How Foreigners Can Start a Company in Japan: The Complete Guide
Here's the short answer: yes, foreigners can start a company in Japan using largely the same process as Japanese nationals. Neither Japanese citizenship nor Japanese residency is a legal requirement for incorporation itself. What does require careful planning is your visa status if you intend to actively manage the business you form. This guide walks through the process, what to prepare, and what changed with the October 2025 Business Manager visa reform.
Incorporating vs. Managing: Two Different Questions
The first thing to understand is that "can I form a company" and "can I run it" are separate questions with separate answers.
If you already hold a status of residence with no work restrictions — Permanent Resident, Spouse of a Japanese National, Long-Term Resident, or Spouse of a Permanent Resident — you can incorporate and manage a company just like a Japanese citizen, with no additional visa steps.
If you hold a work-restricted visa (Engineer/Specialist in Humanities/International Services, Student, etc.), you can still incorporate a company. But to actively manage it, you'll generally need to obtain a Business Manager visa through Japan's immigration authorities.
Business Manager visa requirements were significantly tightened as of October 16, 2025. The previous standard — ¥5 million in capital OR two full-time employees — has been replaced by a much stricter combined requirement: ¥30 million in capital AND at least one full-time employee.
Eligible full-time employees must be Japanese nationals, Special Permanent Residents, or hold a status-based visa (Permanent Resident, Spouse of Japanese National, etc.) — work-visa holders don't count toward this requirement. A minimum level of Japanese proficiency (roughly JLPT N2) is also now required, held by either the applicant or the employee.
Kabushiki Kaisha vs. Godo Kaisha: Which Entity Type?
Foreign entrepreneurs in Japan generally choose between two entity types: the Kabushiki Kaisha (KK, roughly equivalent to a corporation) and the Godo Kaisha (GK, similar in structure to an LLC).
| Comparison | Kabushiki Kaisha (KK) | Godo Kaisha (GK) |
|---|---|---|
| Credibility with Japanese partners | High — well-established, widely recognized | Growing, but still less familiar to some counterparties |
| Setup cost | Higher (requires articles of incorporation notarization) | Lower (notarization not required) |
| Annual financial disclosure | Required | Not required |
| Governance flexibility | Requires shareholder meetings, formal procedures | Flexible, defined by articles of incorporation |
Entrepreneurs prioritizing brand credibility with Japanese clients and future fundraising tend to choose the KK. Those prioritizing lower upfront cost and faster setup often choose the GK. Note that unlike a US LLC, a GK cannot elect pass-through taxation under Japanese tax law.
Documents You'll Need
The biggest practical difference from incorporating in most Western countries is Japan's reliance on registered personal seals (inkan) and corresponding certification. Most countries don't have an equivalent system. In its place, foreign incorporators typically use a notarized signature certificate, obtainable either in your home country or at a notary office in Japan.
- Articles of Incorporation
- Identity verification for incorporators and directors (seal certificate or signature certificate)
- Proof of capital payment
- Director's letter of acceptance
- Documentation of registered office address and company seal
Any foreign-language documents submitted with your registration application generally require a Japanese translation.
Timeline and Cost
Assuming documents are ready, registration typically completes in about 2 weeks for a GK and 3 weeks for a KK, if all directors reside in Japan. Add extra time — often several additional weeks — if directors are based overseas, due to signature certificate procurement and international courier delays.
Total cost, including statutory fees (notarization, registration tax) and professional fees for administrative/judicial scriveners, typically runs roughly ¥300,000–¥400,000, though this varies with entity type and scope of work.
What Comes After Registration
Completing registration isn't the finish line. Post-incorporation, you'll need to:
- File incorporation notifications with the tax office, prefecture, and municipality
- Open a corporate bank account
- Apply for status of residence change (if pursuing a Business Manager visa)
- File social insurance and labor insurance registrations (if hiring employees)
Of these, corporate bank account opening is where most foreign founders hit friction. We cover this in detail in our related article, "Why Foreign-Owned Companies Struggle to Open a Bank Account in Japan."
The Bottom Line
Incorporating in Japan as a foreign national is more accessible than many assume — the real complexity lies in correctly navigating visa requirements from the outset, particularly given the stricter 2025 Business Manager visa standards. Document preparation, translation, and administrative procedures add friction that's best handled alongside an advisor familiar with both the legal process and the practical realities foreign founders face.
One Partner, From Incorporation to Banking
We support foreign nationals and overseas investors end-to-end — company formation, bank account opening, and ongoing operational consulting, all under one roof.
Get a Free Consultation