For any company looking to expand into the Japanese landscape, first and foremost you need a business address. The necessary paperwork to set up a business will require you to list your local corporate address. The truth is, it’s complicated to obtain a lease as a foreign business. Luckily, Japan has many virtual offices that will do the trick. Once you have an address, you can select your business type and file official paperwork to begin your journey to business success in the Japanese market. But what kind of business is right for you? Here is a quick guide to company setup in Japan.
Types of Businesses
There are four main types of business in Japan: Kabushiki-Kaisha, Limited Liability Company (Godo-Kaisha, different from an LLC in the United States), Limited Partnership Company (Goshi-Kaisha), and General Partnership Company (Gomei-Kaisha). Each has certain considerations, and the right fit depends on your individual business needs.
Kabushiki-Kaisha (KK)
The most common business type is a KK. This business type requires owners to have a high amount of social credibility (an increasingly valuable currency in Japan), capital of at least JPY 1, at least one investor, and you must have your articles of incorporation notarized. (What are the articles of certification? These are a detailed outline of your business’ corporate structure with specific titles and duties of each employee). A KK is the only type of Japanese business which requires the certification process for your articles of incorporation. You are also required to submit a public notice of your finances for each fiscal year.
Limited Liability Company, Godo-Kaisha
This option is often chosen because it is relatively easy and inexpensive to set up. You are required to have at least JPY 1, and one or more investors. With a Godo-Kaisha and a KK, there is a limited amount of money that investors can contribute. However, a Godo-Kaisha does not require the certification of the articles of incorporation, nor do you need to publicize your financial statements.
Limited Partnership Company, Goshi-Kaisha
The next two types of businesses are rarely chosen solely for the reason that investors have unlimited liability for business ventures. This business type does not require any particular amount of capital, but it does require two or more investors, as opposed to just one investor needed by a Godo-Kaisha or a KK. The social reputation necessary to establish such a business is not nearly as important as with a KK, and you need neither certification of your articles of incorporation nor public notice of financial statement.
General Partnership Company, Gomei-Kaisha
Like the Gomei-Kaisha, this business option stipulates that investors have unlimited liability for business ventures, but there is also a limited liability in particular cases, which is the main difference between the two types of business. Again similarly, the Gomei-Kaisha requires two or more investors, does not require certified articles of incorporation, nor public notice of financial statement, and the social credibility is not as imperative.
Setting up your business is just the first step to establishing your organization in Japan. Work with an expert in transitioning companies to the Japanese market like SMEJapan. Take the first step toward positioning your business as a global player, today!
