A Guide to Starting a Business in Japan

Japan is a great place to start a business for foreigners because of the size of the economy, business stability, the void created by the aging population, and governmental support and reforms to encourage new businesses.

In this guide, we will discuss all the nitty-gritty of establishing your company to do business in Japan as a foreigner. However, before we discuss all the details of setting up a company in Japan, let’s start with the Golden Circle concept of Simon Sinek, which very logically advises thinking about the “Why” before the “How” and “What” to make a decision. 

Yes, why Japan?

Why is Japan a Good Destination for Business?

This question is not relevant to major multinational companies. This is because no major brand can afford to be out of the 3rd largest economy in the world. Moreover, you will not find any major multinational company not already present in Japan. 

This question is for the existing smaller foreign companies who wish to expand in the Japanese market or for foreigners who wish to start a new business in Japan.

To answer this question, let’s ask ourselves another question: How do we determine if a country is good for business? The following factors are the ones we need to analyze before setting up a business in any country or geography:

  • Size of the economy and opportunities
  • The need for our product or services
  • Infrastructure
  • Sustainability
  • Ethics and Safety
  • Ease of doing business and reforms

Size of Economy and Business Opportunities

We already talked about Japan being the 3rd largest economy, which translates into more business opportunities.

However, there is another major factor: Japan’s aging and declining population have pros and cons for the growth of the economy and opportunities.

Most people look at the disadvantages of it because, in the older world, population growth had a positive correlation with economic growth. But as it happens, correlations change with the changing times and situations.

In order to sustain the economy, Japan has to invest more in increasing productivity through technological innovations. And more investments in new areas are creating more opportunities, and this momentum will grow with time.

On the other hand, a declining local population will create more opportunities for foreigners who wish to start their business in Japan.

The Need for Your Product or Services

Being a major economy, Japan offers opportunities across the domains. However, there are ample and increasing opportunities in the technological area, healthcare & life sciences, and various service sectors. 

Good Infrastructure

Good infrastructure is, both directly and indirectly, essential for efficient business. Japan’s infrastructure ranks among the world’s best. While we all know the importance of good infrastructure for the smooth running of businesses, reduced stress levels become an indirect positive contributing factor for businesses. 

Sustainability of Business

On the negative side, the sales cycle in Japan is generally quite long, especially in acquiring new customers. However, once you acquire a client and keep your focus on customer satisfaction, you create a lifelong business relationship. The proof is that over 30,000 businesses in Japan are at least a century old. 

Japanese Business Ethics and Safety

A safe society also results in high business ethics. Japan, one of the safest countries in the world, also enjoys very high business ethics. 

As a simple example, in many parts of the world, businesses need to worry about receiving payments on time, cashflows, and all related issues.

Not in Japan. If your product or services are accepted, your payment will be made without a single day’s delay. If the payment day falls on a weekend or holiday, you will receive the payment on the previous working day.

Ease of Doing Business and Reforms in Japan

As per the last annual ratings of the 2019 World Bank, Japan ranked at 30th position out of 190 countries for ease of doing business. Forbes has rated Japan the 19th best country to do business out of 161 countries.

Since 2012, apart from the focus on bringing different economic reforms, including Abenomics and the current Prime Minister Kishida’s Council of New Capitalism, the Japanese government has created programs to support the startup ecosystem throughout the country. 

Programs such as the Startup Up Visa have created opportunities for foreign entrepreneurs to come to Japan with support and resources before officially transitioning into the Business Manager Visa and formally making investments to start a business. 

Apart from the startup visa, which 14 city governments support, Japan also launched a 4-month validity Business Manager in 2020. This visa aims to enable foreigners to come to Japan for initial business launch preparations before setting up a company by making investments and other financial commitments.

However, starting a business in Japan involves much more than obtaining the proper visa. There are several ways for you to secure funding and launch your business venture without taking the more traditional paths laid out by the Japanese government.

