Starting a Business in Japan: What Does It Actually Cost to Set Up?

How much does it really cost to start a business in Japan? From KK and GK registration fees to capital, taxes, banking, social insurance and the Business Manager visa, this practical 2026 guide breaks down the costs, timelines and decisions foreign entrepreneurs need to understand before setting up a company in Japan.

What does it actually cost to set up a company in Japan? A practical breakdown of incorporation and early-stage business costs.

by Anil Raj

Over the years I have walked a good number of people from India and elsewhere through their first steps in Japan, usually because somebody introduced us and they had nobody else to ask. 𝐇𝐨𝐰 𝐝𝐨 𝐈 𝐬𝐭𝐚𝐫𝐭 𝐚 𝐜𝐨𝐦𝐩𝐚𝐧𝐲 𝐢𝐧 𝐉𝐚𝐩𝐚𝐧, 𝐚𝐧𝐝 𝐡𝐨𝐰 𝐦𝐮𝐜𝐡 𝐰𝐢𝐥𝐥 𝐢𝐭 𝐜𝐨𝐬𝐭 𝐦𝐞? I am asked this more than almost anything else. It comes from people already living here who have decided to stop working for somebody else, and from people who have never set foot in the country but have looked at the market and want in. Sometimes it arrives as a long message at eleven at night. Sometimes it is the first question after we shake hands.

I have been answering it in fragments for years, and giving a slightly different answer each time depending on how much time we had. So I have written the whole thing down once, properly, and from now on I will simply send people here.

I registered my first company in Japan in 2005, and several since then, across restaurants, education and IT. What I remember from the first one is not the registration, which a scrivener handled in a fortnight, but everything that came afterwards. The bank meetings. The first payroll. A year-end filing that arrived while I still thought of the company as new.

Most guides to this are written by the firms that file the paperwork. They are accurate, and they stop more or less where the difficulty starts.

One thing to settle first, because it causes more confusion than anything else. Registering a company in Japan and getting a visa to run it are two separate processes under two separate bodies of law. A foreigner can incorporate here on exactly the same terms as a Japanese national. Whether you may then live in Japan and manage that company is a different question, and the requirements changed significantly in October 2025. I covered those in an earlier article on the ¥30 million rule.

My honest recommendation before you read further. If your Japanese is not strong, hire a professional to run this process. Every document is in Japanese and has no legal standing in any other language. You will do this once in your life, and learning a procedure you will never use again saves a few hundred thousand yen while one error in the articles costs money and time to correct. If your Japanese is genuinely strong, do it yourself. Plenty of people manage alone.

What follows is not a substitute for that professional. It is so you can have an informed conversation with them, know what you are paying for, and understand what your company will cost to run.

I am not a lawyer, a gyoseishoshi or a tax accountant. This reflects where things stand in 2026. Confirm the details before you file.

KK or GK

A Kabushiki Kaisha, or KK, is the joint-stock company. A Godo Kaisha, or GK, is closer to an LLC and has been available since 2006.

The most common misunderstanding is that a KK is simply the better one. It is not. Both receive identical tax treatment and both are equally acceptable for a Business Manager visa, so if somebody tells you a GK will hurt your visa application, they are mistaken.

What the choice actually turns on is perception, which is a softer thing and harder to advise on. The KK is the form Japanese banks, large corporate customers and government bodies expect to see. The GK has been around since 2006 and is still, twenty years on, mildly unfamiliar to older counterparties. That is not fair to the GK, but it is the situation.

So ask who you will be dealing with. A KK if you expect to sell to large Japanese companies, may raise investment, or need bank credibility early. A GK if you are running lean and your customers are individuals rather than procurement departments. I have used both. My own feeling is that for a client-facing business the extra cost of a KK is small against what it buys you, and that for testing an idea a GK is perfectly respectable, with conversion possible later.

What registration costs

KK. Registration and licence tax of 0.7% of paid-in capital, minimum ¥150,000. Notarisation of the articles, priced by capital: ¥30,000 under ¥1 million, ¥40,000 up to ¥3 million, ¥50,000 above. Since December 2024 there is a reduced ¥15,000 rate where capital is under ¥1 million, all founders are individuals numbering three or fewer, they subscribe for all shares at incorporation, and the articles do not establish a board. Certified copies add about ¥2,000.

