Japan Incorporation

1791-004-1998D4C6.jpg1. Introduction to Japan

    Japan  is a sovereign island country in East Asia. Located in the Pacific Ocean, it lies off the eastern coast of the Asian mainland and stretches from the Sea of Okhotsk in the north to the East China Sea and China in the southwest. 

   Coordinates: 35°N 136°EThe kanji that make up Japan's name mean "sun origin", and it is often called the "Land of the Rising Sun". 

  Japan is a stratovolcanic archipelago consisting of about 6,852 islands. The four largest are Honshu, Hokkaido, Kyushu, and Shikoku, which make up about ninety-seven percent of Japan's land area and often are referred to as home islands. 

   The country is divided into 47 prefectures in eight regions, with Hokkaido being the northernmost prefecture and Okinawa being the southernmost one. The population of 127 million is the world's tenth largest. Japanese people make up 98.5% of Japan's total population. About 9.1 million people live in Tokyo, the capital of Japan.

2. Overview of Business Entities in Japan

The main Japan business entity options used by foreign companies are as follows:

a. Japan Representative Office / Liaison Office.

b. Japan Branch of a Foreign Company.

c. Japan Incorporated Entity / Subsidiary.

The two incorporated entity / subsidiary options most commonly utilized by foreign investors are:

a. Kabushiki Kaisha (“KK”),

b. Godo Kaisha (“GK”).

3. Documents required for Japan Incorporation

a. Photocopy of passport or NRIC of directors/shareholders/the ultimate beneficiary

b. Proof of residential address of directors/shareholders/the ultimate beneficiaries

c. Registration Certificate and Constitution of Company

d. Statutory Book of Directors and Shareholders


4. Basic requirements for Japan incorporation 

Each available Japan business entity has its own particular method of establishment. Common issues that need consideration include the following:

a. Shareholder / Head Office

    In the case of a KK or a GK, the shareholder can be either an incorporated entity or an individual.

    In the case of a Japan branch of a foreign company or a Japan Representative Office / Liaison Office, a foreign company must be identified to act as the Head Office.

b. Japan Resident Director / Representative

c. All Japan entities require a Japan resident representative who is a natural person (i.e., not a company) and is resident in Japan (though not necessarily a Japanese citizen).

d. The technical name given to the Japan resident position varies depending on the entity involved:

e. The individual undertaking the role of Japan resident representative be subject to adverse individual and corporate tax consequences.

    In the case of a Kabushiki Kaisha (“KK”): Representative Director.

    In the case of a Godo Kaisha (“GK”): Executive Manager.

    In the case of a Japan Branch of a Foreign Company: Branch Manager.

    In the case of a Japan Representative Office / Liaison Office: Japan Representative.


5. Additional required information

a. Registered Address (All Japan entities require a registered address in Japan.) 

    The three issues that need to be considered with respect to an address in Japan are:

    1). Legal registration

    2). Address to receive mail, phone calls, etc.

    3). Visa.

b. Paid in Capital

Paid in capital is mainly relevant to the establishment of Kabushiki Kaisha (“KK”) and Godo Kaisha (“GK”). It represents the amount of cash the owners contribute to a company in exchange for shares in the company.

c. Commercial image

The amount of paid in capital is part of the public record. Customers may be reluctant to do business with a Japan entity that is perceived to have low paid in capital. In addition, low paid in capital may cause difficulties when entering into an office lease.

6. Annual Return of Japan Company

Every exempted  company is  required  to  file  an  annual  return  and  annual  Company  Registry  fees  with  the Registrar in January of each  year. This will be dealt  with by the  registered office provider. The annual return contains a declaration setting out:


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