Japan company registration

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Japan company registration

DOING BUSINESS IN JAPAN

Since 2003, Healy Consultants Group PLC has been efficiently and effectively assisting our Clients with i) business registration ii) business licensing iii) Japanese business banking solutions iv) visa options and staff recruitment strategies and v) workspace rental solutions.

Press the link headings below to read detailed, relevant, up to date information.

  • Benefits and disadvantages

    Benefits of Japan company registration

    Japan business registration advantage

    1. It is easy for our Clients to setup a company in Japan because:
      • Healy Consultants can setup our Client’s Japanese LLC with only 1 shareholder and 1 director and minimal requirement of initial capital;
      • Since March 16, 2015, Japanese companies no longer require appointment of a resident director. As a result, both directors and shareholders can be non-resident foreigners;
      • Lastly, Healy Consultants incorporation team will ensure there is no requirement for our Clients to travel to Japan to complete the company setup engagement.

    2. A Japan company is likely to benefit from the following advantages including:
      • Japan is one of the most politically stable countries in Asia, boasting a reputable regulatory environment. Consequently, a Japanese company is an excellent solution for i) signing regional contracts with customers and suppliers; and ii) registering intellectual property;
      • Japan is the 2nd largest country in Asia (by GDP) and 3rd largest in the world. Furthermore, with its population of 126 million, our Clients will have access to a large potential consumer base if they setup a Japanese company;
      • Japan is a major international financial centre. The Global Financial Centre Index ranks the country as the 5th best financial centre in the world. Furthermore, the Tokyo Stock Exchange is the largest exchange in Asia and the 3rd largest exchange in the world;
      • Japan is a major global trading hub. The Narita International Airport is ranked as the 8th largest airport (by cargo traffic), while Keihin Port is ranked as the 20th largest seaport in the world (by cargo volume);
      • Our Clients will also benefit from availability of excellent infrastructure in Japan (ranked 5th best in the world) and highly sophisticated business environment (ranked 2nd best in the world);
      • Japan boasts 3 free zones offering companies no custom duties, and flexible labour laws. The three free zones are Nagasaki, Niigata, Okinawa, and Tokyo;
      • Japan has currently signed double taxation treaties with 96 countries allowing local companies to minimize withholding tax when remitting funds to other countries.

    3. Lastly, as a result of the above, Japan was ranked as the 8th most competitive economy in the world by the World Economic Forum in their annual rankings for the year 2016-17.

    Disadvantages of Japan company registration

    1. In Japan, foreigners are likely to face certain operational challenges including:
      • The country has a closed economy, consequently consumers prefer to purchase local products only. Furthermore, there has been minimal trade between Japan and China since the 2nd World War;
      • All business documents are also written in Japanese. Also, the local business law can be relatively complex, which puts foreign companies at a disadvantage. Consequently, our Clients are advised to engage services of a local law firm once their companies are operational;
      • Government bureaucracy can be frustrating in Japan because i) it is slow and involves a lot of administrative overhead; and ii) it favours Japanese nationals over foreigners;
      • Renting an office in the country is expensive. The Average office rental per month is around US$200 per sq. ft;
      • Following company establishment, monthly financial statements must be submitted to the local authorities.

    2. Japanese companies may also face issues with local employees because:
      • Only 15% of the Japanese population speak English fluently, making it difficult for foreigners to converse with their local employees;
      • It is difficult to terminate unproductive employees in the country, as Japanese employment law encourages “life time employment”;
      • The country’s labour costs are amongst the highest in the world. The average monthly salary per skilled worker is US$3,700 excluding bonus.

    3. Lastly, the country is located near a tectonic plate boundary. As a result of this, there are on average 1,500 earthquakes every year. This may disrupt daily business and trade operations from time to time.
  • Best uses for a Japanese company

    1. Japan is an excellent jurisdiction for companies investing in innovation and R&D activities because:
      • Japanese governments allows several tax credits for R&D companies (focusing on scientific and technological research). The values of these tax credits may vary between 5% and 30% of the corporate tax before credit;
      • Incentives are also available for companies which are willing to invest in order to innovate and improve their production facilities. Such companies can claim i) up to 100% depreciation on their assets or ii) tax credits of up to 20%;
      • The World Economic Forum ranks Japan as the 3rd best jurisdiction in the world for “availability of scientists and engineers” metric and the 13th best for “quality of scientific research institutions”. As a result, Japan is ranked the highest in the world for “PCT patents applications/million population” metric;
      • Consequently, the corporate advisory firm, Solidiance ranks Tokyo and Osaka as the 6th and 8th most innovative cities in the world. Such high rankings are generally due to the country’s talented labour force and excellent infrastructure;

    2. A Japan company is also recommended to take advantage of the highly lucrative market of the world’s 3rd richest economy. Furthermore, due to the distinct culture, business practices and island location of the country, a resident company (with local employees) can help foreigners understand the market better, especially since English is not widely spoken among locals.

Company registration

  • Time to incorporate: Six weeks
  • Cost to set up: US$11,325
  • Minimum capital: US$1
  • Physical office required: Yes

Required appointments

  • Shareholders: 1
  • Directors: 1
  • Company secretary: No
  • Resident director: No

Key facts

  • Corporate tax rate: 30%
  • Corporate tax base: Worldwide
  • Shelf companies: No
  • Main company type: Godo Kaisha

Frequently asked questions

Contact us

For additional information on our company registration services in Japan, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Ms. Chrissi Zamora, directly:
client relationship officer - Chrissi
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