Japan is one of the world's most advanced and stable markets, yet for foreign companies the incorporation process is often more nuanced than it first appears. Choosing the right legal structure directly affects your first-year costs, your ability to open a corporate bank account, the trust you build with Japanese clients, and — where relevant — your eligibility for residence status.
This guide compares the three core structures for companies expanding into Japan — the Kabushiki Kaisha (KK), the Godo Kaisha (GK), and the branch office — and walks through current costs, the step-by-step registration process, and the major visa changes that took effect in late 2025.
Disclaimer: This content is for general information only and is not legal or tax advice. The figures below (registration taxes, rates, exchange rates) change over time; please confirm final decisions with a qualified Japanese professional (司法書士 / 行政書士).
What Company Structures Exist in Japan?
Japan's Companies Act allows several forms, but four options are most relevant to foreign investors:
Kabushiki Kaisha (株式会社 / KK) — A joint-stock corporation. The most prestigious and widely used structure.
Godo Kaisha (合同会社 / GK) — A limited liability structure similar to a US LLC. More flexible and lower cost.
Branch Office (支店 / Branch) — Not a separate legal entity; an extension of the foreign parent company.
Representative Office (駐在員事務所) — May only conduct research and preparatory activity; cannot make sales and requires no registration.
For most companies the real decision is between the first three. A representative office is a temporary option for firms still in the market-exploration phase.
The Core Difference Between KK and GK
Both KK and GK are limited liability structures — investors are only liable up to the capital they contribute. There is also no tax difference between them; both are taxed as corporations. The differences lie in perception, cost, and governance.
Criteria | Kabushiki Kaisha (KK) | Godo Kaisha (GK) |
|---|---|---|
Type | Joint-stock corporation | Limited liability (LLC-like) |
Registration license tax (登録免許税) | 0.7% of capital, min ¥150,000 | 0.7% of capital, min ¥60,000 |
Notarization of articles | Required (~¥30,000–50,000) | Not required |
Setup time | About 4 weeks | About 2–3 weeks |
Governance | Shareholder meetings, director terms, etc. | Members manage directly; flexible |
Prestige / trust | High; preferred by banks, corporate clients, public tenders | Moderate; ideal for small, flexible ventures |
Share issuance / raising capital | Possible | Limited |
Practical recommendation: A KK suits companies that will sell to large Japanese institutions, bid on tenders, or seek investment. Firms wanting a single founder, low budget, and fast setup can start as a GK and convert to a KK as they scale.
The Cost of Setting Up a Company in Japan
Formation cost depends on your chosen structure and capital. The following line items appear in a typical incorporation (approximate values):
Registration license tax: Minimum ¥150,000 for a KK, ¥60,000 for a GK (0.7% of capital, whichever is higher).
Notarization of articles (KK only): ~¥30,000–50,000, depending on capital.
Stamp duty (paper articles): ¥40,000 — waived with electronic articles, which is why most incorporations use e-articles.
Company seal (inkan) kit: ~¥10,000–30,000.
Professional service fees: With legal/advisory support, typically ¥200,000–500,000 depending on complexity.
Capital amount. The legal minimum is ¥1, so a company can technically be formed with very little capital. In practice, however, Japanese banks scrutinize undercapitalized companies when opening corporate accounts. For operational credibility, advisors generally recommend at least ¥3–5 million in starting capital. If a founder needs Japanese residence status (the Business Manager visa), the capital threshold is much higher (see below).
Currency note: USD equivalents vary with the exchange rate. During 2025–2026 the rate hovered around 1 USD ≈ ¥145–155; please confirm the current rate separately.
The Step-by-Step Incorporation Process
Decide on the legal structure (KK, GK, or branch).
Prepare the company name and seal (inkan). The name must comply with the Companies Act.
Secure a registered address. A real physical address able to receive official correspondence is required; a virtual office address is accepted for most structures (a P.O. box is not).
List the business purposes (定款 objectives) in Japanese. This list is surprisingly important in Japan and can affect future licensing and banking.
Draft the articles of incorporation (定款).
Notarize the articles if forming a KK. A GK skips this step.
Deposit the capital.
File for registration at the Legal Affairs Bureau (法務局). This filing is typically handled by a 司法書士 (judicial scrivener).
Obtain the company registration certificate (履歴事項全部証明書).
Open a corporate bank account.
File tax notifications (National Tax Agency + local tax offices).
Complete social insurance enrollment.
Who Should You Work With?
Roles in Japan are clearly divided:
司法書士 (Judicial Scrivener): Handles company registration (登記).
行政書士 (Administrative Scrivener): Prepares articles and handles visa/residence applications and licenses. (Important note: visa filings are usually handled by scriveners, not attorneys.)
税理士 (Tax Accountant): Tax filings and accounting.
弁護士 (Lawyer): Contracts, disputes, and complex legal matters.
The 2025 Business Manager Visa Changes (Critical Update)
If a founder needs to live in Japan and personally manage the company, the Business Manager (経営・管理) visa comes into play. As of October 16, 2025, the requirements for this visa underwent the most significant tightening in over a decade.
The new rules:
The minimum capital requirement rose from ¥5 million to ¥30 million (a six-fold increase, roughly USD 200,000).
The criteria now work on an "and" basis, not "or": you need both ¥30 million in capital and at least one full-time qualifying employee.
A qualifying employee is narrowly defined: a Japanese national, permanent resident, spouse of a Japanese national/permanent resident, or long-term resident. Engineers/specialists (技術・人文知識・国際業務), 特定技能 workers, and part-timers do not count.
The applicant or qualifying employee must demonstrate Japanese proficiency (roughly JLPT N2 / CEFR B2).
The applicant must have three years of management experience or a master's degree or higher in a business-management or accounting-related field.
Existing visa holders have a three-year transitional period until October 16, 2028 to comply.
These changes aim to filter out companies formed "on paper" that do not conduct real business. Important distinction: if your parent company will operate in Japan through a local representative or employee, the founder may not need a Business Manager visa at all — in which case the ¥30 million threshold is not binding for you. Which scenario fits depends on your business model and should be planned correctly from the outset.
Practical Notes for Foreign Companies
Branch or KK/GK? A branch office is not a separate legal entity; liability sits with the parent, and tax applies only to Japan-source income. A separate local entity (KK/GK) ring-fences liability and projects a stronger position with Japanese clients and banks.
The bank account is the key bottleneck. Even after registration, opening a corporate account can take time for undercapitalized companies with weak local presence. Capital and address choices directly affect this step.
Design the business-purposes list carefully. Covering all likely activities — export, import, consulting, distribution — from the start avoids costly amendments later.
Frequently Asked Questions
Can a foreign company set up a business in Japan? Yes. Foreign companies can form a KK, GK, or branch office. Having a representative resident in Japan smooths the process, though requirements vary by structure.
Which is the lowest-cost structure? The GK is the most economical to form, as it requires no notarization and a lower registration tax. If prestige and corporate trust are priorities, the KK is preferred.
How long does incorporation take? A GK usually takes 2–3 weeks, a KK about 4 weeks, and a branch office 2–4 weeks. Most delays come from incomplete documents or translation errors.
Can I use a virtual office address? For most structures, yes — but the address must be a real physical location capable of receiving official correspondence.
Is a Business Manager visa mandatory? Only if the founder needs to live in Japan and personally manage the company. Structures run through a local employee or representative may not require it.
Enter Japan with Gordion
Gordion is a B2B firm focused on market-entry and trade advisory along the Turkey–Japan corridor. We guide companies through structure selection, coordination with local professionals (司法書士 / 行政書士), and market positioning.
To start in Japan with the right structure, get in touch with us.