Type of Company and Registration of the Business in Japan

Company registration in Japan.

The process of registering a business is quite straightforward in Japan. Moreover, you will not find red tapes you may encounter in other countries.

In Japan, you can establish a company with the following types:

  • Branch office of a foreign company
  • A subsidiary company of a foreign company or a new Japanese company
    • A Kabushiki Kaisha (株式会社) or a K.K. Company
    • A Godo Kaisha (合同会社) or a G.K. Company
    • Gō-mei Gaisha (合名会社)
    • Gōshi Gaisha (合資会社)

Please note that Kaisha or Gaisha means company. Both these words are the same and interchangeable. Japanese people may pronounce these words differently in different contexts.

The above types of companies are for running a full-fledged business where you do all business transactions.

However, you can open a representative office if you wish to set up an office only for market analysis, marketing, or purchasing goods from Japan. A representative office cannot carry out any sales activities in Japan

Let’s discuss all the above types of companies to see what they are and their pros and cons:

Branch Office

As the name suggests, the Japanese branch office of your company headquartered in a foreign country is just a branch or extension of your company in Japan with the same name as the company headquarters. 

The Japanese branch office does not have a Japanese corporate status, no local paid-in capital in Japan, no local equity, and no board of directors in Japan.

However, for all practical purposes, it is run like a domestic business entity that must file the annual financial statement, pay income and consumption tax, and file all annual tax returns. However, the branch has to pay taxes only on its income but must declare the parent company’s income and assets.

The representative director, who may or may not be an employee of the branch office, has unlimited power but limited liability. The head office is exposed to all liabilities and any legal action. 

Pros & Cons of Setting Up a Branch Office

The pros of setting up your business in Japan as a branch office are as follows:

  • Easy to set up
  • No paid-up capital requirement, and hence, it is less expensive to establish
  • No local board of directors

However, the cons of a branch office in Japan are as follows:

  • Less credible for clients and hiring local employees, especially if the parent company does not have a significant brand value
  • The head office is exposed to all liabilities

Subsidiary Companies or New Japanese Company

In a subsidiary company, the liability of the foreign parent organization is limited to equity participation in the Japanese subsidiary. The following are types of subsidiary companies in Japan.

Liability-wise, there are two types of subsidiaries in Japan. These are as follows:

  • Limited liability companies: Kabushiki Kaisha (K.K.) and Gōdō Kaisha (G.K.)
  • Unlimited liability companies: Gōmei Gaisha and Gōshi Gaisha

Let’s have a look at all these types.

Kabushiki Kaisha or K.K and How to Register it

Kabushiki Kaisha of a K.K. company is the most common and trusted business entity in Japan. ネクサス株式会社

A Kabushiki Kaisha or K.K. is a regular stock or joint-stock, limited liability. 

A Kabushiki Kaisha may or may not be publicly traded; hence, a normal partnership company or even a solo founder company can also be registered as a K.K. company.

It takes one to three months to establish a K.K. company. However, if the operations are not very large and the paperwork is in order, typically, you can establish a K.K. operation in one month.

Please note that this time includes the preparation. Once you complete all formalities and paperwork, the actual time for getting the registration is one to three weeks.

The typical cost to establish a Kabushiki Kaisha (K.K.) is as follows:

  • Fee for registration: Minimum JPY 150,000
  • Notary fee: Typically, JPY 50,000 to 100,000
  • Fee for the consultant(s) to help with the registration: As low as JPY 30,000 to as high as JPY 700,000

Please note that some of the costs depend on the size and complexity of the company. You can save a lot of money on the fee for the consultant you hire to help you in the registration process through due diligence and research. There are smaller consulting companies that can offer you very good deals.

