Japan offers a lucrative opportunity to create and manage a local company of your own. We can work with you to identify a company structure that best aligns with your in-country strategy and long-term development plans. By partnering with us, we will help you manage your company’s end-to-end incorporation. This includes:
Handling payroll setup and registration.
Once incorporation is complete, we transition employees from their current employment status into that of your company.
Overseeing the same benefits your company has been providing to your foreign employees under the ownership of your new subsidiary.
Gathering local employment contracts and legally mandated materials for the establishment of your new entity.
Strategic guidance in matters concerning contract negotiations with employees.
Limited liability company
A limited liability company, or Godo-Kaisha, is the most common type of business entity that is established by foreigners. A subsidiary can be formed by setting up this type of entity. This type of entity can be established by a single shareholder who can be a foreigner. There must be a director appointed for the company who must be a resident of Japan.
The shareholders’ liability is limited to the amount of equity that they contribute to the limited liability company. The foreign company is not liable for the subsidiary’s debts or obligations. The setup of a company in Japan often takes some time because of the various requirements to establish this type of entity. Physical space must be found and the foreign investor must submit evidence of this to the local authorities.
This type of entity can be established with a minimum capital investment of USD $1. However, the share capital must be increased to JPY 3 million, approximately USD $39,000, within five years of incorporation. This type of business can conduct most types of business activities in Japan and provides greater flexibility for businesses. Also, this type of entity is required to prepare and submit financial statements to the Japanese tax authority one year after they are formed. However, if their issued capital is below USD $4.5 million, they may qualify for an audit exception.
Joint-stock corporation
Another option is to establish a joint-stock corporation. This entity is known as a Kabushiki-Kaisha in Japan. This option can be used to establish a subsidiary.
To establish a joint-stock corporation, a board of directors must be appointed usually with a minimum of three directors, one of whom must be a representative director who holds the corporate seal and is authorized to bind the company in legal transactions. One of the directors must be a resident of Japan.
This type of entity can be established with a minimum capital investment of USD $1. The incorporation process for joint-stock corporations is similar to that of a limited liability company. This type of entity is typically established when the owners of the company plan to finance their business by raising capital in the Tokyo Stock Exchange.
These entities are not subject to an audit like other types of businesses in Japan if they meet certain criteria, including:
They are not listed on any stock exchange
They have less than three directors
Their issued capital is less than USD $4.5 million
Their memorandum and articles of association includes restrictions on the shareholders’ power to freely transfer shares
When the companies meet these requirements, they are called closed Joint stock corporations or Kabushiki Joto Seigen Kaisha in Japan.
Contact Us
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Email: tannetinfo@gmail.com
Tel: +603-21418909
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