Company Formation in Japan - How to Do it From India

Japan is the world’s third-largest economy. The well-equipped infrastructure, skilled manpower, transparency are the key factors of Japanese Government to attract investment from foreign investors. For investing in Japan, it is mandatory to have an entity over there. If you do not have a local entity, potential Japanese employees will perceive that you lack the commitment to the market.

Business Structure: The type of entities which can be established in Japan are as explained below:

· Sole Proprietorship: This type of entity is less time consuming and a basic form of business in Japan. It is owned and run by one individual. The owner itself owns all profits/losses, assets/debts of the business. For becoming a sole Proprietor, there isn’t any mandatory provision regarding registration, the applicant can simply commence their business when they are ready to start provided they only have to submit certain notifications, to the tax office within 2 months after the commencement of the business activities, and file a tax declaration once a year, between February and March for the income earned during the previous year.

· Corporation: In the form of Corporation there are two types of entities such as:

· Kabushiki Kaisha (KK)-This type of entity is the most credible form of company in Japan. At least one shareholder and one Representative Director. Both of them can be the same person. This kind of business has a Limited Liability Company by share. In this type of business set up, it is mandatory to publish financial statements.

· Godo Kaisha (GK)- The establishment of the entity in this form is purely a new concept introduced in 2006. It is most popular among small and medium-sized companies. It functions more like a partnership. At least one partner is required for establishment. It is basically owned and managed by partners and also not required to publish its financial statements.

Establish a Company in Japan

Foreign Company can also establish an entity in Japan in one of the following modes:

· Representative Office: Setting up a business in this form means simply having a physical office space located somewhere in Japan. This type of entity doesn’t require any registration procedures. For incorporation opening of a bank account is not mandatory. These types of entities are not subject to any tax.

· Branch Office: A foreign investor can invest in Japan in this mode also. For a branch office, a Japanese resident must be appointed as the branch representative. Foreign Investor has to comply with the registration procedure for incorporation. Branches are taxed at the same corporate income tax rate for the profits they derive from the country.

· Subsidiary Company: This type of entity has a separate legal entity. It has a flexible relationship with the parent company. A foreign company can be the shareholder of its Japanese subsidiary. It has a greater legal authority for acting independently. It can assume liabilities separately from the parent company.

Registration Procedure:

Procedure for establishing a company in Japan as explained below:

· The first and foremost step in company incorporation, is making of company seal and get it registered and obtain a certificate of seal registration;

· Prepare the article of Association and get it registered with the Japan Legal Affairs Bureau, via a standard application;

· If the application is approved, then the certificate of seal registration is delivered to the Legal Affairs Bureau and after this, it comes to the final registration of the formed company;

· Next Step is to send a notification regarding company formation in japan, and special notification in case of opening a payroll office is also submitted together with a request for the approval of blue tax returns to the District tax office.

· In case, if new the company starts to hire employees in Japan, it must register at the Labour Standards Inspection Office for labor insurance;

· The last step submitting an application to the Public Employment Security Office after hiring the first employees

The registration process approximately takes place less than ten days, when all the documents are in order. For further information mail us on info@enterslice.com