Company Formation in Japan

Roadmap

How long does it take to register a Company in Japan?

It would be not fair to set your expectations in a way to assume for the incorporation to be finished within a day. In some jurisdictions it is extraordinary fast (for example in Estonia) in some slower. It all boils down to one thing: 'When are the necessary (basic) documents ready?' The process is counted from the moment on we have all the needed documents. Please consult with our consultants to understand what documents you need to kick-start the process.

• 30-90 days depending on structure and determination of the information of the company sought to be registered

What are the steps to register a company in Japan?

The registration process of a company in Company Formation in Japan with LegalBison is very simple: Contact us for more details

Taxes

How high are the corporate income tax in Japan?

Corporate income tax is assessed on the company’s worldwide income except for foreign companies which are only taxed on their Japan-sourced income. The tax rate is dependent on company size and income.

• Paid-in capital of over 100 million Japanese yen (JPY) with offices or factories in at least three prefectures - 29.74%
• Paid-in capital of JPY 100 million or less, except for a company wholly owned by a company that has paid-in capital of JPY 500 million or more
• Less than JPY4 million per annum - 25.90%
• Over JPY 4 million to JPY 8 million per annum – 27.58%
• Over JPY 8 million per annum - 23.2%

Important Note: Corporate tax payers are also required to pay national corporate tax at a fixed rate of 10.3% of their corporate tax liabilities.

What Double-tax treaties has Japan?

Japan has concluded tax treaties with the following countries not only to avoid double taxation but to encourage investments as well: Australia, Austria, Bahamas, Bangladesh, Belgium, Bermuda, Brazil, British Virgin Islands, Brunei, Bulgaria, Canada, Cayman Islands, Chile, China, Croatia, Czechoslovakia, Denmark, Ecuador, Egypt, Estonia, Fiji, Finland, France, Germany, Guernsey, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Isle of Man, Israel, Italy, Jersey, Kazakhstan, Korea, Kuwait, Latvia, Liechtenstein, Lithuania, Luxembourg, Macao, Malaysia, Mexico, Netherlands, New, Zealand, Norway, Oman, Pakistan, Panama, Philippines, Portugal, Qatar, Russia, Romania, Samoa, Saudi Arabia, Singapore, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Taiwan, Thailand, Turkey, USSR, United Arab Emirates, United Kingdom, United States, Vietnam, and Zambia.

VAT number

Without VAT number

• Companies with JPY 10 million taxable sales and capital are not required to register for consumption tax and are referred to as “tax exempt enterprises”
• The moment one of the two is no longer true, then the company is already required to file and pay for tax returns

With VAT number

• VAT in Japan is referred to as Consumption Tax. The current rate is 10% where 7.8% is the national tax and 2.2% is the local tax. Other supplies are at a reduced rate of 8% such as food and drinks (alcoholic drinks and dine out consumptions excluded)
• Companies with more than JPY 10 million taxable sales or with more that JPY 10 million capital are required to file and pay their respective tax returns

Decide first

1. Do you already own a company in Japan or want to set up a new one?
2. Decide what structure do you intend to register
3. Note: There’s no concept of a ready-made company (shelf) in this jurisdiction

Documents to for provide company registration in Japan

• Passport copies (a scan) of all individuals above, also beneficiary owner if applicable
• A Power of Attorney (POA) from (all) partners/shareholders is needed (in case of a remote company registration)
• Certified company documents (in case at least one of the shareholders is going to be a foreign company)

Information needed to get company registration in Japan

• 3 options of your desired name for the company and a company contact email address
• Names, addresses and emails of all shareholders and board members
• Short description of your companies’ activity

Remote incorporation

• Yes, remote incorporation is possible. If acting through a representative, a Power of Attorney is needed which should be notarized where executed and apostilled if executed outside Japan

Accounting and auditing

All companies may choose one of the four accepted financial reporting frameworks recognized in Japan:

• IFRS Standards, Japanese GAAP, Japan’s Modified International Standards (JMIS - locally modified version of IFRS Standards), US GAAP
• If your company’s capital exceeds JPY 8 million, you are required to file corporate and local tax returns along with specified types of corporations
• Japan already implemented electronic filing system for tax returns starting in April of 2020
• Meanwhile, for companies with more than JPY 10 million capital are additionally required to appoint their external auditors as they are subject to audit

Residential requirements

What are the residential requirements in Japan?

• No direct resident requirements for most structures except for a branch office, which only requires a representative who is present in Japan and has a Japanese address

LegalBison offers help with all of the above requirements. We assist and are local on ground. Speak now for free with one of our consultants to get your business started.