GK. Registration tax of 0.7% of capital, minimum ¥60,000. No notarisation, which is where most of the saving comes from.

Both. Stamp duty of ¥40,000 if the articles are filed on paper, which disappears entirely if they are filed electronically with a digital signature. A lot of people assume this one applies only to a KK. It does not, so file electronically whichever structure you pick.

On government fees alone, a GK saves roughly ¥140,000.

One saving almost nobody mentions to foreign founders: municipalities run a Specified Startup Support Programme under the Industrial Competitiveness Enhancement Act. Complete it, obtain the certificate, and your registration tax halves to ¥75,000 for a KK or ¥30,000 for a GK. The catch is time, since it usually runs over several months. If your timeline allows, ask your ward office.

Then professional fees. Bilingual support typically runs ¥100,000 to ¥600,000 for a KK and ¥30,000 to ¥300,000 for a GK, depending on whether you are resident here and whether documents need apostilles and sworn translations. All in, a straightforward KK with help lands between ¥500,000 and ¥800,000; a GK well under half that. Treat it as part of the cost of incorporating: against a first year running into millions, it is a small line item.

How much capital to put in

This is where foreign founders get confused more than anywhere else, and it is worth going slowly.

Under company law there is no minimum capital in Japan and no separate rule for foreigners. Legally, ¥1 will do it.

Under immigration law, if you need a Business Manager visa to live here and run the company, the capital requirement is ¥30 million as of 16 October 2025, up from ¥5 million. It comes with new conditions: a full-time employee in an eligible residence status, three years of management experience or a relevant advanced degree, Japanese at B2 level from you or your employee, professional verification of your business plan, and a real office, which rules out a home address or a virtual one.

Which applies depends on your situation. If you already hold a status permitting business, such as permanent residence, spouse of a Japanese national, or long-term resident, you do not need the Business Manager visa and the ¥30 million figure has nothing to do with you. If you are outside Japan and intend to move here to run the company, that visa is your route: you can incorporate for less, but you will not get the visa. If you are already here on a work visa employed by someone else, changing status brings you under the same requirement.

So work out the immigration position before you settle on a capital figure, because it may decide the figure for you.

For anyone not constrained by the visa, please do not incorporate at ¥1. That number sits on your commercial register for every bank, landlord, supplier and client to read, and they do read it.

What I tell people is this. If your business needs less than ¥5 million to get going, put in ¥5 million anyway. On paper the figure makes no difference to anything. In the room it makes a considerable difference. When you are sitting in front of a landlord who is deciding whether to lease you a space, or a bank officer deciding whether to open your account, that number is one of the very few hard facts they have about you, and ¥5 million reads quite differently from ¥1 million. It costs nothing extra in registration tax at that level.

If your business needs more than that, capitalise at what the plan actually requires. But stop and talk to your accountant before you cross ¥10 million, because a newly established company whose capital is ¥10 million or more at the start of a fiscal year becomes a consumption tax payer from year one, while a company below that threshold is generally exempt for its first two years. That exemption is worth real money to most small businesses, and it is a five-minute conversation that can save you a great deal.

A mechanical point while we are here. Registration tax is 0.7% of capital, so once you go above roughly ¥21 million for a KK or ¥8.5 million for a GK, the fee starts climbing past the minimum.

And whatever figure you land on, keep documentation of where the money came from. Authorities look at this closely on larger amounts, and reconstructing it two years later is miserable work.

The steps, and how long they take

Settle the basics: name, business purpose, registered address, capital, fiscal year, and who the representative will be. The business purpose deserves more thought than people give it, because it must be specific enough for the commercial register and broad enough to cover what you might do in three years, and amending it later costs money.

Then the articles of incorporation, which must be in Japanese. An English version has no legal effect. For a KK these go to a notary; for a GK they do not.

Next, capital deposit. The company does not exist yet, so the money goes into a founder's personal account and the bank statement becomes proof of payment. Then you file at the Legal Affairs Bureau with the articles, proof of capital, officer acceptance forms and the registration tax.

