How to Set Up and Incorporate a Company Limited (stock) Company for Foreigners

Company Incorporation Steps Required by Foreigners

Read to learn more about how foreigners can set up a Company Limited (Co., Ltd) stock company in Japan. Depending on the applicant’s situation, additional procedures may be required. Don’t hesitate to get in touch with us for more information for your personal situation.

If All Directors Reside in Japan

If all directors including the representative director reside in Japan, there is no need to exchange documents by international mail. Thus, the company incorporation procedure can proceed in a relatively short time and can be completed in around 2 weeks.

【Required Documents】

If there is an overseas resident among the directors

If any of the executives, including the representative director, resides overseas, it is necessary to exchange documents by international mail. International mail often takes several days to deliver, so it might take about a month to complete the incorporation of the company.

【Required documents】

■Step 1

Decide on the Basic Required Information of the Upcoming Company

When incorporating a company, it is necessary to decide on the company name (trade name), company address, business purpose, shareholders, the amount invested by the shareholders, the board of directors/representatives, etc. First and foremost, you must decide on the company address, so at this point, you must decide whether to rent an office or temporarily keep the company address at home.

■Step 2

Create the Articles of Incorporation

Prepare the “Articles of Incorporation”, which is the basic information and includes the basis of the corporation. Create a 4-5 page Articles of Incorporation in Word that includes the basic matters decided in Step 1. After the “Articles of Incorporation” is completed, proceed to Step 3. (Require help creating your Articles of Incorporation? Contact Samurai Immigration Law Firm to learn more!)

*How to prepare the Articles of Incorporation

The first step in incorporating a corporation is to prepare the Articles of Incorporation. The Articles of Incorporation is a document that stipulates important matters of the company, such as the company name, location, business purpose, amount of capital, composition of officers, and accounting period. Once the articles of incorporation are completed, they are notarized at a notary public office.

■Step 3

Notarize the Articles of Incorporation at a Notary Public Office

The Articles of Incorporation created in Step 2 are notarized at a notary public office. The Articles of Incorporation must go to a notary public office and be authenticated by a notary public. Our office supports administrative scrivener electronic articles of incorporation, and we will convert the articles of incorporation made in Word into PDF, apply an electronic signature, and send it to the notary public office. By using this method, the stamp tax, which was originally required to be 40,000 yen, will be waived. Typically, if you authenticate yourself, it will cost an additional 40,000 yen.

■Step 4

Transfer the Company Capital

At this stage, you transfer the company's capital. After the Articles of Incorporation have been authenticated at a notary public office, the capital must be transferred to the personal account of the director/founder/collaborator. Please pay attention to the date when transferring by overseas remittance. The bank account must be a personal Japanese bank account, or an account of a Japanese branch of an overseas bank is also acceptable. Therefore, if you do not have a bank account in Japan, it is practically impossible to establish a company by yourself. You cannot open a bank account even if you come to Japan as a short-term visitor (no visa). Therefore, a collaborator (a person who will temporarily become an officer) is required when incorporating a company. Our office will create a "payment certificate" in the transferer’s language.

■Step 5

Register Company with the Legal Affairs Bureau (Company Incorporation)

Our affiliated administrative lawyer will prepare a set of company registration application documents necessary for your incorporation registration, and register your company together with the company representative seal at the Legal Affairs Bureau. The date of registration will be the date of incorporation of the company. If there are no further amendments, you can obtain a "certificate of all registered matters (registration certified copy)" in about a week from the date of application for registration. Application for registration of a Company Limited company costs 150,000 yen, paid to the Legal Affairs Bureau, at this point of time.

■Step 6

Submit Various Notifications to the Tax Office

Applications are to be made to notify the various tax offices, such as "Notification of Incorporation of Corporation", "Notification of opening a salary payment office, etc." for the tax offices to be officially informed about your new company. A copy of the notification(s) made to the tax office is required as it must be submitted as part of the application when applying for a business manager visa.

■Step 7

Obtain Permits and Licenses *If Required

Suppose you want to run a business that requires a license, such as a secondhand dealer license, a duty-free shop, a recruitment agency, a travel agency, a real estate business, or a construction business. In that case, you must obtain the required license(s) before applying for a business manager visa.

■Step 8

Apply your Business Manager Visa @ Immigration Bureau

After preparing the visa application, business plan, and the other required certificates, you can then apply for a business manager visa to the Immigration Bureau. The business manager visa is done after everything is prepared, so there is little chance of failure.

■Step 9

Various notifications to the pension office, Hello Work, and the Labor Standards Inspection Office *Optional

We will carry out procedures that require various notifications based on laws and ordinances.

Company Name Rules

There are legal rules when choosing a company name. Even if the company name has been decided with much effort, it must be changed if it violates the law. But the rules are not that difficult. Please check the following four points.