Following is a step-by-step guide to registering your business as a K.K. company in Japan:

1. Preparation to Register Company

The basic preparation before moving ahead to registering your company includes the following activities:

  • Deciding the name of the company. 
  • Making a business plan
  • Renting the office space for the registered office address
  • Deciding the financial year of the company
  • Ordering the handmade company stamp (Hanko)
  • Notarized affidavit and signature certificate from the home country, in case the founding corporation is a foreign entity or if a foreigner will be the representative director.
Name of the company

If the “trade name” is the same as that of another company already registered, and if the head office location is also the same, it cannot be registered.

The important point to note is that you can register a company with the same name as any existing company if the registered office address of your Japanese head office is different.

Please check the following screenshot as an example, which shows companies with the same name:

Example of multiple companies with the same name in Japan.

The above screenshot shows that there are 700 companies in Japan with the name 株式会社アシスト, followed by 616 with the name 株式会社ライズ, and so on.

(Note: The above information is public, and you can check if a company exists with the same trade name as yours here.

The logic behind allowing you to set up a company with the same name as an existing Japanese company is that you may be registering a subsidiary of your foreign company, which may have the same name as an existing Japanese company.

Making a Business Plan

Business plan creation is crucial for registering your company in Japan. 

It’s advisable to create a detailed business plan including the following:

  • Representative’s Profile 
  • Business Profile, and Content
  • Business Model including financial plan including the visibility of profit & loss for at least one year
  • Organization structure

You can find a good article about creating a business plan for your company here.

Renting office 

Please note that you must rent or lease the office before company registration because mentioning the office address in your application is mandatory.

Moreover, unlike many countries, you cannot register a company in Japan with a virtual office address.

Deciding the Financial Year for Your Business

Japan does not pose any restrictions for deciding the financial year of companies. 

The most common financial year used in Japan is April 1st to March 31st, but you can use any period of 12 months as your company’s financial year.

Ordering the company stamp (Hanko)

Unlike most other countries, Japan uses stamps called “Hanko” or “Inkan” in Japanese instead of a signature for all official purposes, including operating individual bank accounts.

Consider the Hanko as your signature. If the Hanko or stamp is to be used as a signature, ideally, it should be handmade. A handmade Hanko can take as long as one month to be made. 

As you will have to stamp your company registration application with the official Hanko, it is advised that you order the making of Hanko at the preparation stage. You can find Hanko-making shops everywhere in Japan.

2. Article of Incorporation

After the initial preparation, the next step is to prepare the Article of Incorporation (AOI) or “Teikan” (定款) in Japanese. Please note that the Article of Incorporation needs some good thoughts and planning for the present as well as the future roadmap of the business. 

As the AOI will include business activities, it is important to include activities that you may not start immediately but are planning to start soon. It is not that you cannot make changes later, but with every small change, you need to register a new Article of Incorporation, which will cost you both time and money.

This Article of Incorporation must be notarized by the notary public’s (Gyosei Shoshi) office in the Japanese headquarters’ geographic region. You can find the location of notary publics in Japan here in Japanese. You can also find more information about this on the Japanese Ministry of Home Affairs (MOFA) website.

What Does the Article of Incorporation Contain?

The article of incorporation includes the following important information about your business:

  • Full company name suffixed with 株式会社 for Kabushiki Kaisha
  • Complete address of your registered office
  • List of business activities you plan to do
  • Total number of authorized shares
  • Paid up capital
  • Whether you will issue share certificates or not
  • Restrictions and approvals required for the transfer of share certificates
  • Schedule and details for annual general meetings of the stockholders
  • Details of Representative director and any other directors
  • Process of deciding about the remuneration and retirement bonus of directors
  • The financial year of the company
  • Details about any contribution investing in kind and any shares assigned to such an investor

You can download the template with the instructions to create the Article of Incorporation here.

As mentioned above, once your Article of Incorporation is ready, you must get it notarized.

3. Transfer of Capital to Own Bank Account

After the AOI, the next step is for the incorporator or the partners (directors) to transfer funds to their Japanese bank account. 