A GK typically completes in one to two weeks, a KK in two to three. Delays almost always come from incomplete documents, an error in the articles, or a problem with seal registration.

If you are reading this from outside Japan, one useful thing to know: since March 2015 there has been no requirement for a Japan-resident representative director, so you can register a company here without living here. Getting the company registered is rarely what stops people in that position. Getting it a bank account is, which brings me to the next part.

The week after registration is when the real work starts

Registrations fall due almost immediately. The national and local tax offices need filings, starting with your notification of incorporation. The Japan Pension Service needs you enrolled in social insurance. If you are hiring, the Labour Standards Inspection Office and Employment Security Office need their own.

The one I would single out is the blue return application. It lets a company carry losses forward for ten years, and a company with capital of ¥100 million or less can also carry a loss back against the previous year for a refund. In year one and year two that matters enormously. The National Tax Agency sets the deadline as the day before whichever comes first: three months after incorporation, or the end of your first fiscal year. Miss it and you file a white return and wait a year.

Your corporate tax return is then due within two months of your fiscal year end.

None of this is difficult, but the deadlines are close together. Engage your accountant before you incorporate, not after.

The corporate bank account

For most foreign founders this is the real bottleneck, and it surprises people who assumed incorporation was the hard part.

The bank is judging a company with no trading history. It will want to know what the business does, where the money comes from, who the customers are, and that there is a real office behind the application. Prepare as you would for an investor meeting: business plan, lease, website, and be ready to explain it in Japanese or with someone who can.

If you take one piece of practical advice from this article, take this one: do not start with the megabanks.

A new company has nothing to show them. No trading history, no relationships, nothing. The large national banks are the least likely of anyone to look past that, and a foreign-owned company in its first month is close to the exact profile their screening exists to be careful about. I have watched people spend weeks collecting rejections and conclude something is wrong with them personally, when what they have run into is a policy.

Go to a shinkin bank instead, or a credit union, or a smaller regional bank. Shinkin are cooperative institutions with a mandate to serve small businesses in their own area, which changes the whole tone of the meeting. They are interested in what is happening on their own street. The branch manager has more room to make a decision than his opposite number at a megabank would. And you are building a relationship with people who will still be at that branch in five years.

Pick the branch nearest your office and go in person. Later, once you have a year of trading behind you, a megabank account becomes much easier to open, though you may well find by then that you do not particularly need one.

Two smaller things. Speak to a bank before you incorporate, not after, so you know what that branch will ask for. And use a real office address, since virtual offices create friction with banks and are not accepted for a Business Manager visa at all.

What it costs to keep running

It is the running cost that catches people out, rather than anything they spend getting registered. For an SME in Tokyo, JETRO puts the combined corporate tax burden at 22.40% on taxable income up to ¥4 million, 24.86% between ¥4 million and ¥8 million, and 36.80% above ¥8 million. Those rates apply while paid-in capital stays at or below ¥100 million. A new Special Defence Corporate Tax arrives for fiscal years beginning on or after 1 April 2026, but it is a 4% surtax applied after a ¥5 million deduction from the corporate tax amount, so a smaller company will not pay it.

The per-capita portion of corporate inhabitant tax is payable whether or not you make a profit. A loss-making year does not exempt you. In the Tokyo special wards, for capital of ¥10 million or less and fifty or fewer employees, that is ¥70,000 a year.

Consumption tax at 10% applies once taxable sales pass ¥10 million in the relevant base period.

If you employ anybody, including yourself as a director, budget employer social insurance at roughly 15 to 16% of gross pay. For fiscal 2026 the Tokyo health insurance rate is 9.85% and employees' pension insurance is 18.30% nationally, both split evenly, and the employer alone pays a child care contribution of 0.36%. A ¥5 million salary costs the employer around ¥5.75 to ¥5.8 million.

And if you are taking commercial space in Tokyo, the upfront cost ends more first-year plans than any tax rate. Between deposit, key money, first and last month's rent, agency fee and guarantor fee, you can be looking at the better part of a year's rent before serving a single customer.

What I would do differently

Do not do this alone unless your Japanese is strong. You will do this once. Pay someone who does it every week.

Choose the structure based on who your customers will be. If you are selling to large Japanese companies, a KK saves you a question you would otherwise keep having to answer.

