in finding a long-term rental space and this can be done independently with the help of websites where people can post the available office spaces or go through the classified advertisement sections in the newspapers. But if all this seems too much, then you can hire the services of a real estate agent to help you find a tenant.

Step 3: Prepare Your Articles of Incorporation

The Articles of Incorporation or teikan (定款) are essential documents that are inevitable when it comes to the establishment of a business in Japan. These documents determine how the company is going to be managed and are distinct depending on the structure of the business.

Since there are many and you would want it to be in a form that you can easily access and choose what you want, we have grouped them as Articles of Incorporation for a foreign individual and Articles of Incorporation for a foreign company. If you are a foreign individual who is planning to expand your business in the Japanese economy, then you will need both sets of rules.

Articles of Incorporation for a Foreign Individual 

Below is the list of documents required for any foreign individual when entering the country: 

Seal certificate or Inkan Shomeisho of investor and director – for this, you can get registered at the city hall if you are currently residing in Japan. The only document that can replace it is an instrument of signature (notarized signature). The document has to be notarized by the Embassy of Japan in your own country.

Company seal – Before it can be effective or used in court, you must register a company seal at the registry office.

Investor’s personal bank account and passbook or tsuuchou (通帳) – A bank statement is also necessary to demonstrate that the capital has been deposited. Opening a new account gives you an opportunity to start fresh on the website or use an already existing account to enter the website.

The Articles of Incorporation and other documents should be acknowledged in writing or by the signature or seal of each investor and director and every organization from which they receive contributions.

Articles of Incorporation for a Foreign Company

To start off, if you are planning to establish a company structure akin to a daughter company in Japan, the following would be required;

Mandatory Documents:

• Parent Company Verification:
  • Recent Registry Certificate (within 3 months)
  • Notarized Signature Verification of the Parent Company Representative
• Director Identification:
  • Current Seal Certificate for Each Director (within 3 months)
• Capital Proof:
  • Representative Director’s Bank Account and Statement (demonstrating capital deposit)

Additional Requirements:

• Company Seal: Registration of the company seal at the registry office is necessary.
• Articles of Incorporation: All documents, including the Articles of Incorporation, require signatures or seals from the parent company and each director.

All Articles of Incorporation and accompanying documents necessitate signatures or seals from both the parent company and each director.

Trademark Registration Process

Like most countries, Japan has trademark laws that can leave an organization or a business with trademark infringement lawsuits. In order to fully own your company, there is a need to ensure that you have registered for a trademark.

Trademark registration entails the authorities of Japan shall legally acknowledge it and will consider you as being in charge or owning the company. In other words, any mark that you want to use to identify your goods or services is not legally yours until it has been registered by the authorities.

In Japan, you can register:

• Logos: Visual representations of a brand’s identity.
• Brand names: Distinctive names used to identify products or services.
• Slogans: Catchphrases or memorable statements associated with a brand.
• Product names: Names specifically identifying goods or products.
• Service names: Names specifically identifying services offered.
• Business names: Names identifying a particular business entity or enterprise.
• Symbols: Visual representations or graphical elements associated with a brand.
• Packaging designs: Unique designs or configurations of product packaging.
• Characters: Mascots or unique characters associated with a brand.
• Combinations: Combinations of any of the above elements, creating a comprehensive brand identity.

You should go through the process of filing an application for the trademark at the Japanese Patent Office. If you have a permanent residence or office in Japan, administrative work can be performed by yourself. Otherwise, you have to involve a patent attorney or apply under the Madrid and Paris Convention agreements.

All of these are necessary in the trademark registration process:

• Trademark registration request in Japanese
• The trademark information in the application that may consist of the description, drawings, claims, and abstract in Japanese.
• The feature of the trademark may be represented in a few forms 
• A consolidated list of services and/or products that relate to a protected trademark

There would be certain expenses that you would have to pay when registering for a trademark which include: 

• ¥12,000 per trademark for one class of goods and services; and ¥8,600 for the same trademark for subsequent classes.
• Registration fee of ¥28,200
• Trademark registration renewal fee of ¥38,800 every ten years; it has to be renewed within six months prior to the date of trademark registration expiration.

