How to Start a Business in Japan

How do I start a business in Japan? 

Broadly, there are two ways to start a business in Japan. The first is the standard incorporation method, commonly used by most startups, while the second is an alternative approach endorsed by the Japanese government, known as the Japan Startup Program. This section focuses on the standard incorporation method, providing practical guidance to the company setup.

Standard Company Incorporation

On 16 October 2025, the Japanese government introduced additional regulations for the incorporation of companies by foreign nationals. These changes are fair and should not affect entrepreneurs who are genuinely committed to contributing to Japanese society and succeeding in business in Japan.

Note 1: About you (the founder)

The founder must either have:
- a postgraduate university degree relevant to the business or
- relevant skills and experience in the field of the business for more than three years 

Note 2: Company name

You may choose any business name you like, but it must clearly indicate the type of company structure. For example: [Company Name] Kabushiki-Gaisha

Common company structures in Japan are:

• Joint-Stock Company (Kabushiki-Gaisha)
• Limited Liability Company (Godo-Gaisha)

Each structure has different legal and management implications, so choosing the right type is crucial.

◆ Joint-Stock Company(Kabushiki-Gaisha)

This type of company raises funds by issuing shares to the investors. It is a popular choice for startups seeking a large investment.

One advantage of this corporate structure is the ability to raise funds quickly, but the ultimate decision-making power rests with the shareholders.

◆ Limited Liability Company (LLC)

Unlike a joint-stock company, a limited liability company does not issue shares. All investors actively participate in the management of the company as employees.

LLC offers greater control over management and decision-making. However, since all investors participate in management, differing opinions can arise, potentially slowing down the decision-making process.

Note 3: Employees

The company must employ at least one full-time employee. The employee must be a Japanese national or a permanent resident holder who is fluent in the Japanese language (at least JLPT N2 level).

Note 4: Japanese language proficiency

Either the founder or the employee (as note 3) must have a high level of Japanese, at least equivalent to JLPT N2. Proficiency in the Japanese language is absolutely necessary for running a business in Japan.　　

Step 2: Company seal

Once you have chosen your company name, the next important step is to create a set of company seals. These seals are essential not only for starting a business but also for ongoing business operations in Japan.

The use of seals, or hanko, is a distinctive feature of Japanese culture, deeply rooted in society for centuries. To date, seals are still widely used for binding legal documents, giving approvals, and serving as a form of identification. Their importance extends well beyond company incorporation, and you will find yourself using these stamps regularly throughout your business operations in Japan.

- Company seal must be registered with the Legal Affairs Bureau. This is the most important seal, as it is used to validate company decisions and agreements. A certificate is required for company registration and can be obtained from the Legal Affairs Bureau.

- Banking seal is used for opening and managing a corporate bank account.

- A square company stamp is commonly used on business documents such as invoices and purchase orders.

Step 3: Company registration

The next step is to officially register your business as a company. This process involves following steps:

i) Prepare the Articles of Incorporation - This legal document includes the company's core details (outlined in Step 1). For Joint-Stock Companies, it must be submitted to a notary public.

ii) Initial capital payment – Transfer the capital into your personal bank account in Japan. 

If the person running the company is a foreign national who requires a manager visa, the minimum amount of capital required rises to JPY 30 million.

iii) Register the company incorporation – File the incorporation documents with the Legal Affairs Bureau, together with your company seal certificate.

Purchase a revenue stamp from the Legal Affairs Bureau and submit it with the documents. It is a registration fee in the form of a tax.

Registration must be carried out by a lawyer or judicial scrivener. Although a solicitor can prepare the documents, the actual registration must be carried out by a lawyer or judicial scrivener. 

iv) Notify government agencies – Register with the relevant government agencies to confirm that your company has been established and is ready to begin operations.

Depending on your business type, you may also need permits or licenses. 

Step 4 Business Manager Visa

Typically, the founder would be involved from the start of setting up and running a business in Japan. The founder involved in the management of a company require a manager visa that permits them to engage in management activities.

Together with a business plan, and other relevant certificates, apply for the Business Manager Visa at the Immigration Bureau.