Please note that you do not have your company’s bank account at this stage, but this fund transfer to your personal bank account is to prove that you have the capital ready.

If you do not have a bank account in Japan, you can use the services of a third party to transfer the funds. 

4. Application for Company Registration

Now, you are ready to make the application for the company formation in Japan. You or your consultant helping you will submit the company registration application to the concerned Regional Legal Affairs Bureau. 

To submit your application to register a company in Japan, you will need the following documents:

The filled-up application form to register a company.

This application form is called Touki Shinseisho (登記申請書)in Japanese. You can download the application form here. You can also refer to the website of the Legal Affairs Bureau of Japan for the same.

Notarized Article of Incorporation (Teikan)

Please refer to the explanation about the Article of Incorporation above.

The Acceptance Letter for the Appointment from the Representative Director.

This acceptance letter is called Shuninn Shoudakusho (就任承諾書) in Japanese and shows that the representative director has accepted his or her appointment for the position.

Please note that you must submit another acceptance letter (Shuninn Shoudakusho) from the auditor in case you have appointed one for your company.

Founders’ Decision Letter

The founders’ decision letter is called Hokkinin Ketteisho (発起人決定書) in Japanese.

This letter is required in the following cases:

  • If the Article of Incorporation does not include the complete address of the Head Office in Japan.
  • If you have appointed an auditor for a company, an essential requirement if you have a board of directors.
  • Please note that in the case of a solo founder, this letter has the founder’s seal and signature, but in the case of multiple founders, this letter needs to be signed and stamped with the registered seal (Hanko) of all founders.

Please check the template of the English translation of the founder’s written decision in the case of a solo founder here. For multiple founders, you can see and download the template here.

Proof of Company Registration Tax Payment

The company registration payment proof is called Tourokumenkyozei Noufuyoudaishi (登録免許税納付台紙) in Japanese, which literally translates into “Registration License Tax Payment Slip”.

This slip has to be affixed with a revenue stamp worth the company registration fee. As mentioned earlier, the amount is JPY 150,000 for a K.K. company.

Seal (Hanko) Registration Certificate of Director

The registration certificate for the director’s seal is called Torishimariyaku no Inkanshoumeisho (取締役全員の印鑑証明書) in Japanese. This certificate certifies that the Hanko or Inkan (seal) belongs to you.

In case there are multiple directors, but you do not have a board of directors, you need to attach the registration certificate of the seals of each director. However, only the Representative Director’s stamp registration certificate is needed if you have a board of directors. 

Notification Form for the Corporate Stamp

The corporate stamp is called Inkan Todokedesho (印鑑届出書) in Japanese. This seal notification form for the corporate seal is required to register the corporate stamp you made during the preparation phase of setting up the business in Japan.

Proof of Capital Deposited in the Bank

Finally, you need to submit proof of the capital you had deposited in either your bank or the entrusted party’s bank account for this service.  

Now, you can submit the company registration application with all the above-mentioned documents to the Legal Affairs Bureau in your jurisdiction. If all the documents are in order, you will get the registration in 7 to 10 days. The bureau will notify you for making any corrections if they find any mistakes.

Please note that your registration application date is the company’s registration date and not the date on which you receive the approval.

5. Open the Bank Account

Once the Legal Affairs Bureau registers your company, you can open your company’s bank account.

Please note that it’s the bank’s discretion to accept your request for the bank account opening, and at times, a bank can decline the request. Don’t lose heart, and be ready to approach another bank in case of a refusal from one bank.

Note about Corporate Credit Cards

Please note that banks generally decline requests for corporate credit cards in the case of a new company that is not a subsidiary of a large foreign company. Banks like to see that the company has existed for a reasonable amount of time to ensure your business is stable.

6. Notification to the Local Tax Office

Parallel to opening the company bank account, upon company registration, it is necessary to notify the local tax office about the company’s formation.

