International entrepreneurs find conducting business in Japan complex. That said, the Japan External Trade Organisation (JETRO) reported that 83% of foreign-invested firms in Japan experience ‘fair’ to ‘booming’ business there. Healy Consultants effectively assists with all aspects of Japan company formation. The following information will help you determine if Japan company formation is the optimum corporate structure to fulfill your international business objectives:

Fortunately for entrepreneurs in Japan, the minimum capital requirement for either a Godo Kaisha (Limited Liability Company) or a Kabushiki Kaisha (Joint Stock Company) is low, at 1 Yen. Five years after Japan company formation, however, it is compulsory for a GK and KK to have raised their capital to at least 3 million Yen (US$37,000) and 10 million Yen (US$123,500), respectively. For more information on a Godo Kaisha, visit Healy Consultants' Japan Godo Kaisha page, and for more information on a Kabushiki Kaisha, refer to Healy Consultants' Japan Kabushiki Kaisha page.

Entrepreneurs investing in Japan should note that a minimum of one director and one shareholder is needed to complete Japan company formation. Neither director nor shareholder need be resident in Japan but a resident company representative is required.

Japan is ranked as the 2nd most competitive Asian economy and the 9th most competitive worldwide by the World Economic Forum's Global Competitiveness Index 2011-2012. However, in its 2011 World Competitiveness Yearbook, the Switzerland-based IMD positively ranks Japan as the world’s 26th most competitive economy. The ranking takes into account factors including economic performance, government efficiency, business efficiency and infrastructure.

Japan is positively ranked as the world's 19th freest economy in the Heritage Foundation's 2011 Index of Economic Freedom, a measure of freedom enjoyed in business, trade, monetary, financial, investment and labour markets.

According to the World Bank's Doing Business 2011 Survey, Japan is positively ranked as the world's 18th easiest country in which to do business. The survey measures factors including Japan business formation start up procedures, time, cost and minimum capital required to start a business. Furthermore, Japan is positively ranked as the world's 14th least corrupt country according to the 2011 Corruption Perceptions Index by Transparency International, a global measure of corruption among public officials and politicians.

Following a Japan company formation, it is easy to open corporate bank accounts all over the world. Healy Consultants works with internationally-recognised banks such as HSBC, Standard Chartered and Citibank to provide corporate bank account services.

Japan company formation law is complex and the company incorporation is time-consuming.

To meet government requirements for Japan company formation it is necessary to rent local office space.

Godo Kaisha, Kabushiki Kaisha and Japan Branch Offices are subject to corporate tax of 22% on income up to 8 million yen, and 30% on income over 8 million yen. In addition, companies are subject to pay local and corporate inhabitant taxes depending on the different prefectures in Japan. As such, the total tax burden that a firm has to pay may range from 30.80%-44.79%. Capital gains are taxed as regular income. The foreign parent of a Japan Branch Company is liable for any of its branch office’s debts because they are not separate legal entities.

When incorporating a company in Japan, it is important to note that a Kabushiki Kaisha must appoint an internal auditor.

It can take up to 3 months to secure work permit approval for foreign staff following Japan company formation.

A Japan representative office is not permitted to sell products/services and can only conduct marketing activities, surveys and feasibility studies.

According to DTZ's 2010 Global Occupancy Cost Report, Japan has one of the highest occupancy costs and is one of the most expensive places both globally and in the Asia Pacific to run an office.

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