Japan is one the strongest economies that provide plenty of opportunities for business and implementing innovations. Aotopay specialists may assist you in setting up a business in Japan and have prepared a short overview of the country’s profile.
Major Forms of Company Types in Japan
If you intend to establish your business presence in Japan, you may do this in the next forms:
- Limited Liability Company (Godo Kaisha) – a vehicle where the liability of founders (shareholders) is restricted with the value of contributions made.
- Joint-Stock Company (Kabushiki Kaisha) – a vehicle designated to run a large business mostly and involving investments through the share allocation process (in this case a company becomes a public joint-stock company).
- General partnership (Gomei Kaisha) – all partners bear joint and entire liability for all partnership’s undertakings.
- Limited Partnership (Goshi Kaisha) – a vehicle has (i) general partners who are entirely liable for all partnership’s undertakings, and (ii) limited partners who are liable exclusively within the limits of their contributions.
- Representative Office – this formation is necessary for maintaining preparatory and similar activities necessary for establishing a substantial business presence of a foreign company in Japan.
- Branch Office of a Foreign Company – a vehicle that can conduct business operations in Japan that align with the principal activities of a foreign entity. This becomes possible after the registration of a branch office.
Incorporation Requirements and Steps
Setting up a company in Japan requires passing these stages:
- Shortlisting main types of business activities you are going to conduct in Japan.
- Choosing your business name and the registered address.
- Drafting and notarization of statutory documents for the future company
- Forming governing bodies of the future company.
- Filling registration forms and submitting the set of documents to the Commercial Register held by the Ministry of Justice of Japan.
- Opening your corporate bank account.
- Registration for tax and social security purposes.
The actual format of the company registration procedure will vary on a case-by-case basis.
Legal and Regulatory Framework
The overall legal framework in Japan may be assessed as highly transparent but bureaucratic at the same time. The Law for Facilitating the Creation of New Business,, the Companies Act, Limited Partnership Act for Investment and the Commercial Code of Japan are major legal acts regulating the procedure of business conduction in Japan.
Advantages of the Jurisdiction
- One of the strongest and developed economies
- Extremely skilled employees
- Strong emphasis on R&D works
Tax System
Here are principal highlights of the Japanese tax system:
- Corporate income tax (CIT) rate – 23.2 %
- Personal income tax (PIT) rate – 45%, plus 2.1% surtax
- Consumption tax (VAT equivalent) – 8 %
- Withholding tax rates (for non-residents) – (i) dividends – 15 %, (ii) royalty – 20 %, and (iii) – interests – 20 %
- Capital gains tax rates – (i) corporate – equal to the normal CIT rate, (ii) individual applicable to the transfer of stocks – the total rate of 20.315% (comprises national and local taxes).
How Aotopay Specialists May Help You
If you consider Japan as a jurisdiction for establishing your future company, Aotopay specialists may consult you on the matter. We may also open a company in Japan and a corporate bank account for it as well as facilitate bypassing any potential difficulties that may arise in terms of its operation. Reach us shortly via phone or email for more precise discussions.