The notification to the local tax office will need the following documents:

  • Houjin Setsuritsu Todokedesho (法人設立届出書), meaning Incorporation Notification
  • Gensenshotokuzei No Nouki No Tokurei No Shyouninn Ni Kansuru Shinseisho (源泉所得税の納期の特例の承認に関する申請書), meaning the Application for Approval of Exception to Due Date for Withholding Income Tax)
  • Aoiroshinkoku No Shouninnshinseisho (青色申告の承認申請書), meaning the Application for Blue Tax Returns
  • Kyuuyoshiharai Jimushyotou No Kaisetsu Todokedesho (給与支払事務所等の開設届出書, meaning Notification of establishment of salary payment office.

7. Formalities for Hiring Employees while Establishing a Company in Japan

All the above processes are a must to establish your business in Japan. However, some mandatory steps must be undertaken before hiring employees in Japan. These steps ensure the employees’ protection and welfare to meet the Japanese labor law rules. The steps and processes are as follows:

  1. Notification for Pension and Health Insurance
  2. Notification to the Public Employment Security Office

Notification for Pension and Health Insurance

To meet the Japanese labor laws for employees’ social security, you need to submit the following documents to the Japanese Pension Office:

Notification of New Application for Health Insurance and Employee’s Pension (kenkohoken, kouseinenkin hoken shinki tekiyoutodoke)

You need to submit this notification to cover your business with health or welfare pension insurance. 

Suppose your business does not fall under the compulsory health insurance or welfare pension insurance category, such as companies with less than 5 regular employees. In that case, you need to apply for a voluntary scheme to obtain approval from the head of the pension office in the relevant jurisdiction.

Apart from the above, you must notify the pension office about the employee-specific details, including their dependents, when new employees join. 

Notification to the Public Employment Security Office

You must notify the Public Employment Security office about establishing a Workplace Covered by Employment Insurance (koyouhoken tekiyou jimusho secchitodoke).

Subsequently, you must inform this office when new employees join and the Acquisition of Eligibility for Employment Insurance (koyouhoken hihokensha shikakushutokutodoke).

Japanese Gōdō Kaisha (G.K.) and How to Establish it

A Gōdō Kaisha (G.K.) is similar to an American Limited Liability Company or an LLC. A Gōdō Kaisha has a simplified internal structure of a partnership company, with limited liability for all investors.

Limited liability companies can exercise more autonomy through their articles of association, which allows them to determine the procedures for preparing and approving their financial statements without being subject to strict laws and regulations. 

Unlike joint-stock corporations, a G.K. company is not obligated to publish its financial results. Furthermore, they may appoint “managing partners” in accordance with their articles of association, even though their members are typically required to conduct business.

To form a Godo Kaisha, all the partners must sign an incorporation article called teikan (定款). Each partner invests in the company with a capital contribution in the form of money or property.

Traditionally, G.K. business operations were not popular, and people preferred K.K. companies more; however, recently, G.K. operations have also gained popularity. Even companies like Amazon established a G.K. subsidiary in Japan.

Registering a Gōdō Kaisha (G.K.) company typically takes one to two months. 

The cost to establish a Gōdō Kaisha (G.K.) is as follows:

  • Fee for registration: Minimum JPY 60,000
  • Notary fee: Typically, JPY 40,000 
  • Fee for the consultant(s) to help with the registration: As low as JPY 30,000 to as high as JPY 700,000

Like registering a K.K. company, proper research can make you get a good deal on the consultant’s fee. 

How to Register a G.K. Business in Japan

As explained above, the process for setting up your business as a G.K. company is the same as that of a K.K. company. The only differences are as follows:

  • Unlike a K.K. company, you do not need the notarization of the Article of Incorporation of the company.
  • Transfer and receipt of capital before registration of the company are not mandatory.
  • The registration fee is JPY 60,000, much less than JPY 150,000 needed for a K.K. company.

