Setting up a company in Japan as a Foreigner

When setting up a business in Japan, there are essentially two choices for incorporating the business.  They are Godo Kaisha (GK) or Kabushiki Kaisha (KK).  For many entrepreneurs and start-ups the Goudou Kaisha is preferred choice.  Here are the differences:


The Godo Kaisha is easier and less expensive.  It is appropriate for most small to medium sized businesses.  The limitations are with regard to raising capital by issuing shares or stock.  The GK is similar to Limited Liability Company (LLC).


The Kabushiki Kaisha might be more appropriate for an overseas company seeking to establish a subsidiary in japan.  The KK is set up similar to many public held companies in the US.  There is delineation between ownership and management.  Ownership consists of shareholders.  Also there is a dedicated board of directors  – it is a requirement for all KK’s to have at least one representative as a board member.


There is also a perception in japan between the two types of business structures.  The KK is more prestigious.  It gives an impression that ii is a fundamentally sound company.  Customers, vendors and employees will view the company as more trustworthy.


After your Manager/Investor Visa is issued with a residence card and you complete the incorporation of the business (GK or KK), then you can finally start the long process of opening a business bank account.  Opening a business bank account will require patience.  The process is thorough and painstakingly long.  There are some steps that you can anticipate that will save some time.  Be prepared to provide the company registration certificate, company seal (hanko).  This stamp is powerful and is used in lieu of signatures.  Other documents to anticipate may include:  business plan, company profile, passport, residence card, and proof of business location with floor plan.  It is possible the bank will want to visit and verify the office location.  It is safe to say, that opening a business bank account will likely involve multiple visits to the bank.  There is a lot of caution that banks practice for opening a business account, particularly with foreigners.  If you are accustomed to opening personal and business bank accounts in the US online and remotely without visiting the branch, then this process will be a real test of patience.


Also it is worth mentioning that doing this independently as a foreigner is quite a task.  Even if you are fluent in Japanese, the business bank account can be difficult.  Having the support of a japanese resident will help with the process.  It might even be a requirement in some cases.  There is a personal verification that seems to apply.  It can be a frustrating process, as it seems like the bank is not interested in gaining your business.  As the applicant, it is puzzling that you are trying to hand over a large sum of money to the bank and the bank is resisting it.  It is an insightful experience of what to expect when doing business in japan.


There are many hoops to jump through.  Certificate of Eligibility is almost like an application for approval, before you can do the application process again for a visa.  Navigating through all the applications, for COE, visa, business incorporation, alcohol import license were less troublesome than the business bank account process.  Even the best preparation will require a lot of hours spent at the bank.