Knowing a little more about the Hanko and the Inkan seals 

In business, the most widely deployed primary personal identifier is a signature. The signatures are crucial when it comes to sealing a deal or signing documents like contracts.

While many other countries are already using signatures, the banking industry in Japan relies significantly on Hanko stamps, commonly known as Inkans, for identification purposes.

In other words, a Hanko is a sort of a rubber stamp that is used to sign for a person in Japan. It often includes the name in the kanji, katakana, or even in the Latin alphabet on the surface of the stamping. There are such Hankos which are called personal and such which are called business-oriented.

Personal Hankos include:

• Mitome-in, often translated as “recognition seal,” is utilized in Japan for signing basic contracts and endorsing documents in routine procedures.
• Ginko-in, commonly known as the “bank stamp,” serves primarily for banking purposes such as managing bank accounts and facilitating loan and credit approvals. While not all banks necessitate a Ginko-in seal from foreigners, it’s advisable to confirm whether it’s required by your bank.
• Jitsu-in, referred to as the “official seal,” holds paramount significance among personal Hankos. Each Jitsu-in Hanko is unique and requires government registration. Since Jitsu-in is essential for establishing a company, obtaining one is mandatory.

Business Hankos include: 

• Kaku-in, comparable to an individual’s Mitome-in, serves as a company’s signature for less significant documents.
• Ginko-in, necessary for business transactions and managing the company’s bank accounts, features two circles.

To the outer ring is inscribed the name of the company, while the inner ring is used as the corporate seal for banking. Once you get Ginko-in, it will be necessary to deliver it to the bank and reregister it.

• Kaisha Jitsu-in, akin to the powerful and significant personal Hanko known as Jitsu-in, holds paramount importance in business. Registering your Kaisha Jitsu-in is mandatory at the same Legal Affairs Bureau where you registered your company.

Kaisha Jitsu-in, utilized in conjunction with Kaku-in, is distinguished by its two-circle design. The outer circle typically displays the company name, while the inner circle contains the name of the company representative.

Hanko seal prices fluctuate depending on factors like material, diameter, design, pattern, and registration. Costs can span from ¥100 to ¥10,000.

Step 4: Notarized The Articles of Incorporation

If you are setting up a gōdō gaisha or GK company in Japan you only require to notorize revenue stamps and this will be at a cost of 40,000 yen. In the legal framework of the United States, a GK can be compared with a limited liability company (LLC).

On the other hand, if you are going to register the kabushiki kaisha or KK company at Japan, you will be required to notarize all your Articles of Incorporation. A KK is similar to a share company, stock company, joint-stock company, or stock corporation in American context.

The Notary Office or Koshonin Yakuba is responsible for notarization of the Articles of Incorporation for KK companies in Japan involving a fee of 50,000 yen in addition to the 40,000 yen for the revenue stamp notarization.

Step 5: Initial Capital Deposit

If you are registering your company in Japan, you will not be able to open a bank account for your business until you have completed the registration procedure. You will be required to make an initial deposit from your own bank account in Japan.

The process is also easy to anybody who is seeking to establish a subsidiary company in Japan. It only requires depositing money in an Account with the Representative Director as the account holder.

Step 6: Get all The Documents Well-Prepared

There are still other documents that you will need to obtain before finally registering your company in Japan aside from the ones stated in the Articles of Incorporation. They include a letter of agreement from the director about to assume your company office and the proof of the company seal registration completion.

Step 7: Complete the Application for Business Registration

When you have all the papers in order, the application for business registration needs to be filed at Registry Office or Homukyoku. If you are registering a KK type of business registration will be a minimum of 150,000 yen. Regarding the registration fee in the case of a GK business structure, the minimum registration fee is 60,000 yen.

Step 8: Obtain Registry Certificate, Seal Certificate, Corporate Number

Once the company is registered, one gets the registry certificate, company’s seal certificate, and the corporate number. These documents will be required in order to sign employment and business contracts as well as in order to open your official corporate bank account in Japan.

How FastLane Group Can Help?

Unlock the potential of your business in Japan with FastLane Group! Our expert team simplifies the complex process of establishing your business, ensuring a smooth and stress-free experience. From visa acquisition to bank account setup, we handle every detail so you can focus on your business growth. Partner with us and take the first step towards success in the Japanese market today!