Main Differences in K.K. and G.K. companies

The following table shows the differences between Gōdō Kaisha and Kabushiki Kaisha:

Gōdō Kaisha (G.K.) Kabushiki Kaisha (K.K.)
Any amendment of the Articles of Incorporation needs the consent of each partner (member) unless the Articles of Incorporation specify otherwise.The consent of the supermajority of shareholders/Board or directors is sufficient, and the consent of each stockholder is not required.
The shares of ownership are pre-decided and are limited. It can change with the mutual consent of all partners. Any transfer of ownership needs the consent of each partner (member) unless the articles of incorporation specify otherwise.The transfer of shares is unlimited.
All partners are representatives of the company unless decided otherwise by the appointment of managers.Only the Representative represents the company.
Any major business decisions can be made informally.Resolutions of shareholder and board meetings are required to execute the major business decision.
Partners can invest in any asset to earn interest or profits.Non-cash contributions require an appraisal supervised by a court.

Gomei Gaisha and Goshi Gaisha (Unlimited Liability Companies)

Both these company types, i.e., Gomei Gaisha and Goshi Gaisha, are not popular choices in Japan because of the unlimited liability of the partners or investors. Generally, you will not find foreigners going to register these unlimited liability companies.

Gomei Kaisha comprises investors responsible for the company’s liabilities with their personal assets, resulting in unlimited liability. 

On the other hand, Goshi Kaisha consists of active partners with unlimited liability and sleeping partners with limited liabilities. Due to the relatively higher liability on investors in these types of entities than in KK or GK, they are not frequently incorporated so as not to resemble a copy.

Registering either of these company types does not require any minimum capital. Gomei Gaisha can be set up by a solo founder, while for Goshi Gaisha, there should be a minimum of 2 partners.

Visa Types for Foreigners for Starting a Business in Japan

The right type of visa is the first requirement to register a company to start a business in Japan foreigners. Let’s look at the type of visas with which a foreigner can register a company in Japan:

  1. Investor/Business Manager Visa: This visa is designed for those who plan to start or invest in a business in Japan. It requires a significant investment (usually at least 5 million yen) or management of a business with at least two full-time local employees. It’s suitable for entrepreneurs who are establishing or taking a controlling position in a business.
  2. General Visa – Business Manager: Aimed at individuals in management roles within existing businesses in Japan. This visa is often used by managers, executives, or supervisors who are hired by a Japanese company without necessarily having ownership or control over the business.
  3. Permanent Residency: Foreigners with permanent residency in Japan have greater flexibility in starting a business. Permanent residents are not restricted by the specific conditions of business-related visas, allowing them to start a business without the stringent requirements of the Investor/Business Manager Visa.
  4. Spouse of a Japanese National Visa: Those who are married to Japanese nationals and hold this visa have fewer restrictions in starting a business. While they don’t need to meet the investment and employment requirements of the Investor/Business Manager Visa, they should still comply with general business regulations in Japan.

If you wish to start a startup in Japan and wish to be in Japan for the initial preparation before launching your business, you can take advantage of the Japanese startup visa.

Business Manager Visa

As a foreigner without permanent residency in Japan or a spouse visa of a Japanese national, you will need a Business Manager visa in Japan to start your own business.

This visa is likely the most attractive option for entrepreneurs but is one of the most difficult to obtain. A Business Manager visa requires applicants to pass a point system in which their experiences and education are evaluated and scored.

The process flow for getting a Business Manager visa is as follows:

  1. Creating an Article of Incorporation (AOI) for the company.
  2. Getting the AOI notarized in the case of a K.K. Company.
  3. Transfer funds to your Japanese bank as mentioned in the company registration flow.
  4. Company registration.
  5. If you are not in Japan, apply for the COE for the Business Manager visa. If you are in Japan, apply for the change of residency status type.
  6. Get a visa or a change of residency status.