The First Rule: Include the Word “Co., Ltd.” (abbreviation of Company Limited) in the Company Name

In the case of a Company Limited company, “Co., Ltd” must be included as part of your full company name. It can be before or after your trade name. For example, it could be Corporation Toyota or Toyota Corporation. You can choose the former or the later.

The Second Rule: Note the Restrictions of the Characters that can be Used

In general, you have to register your company name in Japanese – using Kanji, hiragana, and katakana as the “official” name, and any English naming is supplement information in the company name registration. Simplified Chinese characters, traditional Chinese characters, and Korean Hangul characters cannot be used.

How to Determine Business Purpose

When incorporating a company, it is necessary to stipulate the business purpose in the articles of incorporation. The business purpose stipulated in the Articles of Incorporation will also be stated in the company registration certificate.

There are certain rules for business purposes, such as “the purpose must be specific,” “clear,” and “legal.” Basically, it is sufficient to describe the purpose of the business that you intend to carry out immediately after the company’s incorporation. However, if there is a business that you plan to carry out in the future but will not carry out immediately, you may add it in as well. The advantage of doing this is that you save the registration and license tax of 30,000 yen for the amendment fee to the Legal Affairs Bureau. If you are going to do a licensed business, you will not be able to get the license unless you clearly describe and state it in the business purpose. For example, suppose you want to do a used car import/export business. In that case, you must set the business purpose as "secondhand dealer based on the Secondhand Articles Dealer Act" and "purchase, sale and import/export of secondhand cars.”

Restrictions on Share Transfer

Stock transfer restrictions are based on whether or not the company’s approval is required to transfer the [shares] of the company. If the company's shares can be freely transferred to others, the shareholders will change frequently, and strangers will become shareholders. To prevent this, it is possible to stipulate restrictions on the transfer of shares, and make it a rule that the approval of the company must be obtained when transferring shares. Large companies such as listed companies operate differently, but if you are a small company owned by a foreigner, it is recommended that you establish in advance the restrictions on the transfer of shares.

Actual Cost of Incorporating a Company Limited Company

The cost of incorporating a Company Limited company is 50,000 yen + 1,940 yen for the certified copy of the articles of incorporation (2 copies) when having the Articles of Incorporation notarized at a notary public office, and an additional 150,000 yen as a registration license tax at the Legal Affairs Bureau when applying for registration (or amount obtained by multiplying the amount of capital by 7/1000). In addition, revenue stamps of 40,000 yen will be charged if the articles of incorporation are prepared on paper. However, suppose you choose to use Samurai Immigration Law Firm’s service - In that case, you will be charged a separate company incorporation support fee, but the 40,000 yen will be exempted because the articles of incorporation will be prepared electronically.

Can a Foreigner Establish a Company in Japan without Coming to Japan?

To incorporate a Company Limited company in Japan, it is necessary to have the Articles of Incorporation notarized at a notary public office and submit an application for company incorporation registration to the legal affairs bureau in person. Therefore, unless there is a partner who can temporarily join the board of directors in Japan, it is realistically impossible to carry out the incorporation procedures without coming to Japan if it is a company with only one foreigner. If you have a collaborator in Japan, that person will require to move around a lot to prepare the company on your behalf, but it is possible. In addition, if you request our office, we will take care of all of the fundamental procedures for incorporating a company, so there are many cases where you do not need to come to Japan.

Documents to prepare for incorporation of a joint-stock company

Notifications Required after Incorporation

■ Tax Office

　1. Notification of Incorporation of a Company

　2. Notification of Establishment / Relocation /Discontinuance of Salary Paying Office etc.

　3. Application for Approval Made in Relation to the Special Provision for Due Dates for Withholding Income Tax

　4. Application Form for Blue Form Return

　5. Notification of Inventory Valuation Method

■ Prefectural Tax Offices and Municipal Offices

　1. Business Start Declaration Form

■ Pension office

　1. Notification of New Application

　2. Notification of New Applicable Office Status

　3. Notification of Acquisition of Eligibility as an InsureSd Person

　4. Health Insurance Dependent (Change) Notification

■ Labor Standards Inspection Office

　1. Notification of Incorporation of Insurance Relationship

　2. Estimated Insurance Premium Declaration Form

　3. Attachments

　4. Company Register

　5. Employee Directory

　6. Wage Ledgers (Salary Payslips)

　7. Attendance Records

■ Hello Work (Labor Office)

　1. Notification of Incorporation of Applicable Office

　2. Notification of Employment Insurance Qualification Acquisition

　3. Notification of Incorporation of Insurance Relationship

　4. Attachments

　5. Employment insurance certificate if the employee was previously insured under Employment Insurance

　6. Certified Copy of Company Register

　7. Employee Directory

　8. Wage Ledgers (Salary Payslips)

　9. Attendance record

　10. A copy of notification of incorporation of labor insurance relationship (with the receipt stamp of the Labor Standards Inspection Office)