[Old] [Podcast-style] How can a foreigner start a business in Japan?
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How Can Foreigners Start a Business in Japan? Explanation of Business Structures, Visa Types, and Incorporation Procedures
This page provides an easy-to-understand podcast-style explanation for foreigners who wish to stay or live in Japan long-term, covering the basic information needed to start a business in Japan.
Introduction: A Guide for Foreigners Starting a Business in Japan
Today, let’s dive into the key points for foreigners starting a business in Japan—focusing especially on business structures, visa types, and the incorporation process.
Exactly. Doing business in Japan as a foreigner involves unique procedures and points to be aware of. Let’s clearly identify those critical elements.
Business Structure in Japan: Representative Office, Branch Office, or Subsidiary
First, regarding business structures in Japan, the main options are representative offices, branch offices, and subsidiaries.
Yes, that's right.
A representative office is typically for preparatory activities such as market research. It cannot conduct sales and does not require registration.
For actual commercial operations, either a branch office or a subsidiary is necessary. Both require legal registration.
A branch office is treated as part of the overseas headquarters, whereas a subsidiary is an independent entity. The liability of investors is limited to their capital contribution.
Understood. Subsidiaries can take forms like a joint-stock company (Kabushiki Kaisha) or a limited liability company (Godo Kaisha).
A limited liability company is easier to set up and allows more flexibility in internal rules. On the other hand, a joint-stock company enjoys higher credibility and recognition, which may be advantageous when raising external funds in the future.
Starting a Business and Residency Status: Requirements for the Business Manager Visa
Foreigners who wish to become business owners in Japan must obtain a proper residency status.
Exactly. Obtaining a Business Manager Visa is essential. You must have an official office in Japan and demonstrate a sufficient business scale. This means either a capital investment of at least 5 million yen or employing at least two full-time residents in Japan.
So it’s either one of the two, right?
Yes. It's important to note that while a company can technically be established with just 1 yen, obtaining a visa usually requires a practical investment of 5 million yen or more.
Is it possible to obtain a visa before establishing the company?
Generally, that’s difficult. You need to first establish the company and secure an office before applying for a Certificate of Eligibility (COE). Those already residing in Japan must apply for a change of residency status.
When Capital Is Insufficient: Utilizing the Startup Visa
If meeting the capital or staffing requirements is difficult, are there any alternative options?
Yes. Some local governments offer a Startup Visa scheme, which may provide a special “Designated Activities” visa for up to one year for business preparation.
I see. Having a full year for preparation is a big help.
Yes, it’s a valuable option to consider.
Understood. The visa requirements are becoming clearer.
The Process of Establishing a Company in Japan
What is the actual process of establishing a company in Japan?
First, you need to create the Articles of Incorporation. For joint-stock companies, notarization by a public notary is required. Then you deposit the capital and submit the registration documents to the Legal Affairs Bureau.
For those residing abroad, opening a Japanese bank account to deposit capital can be difficult.
Yes. Due to stricter screening for anti-money laundering, it has become more challenging. There are some exceptions, but in practice, having at least one resident representative makes the process much smoother.
Post-Incorporation Procedures and Support Services
After establishing the company, filings with the tax office and social insurance are also necessary, right?
Correct. Especially if you hire employees, labor insurance and social insurance procedures are mandatory.
A well-prepared business plan is important too, as it affects visa applications and financing.
Yes. If you need help, organizations like JETRO, chambers of commerce, and SME support agencies are available. Specialists such as administrative scriveners or SME consultants can also assist, and many local governments offer consultation windows, like the Tokyo One-Stop Business Establishment Center.
Business Culture in Japan: What You Need to Know for Success
So, today we’ve covered company structures, visa requirements—especially the Business Manager Visa—and key points in the establishment process.
It’s important to prepare for incorporation with the Business Manager Visa in mind, and to understand the practical capital investment hurdles.
Exactly. While the procedures may seem numerous, if you take each step properly and actively use available support, you’ll be on the right path.
That makes sense. We’ve discussed the legal and planning aspects, but there’s another important perspective to consider when doing business in Japan.
What do you mean?
Beyond official documents, understanding Japanese business culture—such as unspoken rules, prior coordination, and building relationships—is also essential.
Absolutely. Navigating the “unwritten atmosphere” not captured in documents can be the key to long-term business success in Japan.
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