There are several steps one must take when registering a business in Japan that may seem extensive to a newcomer, but are fully standardised. Hive Life has outlined the process to start or expand a business in the country.

Registering your business in Japan may seem like a challenging task to those who are not accustomed to the language or bureaucratic process. Luckily, Japan has been making renewed efforts to bring foreign businesses to the country under the Council for Promotion of Foreign Investment which has launched the INVEST JAPAN Foreign Direct Investment Promotion programme. Under this initiative, the government is promoting Five Promises for Attracting Foreign Businesses to Japan, including the removal of language barriers at retailers and restaurants, and the strengthening of consultation services for foreign businesses. 

In addition, this foreign direct investment promotion has launched a new goal in 2021 to double the inward Foreign Direct Investment stocks to JP¥80 million by 2030. Now might be the perfect time to invest in your business in Japan, as the country is readily opening its doors, and aiming to create the optimal environment for foreign investors to thrive. 

If you are looking to register your startup in Japan, Hive Life has outlined the steps that need to be taken to successfully incorporate your company. 

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Obtaining A Visa

The first step to registering your business in Japan is to determine which kind of visa you need. If your business is a startup, you are in luck. Japan has recently launched an initiative to help bring foreign entrepreneurs to the country. It is not available in all cities, but Tokyo, Hiroshima and Aichi Prefectures, Sendai City, Fukuoka City, Imabari City, and Niigata City are all included. 

If this is the type of visa you are after, you must submit a business plan in Japanese to get a recommendation letter from your local government office. The visa lasts six months, and can be extended for the same period of time. It will allow you to obtain a residence card, open a Japanese bank account, and register your business. 

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Setting Up A Bank Account

The second step to registering your business in Japan is obtaining a Japanese bank account. There are several more foreigner-friendly banks to overcome the language barrier and bureaucratic processes, which streamline registration purposes to suit incoming foreign startups. These banks include Sumitomo Mitsui Banking Corporation, Shinsei Bank, Seven Bank, and Japan Post Bank

It is worthy to note that there are several requirements for opening a bank account, which apply to most banks in Japan. Namely, proof of residency rights, which you will receive with your visa, proof of residency, contact information, a Japanese residence card, and an initial deposit amount. 

Finding An Office Or Shared Space

Once a bank account has been secured, the next step to setting up your business in Japan is to find an office, or coworking space for smaller and growing businesses, such as at the Hive Jinnan in Tokyo, where you can generate revenue. There are long-term and short-term office rentals available, both with their varying pro points. 

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Short-term office rentals, which are becoming more readily available in Japan, offer flexibility regarding lease, a business address, low costs which is often key for startups, and access to existing furniture and tech infrastructure. Long-term office rentals may be more convenient if you plan to create an office space that reflects your brand image, as well as contributing to company culture.

Articles of Incorporation

Articles of Incorporation, or teikan in Japanese, are necessary to set up a business in Japan, but vary depending on business structure. In this case, a startup falls under the category of a foreign individual. 

For a foreign individual, you will need a seal certificate or Inkan Shomeisho of an investor or director. With your residence card that you have obtained, you can get this certificate at a local city hall. You will also need a company seal, registered at the registry office. 

Lastly, you will need the investor’s personal bank account and its passbook, known as a tsuuchou, as well as a bank statement as proof of the deposit of capital. Either an existing account, or new one will do. All Articles of Incorporation must be signed and sealed by each investor and director of the company. 

It will be necessary to have a Hanko seal, also known as Inkans, for all business endeavours, which is similar to a personal signature. This seal will contain your name in either kanji, katakana, or a Latin version. There are Hanko for both the business and the individual. 

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For a Limited Liability Company (LLC), or gōdō gaisha (GK), you must notarise Revenue Stamps, costing JP¥40 thousand. For a share company, or kabushiki gaisha (KK), all Articles of Incorporation must be notarised. This happens at the Notary Office, and costs JP¥50 thousand, in addition to the fees for the notarisation of the Revenue Stamps. 

Depositing Initial Capital

In Japan, you cannot open your company’s bank account before finishing the registration process. Up until this point, your personal bank account must be used to deposit the initial capital for your new business. 

Supplementary Documents

In addition to the Articles of Incorporation, you will need a letter of agreement from the director of the company office, as well as proof of the company’s seal registration completion. Once you have acquired all documents required to register your company, you must file the application at a Registry Office. 

After this, you will receive the registry certificate, company’s seal certificate, and corporate number, which will be needed to sign employment and business contracts and to open an official corporate bank account in Japan. 

Hopefully, this article has prepared you to register and incorporate your business in Japan. Now that you have the tools, learn more about work culture and business etiquette in the country, so you can run your company smoothly. 

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