Foreigners can establish a corporation in Japan if they meet certain conditions.
However, the requirements for visas, documents, and conditions are more stringent compared to Japanese nationals establishing a corporation.
This article summarizes the necessary procedures and important considerations for foreigners when establishing a corporation in Japan.
If you are a foreigner considering starting a business in Japan, please refer to this guide.

Types of Residence Status for Foreigners to Establish a Corporation in Japan

Foreigners who wish to establish a corporation and operate as business owners in Japan must obtain specific residence status (visa).
Be aware that a student visa or short-term stay visa does not allow you to earn income as a business owner.
Residence statuses that permit business management can be broadly categorized into two types: “Residence Status” and “Activity-Based Status.”

Residence Status

Foreigners with residence status have no restrictions on their activities in Japan. They can work in Japan just like Japanese nationals.
Types of residence status include:

・Spouse of a Japanese National, etc.: Spouses of Japanese nationals, special adoptees, or children born as Japanese nationals

・Long-Term Resident: Individuals granted residency by the Minister of Justice for special reasons

・Permanent Resident: Individuals granted permanent residence by the Minister of Justice

・Spouse of a Permanent Resident: Spouses of permanent residents
Reference: Immigration Services Agency of Japan “List of Residence Status”

Business Management Visa

The Business Management Visa is a residence status specifically required to engage in business activities in Japan.
With this visa, foreigners can establish a corporation and earn income without needing a residence status.
The main requirements for obtaining a Business Management Visa are as follows:

[At least two full-time employees or a capital of 5 million yen]
Hiring two full-time employees at the time of incorporation is often too burdensome, so in most cases, a capital of 5 million yen is selected.
The origin of the capital will be scrutinized, and artificially arranged funds will not be accepted.
If the funds are remitted from overseas, proof of proper fund transfer will be required.

[Securing a Physical Office]
To obtain a Business Management Visa, a physical office is necessary.
For rental properties, the office must be registered under the corporation’s name and for business use.
Shared office spaces with only communal areas or virtual offices are not permitted.
The office must be equipped with essential business tools such as computers, telephones, and copy machines.

[The business must demonstrate stability and continuity, and the applicant must have managerial capabilities]
A business plan must be submitted to clarify the stability and continuity of the business and the applicant’s managerial capabilities.
A business plan is a crucial document when establishing a corporation.
It should clearly outline the business’s financial aspects and be well-structured to be persuasive.

Procedures for Foreigners to Establish a Corporation in Japan

Foreigners who wish to establish a corporation in Japan should follow the steps below:

1.Decide on the basic details
Determine essential information such as the company name, capital, founders, and business objectives.

2.Create a company seal
A company seal is required for registration. Generally, three types of seals are prepared:

・Representative director’s seal

・Bank seal

・Square seal for contracts

2.Prepare and notarize the Articles of Incorporation
Draft the Articles of Incorporation, which define the company’s rules and regulations, and get them notarized at a notary office.

3.Deposit the capital into a bank account
After the Articles of Incorporation are notarized, deposit the capital into the personal bank account of a founder.

4.Register the corporation at the Legal Affairs Bureau
Submit the registration at the Legal Affairs Bureau. Once this step is completed, the corporation is legally established.

5.Submit necessary notifications
After completing the registration, submit required documents to the tax office, labor standards office, pension office, and prefectural tax office.

6.Apply for a Business Management Visa (if not yet obtained)
Submit an application for a Business Management Visa.

Even if you do not have a Business Management Visa or residence status, you can proceed with preparations for incorporation up to Step 7.
However, to receive remuneration from the business after establishment, you must obtain either a residence status or a Business Management Visa.

Documents Required for Foreigners to Establish a Corporation in Japan

Below is a list of documents required for foreigners to establish a corporation in Japan:

Required Documents Differ Between a Joint-Stock Company and a Limited Liability Company

The required documents vary depending on whether the company is a Joint-Stock Company (Kabushiki Kaisha, KK) or a Limited Liability Company (Godo Kaisha, GK).

In a Limited Liability Company (GK), investors also act as managers and hold decision-making authority.
For this reason, when establishing a Limited Liability Company, all investors must prepare:

• A Certificate of Capital Deposit
• A Seal Certificate
• A Consent to Appointment

Key Considerations When Foreigners Establish a Corporation in Japan

Foreigners should be aware of the following considerations when establishing a corporation in Japan.

Capital Deposit Accounts Must Be with Banks Regulated by Japanese Banking Law

The bank account used to deposit capital during incorporation must be one of the following:

・A personal account at a Japanese bank

・An account at a Japanese bank’s overseas branch

・An account at a domestic branch of a foreign bank

Since non-residents without a residence card cannot open a bank account in Japan, those without an appropriate account at the time of incorporation may need to seek assistance from a Japanese partner.

Notification is Required if the Founder is Overseas

A corporation can be established in Japan even if all founders reside outside the country.
However, in such cases, a notification must be submitted to Japan’s Minister of Finance via the Bank of Japan in accordance with the Foreign Exchange and Foreign Trade Act.

Since this procedure is complex and can complicate scheduling, it is advisable to consult a specialist before proceeding.

Conclusion

Foreigners must meet specific conditions to establish a corporation in Japan.
However, by understanding the necessary conditions and procedures, you can smoothly start a business in Japan.
If you find the process difficult or do not have enough time to handle it yourself, consider consulting a judicial scrivener or an administrative scrivener for assistance.