Japan quietly removed one of its biggest barriers to foreign incorporation: the Companies Act no longer requires a Japanese national to sit on your board, and non-residents can register a company with no visa and no Japanese address at all. Here's what it takes to start a business in Japan in 2026.
1. Which business structure fits you?
Before you register anything, it helps to know what you're actually choosing between.
- Kojin Jigyo (sole proprietorship). No capital required, mostly a matter of filling out a short form and submitting it to the tax office. Suits freelancers, consultants, and small operators.
- GK (Godo Kaisha). Japan's answer to an LLC, and the fastest, lowest-cost corporate structure. You can technically incorporate with just 1 yen in capital.
- KK (Kabushiki Kaisha). A joint-stock company, the structure you'll need if you plan to raise venture capital or eventually go public. Requires notarizing the Articles of Incorporation, which GK skips entirely.
2. Register your business
GK and KK both pay a Registration and License Tax at filing: 0.7% of capital for a KK with a JPY 150,000 minimum, and a flat JPY 60,000 minimum for a GK. KK also requires notarizing its Articles of Incorporation, roughly JPY 50,000. All-in setup costs generally run JPY 60,000 to 140,000 for a GK and JPY 180,000 to 330,000 for a KK, with GK typically ready in 1 to 2 weeks and KK taking 2 to 3 weeks. Branch offices, which aren't a separate legal entity, take 3 to 4 weeks and require at least one Japan-resident representative.
3. Understand the visa picture if you plan to move there
Registering a company doesn't require a visa, but running it in person from Japan does. The Business Manager Visa tightened significantly as of 16 October 2025: it now generally requires JPY 30 million in paid-in capital, full-time staffing, and a verified business plan. As of April 2026, only two municipalities offer a more flexible Startup Visa pathway that doesn't demand the full capital upfront, so check the current list of startup-friendly cities before assuming this route is available where you want to be based.
4. Check licenses and permits
Japan doesn't issue a single national business license. What you need depends on your industry; certain regulated activities carry their own permits on top of standard incorporation.
5. Understand Japanese taxes
Corporate tax is 23.2% at the national standard rate, reduced to 15% for SMEs (paid-in capital of JPY 100 million or less) on the first JPY 8 million of annual income. Watch for a new 4% Defense Special Corporate Tax surtax taking effect for fiscal years starting from April 2026, which can push the effective rate for larger companies as high as roughly 31.5% once combined with existing local tax components (local corporate tax, enterprise tax, and inhabitant tax on top of the national rate).
Consumption tax (JCT), Japan's VAT equivalent, is 10% standard, with an 8% reduced rate for certain food and beverages. You generally become taxable once sales exceed JPY 10 million in the relevant base period, and many new businesses get an exemption window in their early months. If you invoice Japanese B2B clients, registering as a qualified invoice issuer under the Qualified Invoice System matters for your clients to claim input tax credits on what they pay you.
6. Stay compliant
Annual tax returns are filed with financial statements and payroll documentation. Corporate taxation in Japan layers several components beyond the headline national rate, so budget for local corporate tax, enterprise tax, and inhabitant tax alongside it, not instead of it.
Japan business costs at a glance
| Item | Cost |
|---|---|
| Kojin Jigyo (sole proprietorship) | No capital required |
| GK formation, all-in | ~JPY 60,000 to 140,000 |
| KK formation, all-in | ~JPY 180,000 to 330,000 |
| Corporate tax, standard | 23.2% |
| Corporate tax, SME rate (first JPY 8M income) | 15% |
| Defense surtax (from FY2026) | +4% |
| Consumption tax (JCT), standard | 10% |
| Consumption tax registration threshold | JPY 10 million taxable sales |
Frequently asked questions
Does Japan require a resident director for a company?
No longer. The Companies Act no longer requires a Japanese national on your board, and non-residents can register with no visa and no Japanese address.
How much does it cost to form a GK in Japan?
All-in setup costs generally run JPY 60,000 to 140,000, with a JPY 60,000 minimum Registration and License Tax.
What's the corporate tax rate in Japan?
23.2% at the national standard rate, reduced to 15% for SMEs on the first JPY 8 million of annual income, with a new 4% Defense Special Corporate Tax surtax from fiscal years starting April 2026.
What changed about Japan's Business Manager Visa in 2025?
It tightened significantly as of 16 October 2025, generally requiring JPY 30 million in paid-in capital, full-time staffing, and a verified business plan.
What's the consumption tax (JCT) rate in Japan?
10% standard, with an 8% reduced rate for certain food and beverages.
Fees and rates above come from the Ministry of Justice, the National Tax Agency, and JETRO as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to a Japan-qualified accountant, tax scrivener, or lawyer about your specific situation.