Do not skimp on capital. If you need less than ¥5 million, put in ¥5 million anyway. It costs nothing extra and it changes how you are received.

Get the business purpose right the first time. An afternoon of thought now, or money to amend later.

Talk to a bank before you incorporate, and make it a shinkin or a smaller local bank. Budget for the first year of operating, not for the registration. Registration is the smallest number in this article.

Get a good accountant early and keep them. In twenty-eight years here I have not found a better return on a monthly fee.

Japan has a reputation abroad for being hard to get into. Twenty-eight years here have left me thinking close to the opposite. The rules are written down and the fees are published. The process takes as long as it says it will take. And a company properly registered here gets to operate in one of the most stable commercial environments anywhere, which is worth a great deal more than people starting out tend to realise.

What the system asks of you is preparation and paperwork that is actually correct. That is a lower bar than it looks from the outside, and a fair price for what sits on the other side of it.

Where to check this for yourself

JETRO — procedures and effective tax rates

Ministry of Justice, Legal Affairs Bureau — company registration

National Tax Agency — registration tax, corporate tax, consumption tax, blue return

Japan National Notaries Association — current certification fees

Tokyo Metropolitan Bureau of Taxation — corporate inhabitant and enterprise tax

Japan Pension Service and Kyokai Kenpo — social insurance rates

Immigration Services Agency of Japan — Business Manager visa

Your ward or city office — the Specified Startup Support Programme

If you are at the beginning of this and a conversation would help, my inbox is open.

About the Author

Anil Raj is the Founder and President of RAJ GROUP, Tokyo (www.rajgroupglobal.com), which he established in 2005. The group operates across hospitality, education and IT consulting, including the Nirvanam group of North and South Indian restaurants (www.nirvanam.jp), Nehan Technologies (www.nehantech.com) and Star Kids International Preschool (www.starkids-japan.com). He serves as President of the India-IT Association Japan (IITAJ) and is a co-founder of the Indian Restaurant Association Japan (IRAJ). He has lived and worked in Japan for twenty-eight years, and writes on the India-Japan business corridor.

𝑽𝒊𝒆𝒘𝒔 𝒆𝒙𝒑𝒓𝒆𝒔𝒔𝒆𝒅 𝒉𝒆𝒓𝒆 𝒂𝒓𝒆 𝒑𝒆𝒓𝒔𝒐𝒏𝒂𝒍 𝒂𝒏𝒅 𝒂𝒓𝒆 𝒏𝒐𝒕 𝒍𝒆𝒈𝒂𝒍, 𝒕𝒂𝒙 𝒐𝒓 𝒊𝒎𝒎𝒊𝒈𝒓𝒂𝒕𝒊𝒐𝒏 𝒂𝒅𝒗𝒊𝒄𝒆. 𝑹𝒖𝒍𝒆𝒔 𝒂𝒏𝒅 𝒓𝒂𝒕𝒆𝒔 𝒄𝒉𝒂𝒏𝒈𝒆, 𝒔𝒐 𝒑𝒍𝒆𝒂𝒔𝒆 𝒗𝒆𝒓𝒊𝒇𝒚 𝒄𝒖𝒓𝒓𝒆𝒏𝒕 𝒓𝒆𝒒𝒖𝒊𝒓𝒆𝒎𝒆𝒏𝒕𝒔 𝒘𝒊𝒕𝒉 𝒕𝒉𝒆 𝒓𝒆𝒍𝒆𝒗𝒂𝒏𝒕 𝒂𝒖𝒕𝒉𝒐𝒓𝒊𝒕𝒚 𝒐𝒓 𝒂 𝒒𝒖𝒂𝒍𝒊𝒇𝒊𝒆𝒅 𝒑𝒓𝒐𝒇𝒆𝒔𝒔𝒊𝒐𝒏𝒂𝒍 𝒃𝒆𝒇𝒐𝒓𝒆 𝒎𝒂𝒌𝒊𝒏𝒈 𝒅𝒆𝒄𝒊𝒔𝒊𝒐𝒏𝒔.

Source: www.linkedin.com/pulse/how-set-up-company-japan-what-really-costs-why-kk-gk-matters-anil-raj-4zmzc/