Visa Types for Initial Business Preparations Without Making Capital Investments

To support foreigners to prepare for business without committing investments from the world, Japan also offers Startup Visa for 6 months, extendable to one year, and a short-term Business Manager visa for 4 months. 

During this visa tenure, you can stay in Japan to do the initial groundwork before formally launching your business.

Tips and Frequently Asked Questions

Is a virtual office OK to establish a company in Japan?

No, you cannot register a company with a virtual office in Japan. You must have a physical address to be able to register your business. 

You can always use a shared or serviced office space to save the office rental cost.

Can I register a company with the home address as the office?

If you have permanent residency status in Japan or even a spouse visa as a foreigner, you can register your home address as your office address. However, in the case of rental accommodation, you need to have permission from the landlord or building management. 

However, there are rules for the type of office and infrastructure needed for many businesses that need licenses to run the business. And if the office space at your home is not meeting those requirements, you will not be able to get the licenses.

One example of such requirements is the recruitment business, where Japan has strict guidelines about the specifications for office space.

Moreover, if you also need to apply for the Business Manager visa, the visa can be declined because of any small objections. Hence, having a proper business office is always safe.

Another point is that in Japan, brand image is more important than in many other countries. Having a residential address will not create a positive impression of credibility.

You can also avail some of the facilities JETRO offers, including free office space for 50 days.

Do I need to know Japanese to register a company?

No, Japanese knowledge is not required if you have some language help in Japan. Please note that all communication, including application forms, etc., will be in Japanese; you will need help with Japanese.

Do I need a native Japanese co-founder or director to register the business?

No, Japanese laws do not require you to have a Japanese co-founder or director to register a company in Japan. However, you need to have a representative director who is based in Japan.

What is the minimum requirement for capital for registering a company?

There is no minimum requirement for the capital needed to set up a branch office and for a Gomei Gaisha or Goshi Gaisha. For a G.K. or K.K. company, it’s a token requirement of a minimum of 1 Japanese yen.

However, not having a respectable capital may affect many approvals, including opening a bank account for your company. 

The most common amount of capital used for establishing a small business is 3 to 5 million in Japan. If that amount is difficult, it is advisable not to go for below 1 million Japanese yen as the initial capital. 

How do I run a sole proprietorship business or do freelancing work as a business?

We have not covered this among the types of companies because it is not a legal entity with a corporate structure. Still, you can register for a “Kojin Jigyo” for your business as a freelancer or for a small sole proprietorship business.

While you can deduct all your expenses from the revenues, you will also have unlimited liability for any financial exposures. As this personal business does not fall under the companies’ act, any hired help will not be covered under social security’s requirements like pension and insurance.

Are there any subsidies available to start a business in Japan?

Yes, Japan offers subsidies to support new businesses and investments. There are two types of subsidies as follows:

  • National level subsidies
  • Subsidies offered by local city or prefecture governments

The type of subsidies changes with time and situations, and it is always advisable to contact JETRO to know about the current situation. You can find details about the national-level subsidies here. Please note that some of the information will only be available in Japanese; however, you can get all the support in English by contacting JETRO directly.

Conclusion

Japanese government’s continuous efforts to bring reforms to attract businesses in Japan, the support for establishing new businesses, and the great prospects because of the aging population make Japan a great place to start a business.

Moreover, even if the sales cycle is long, once you build trust and relationships, Japan offers more stability in long-term business relationships than most other countries.

Considering all the above points, if you wish to start a business and establish a company in Japan, we are sure this guide will be very handy. Moreover, if you are already running a small business in Japan and looking forward to growing it faster, consulting company Scaling Your Company is your ultimate resource.

Himanshu Jain

A long-term ex-pat in Japan, Himanshu comes with an IT background in SAP consulting, IT Business Development, and then running the country operations of an IT consulting multinational. Himanshu is the co-founder and Managing Director of ReachExt K.K. and EJable.com. He is also an Advisory Board Member of a Silicon Valley AI/IoT startup.

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