Set up company in Japan
As globalization advances, more foreign companies are looking to establish operations in Japan to support their business or investment goals. Japan remains a highly attractive destination, and its government is generally supportive of foreign business entry.
However, forming a foreign-owned company in Japan involves navigating legal procedures, corporate governance standards, cultural differences, and market competition. Despite these challenges, a well-established foreign enterprise in Japan can unlock significant business potential and growth opportunities.
I. Japanese company type
- Kabushiki Kaisha: A joint-stock company raises capital by issuing shares to investors, who become shareholders. It features a separation between ownership and management—shareholders provide funds under limited liability, while appointed directors run the business and share profits. In many Japanese SMEs, shareholders and directors are often the same person.
While forming a joint-stock company is more expensive than setting up a partnership and requires notarized articles of incorporation, it offers stronger external credibility, making it easier to secure financing and build trust with clients.
Godo Kaisha: In a contract company, investors are called “members” and act as both owners and operators. Unlike a joint-stock company, there’s no need to appoint directors through shareholder meetings—management is handled directly by the members. All members have equal voting rights, and major decisions require unanimous approval at the Members’ Meeting.
II. Documents should be prepared for company establishment
- Confirm company type
- Club name (company name/trade name)
- Determine the amount of capital
- Management items
- Number of shareholders, directors, and auditors at the time of establishment (directors and shareholders)
- Articles of Association
- Investor, director information, tenure, etc.
- Company location
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