Japan

About the Country

Japan is located in the Pacific Ocean, it lies off the eastern coast of the Asian mainland, and stretches from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the southwest – is a sovereign island nation in East Asia. The below content will explain you in detail about the requirements for company formation in Japan, know more about the process of trademark registration in Japan and understand the Japan Legal Compliance requirements.

Japan

Doing Business Introduction

Japan Economy is bigger than the UK and Germany – and considered to be world third largest and spend the highest on the research and development (R&D) worldwide. The Foreign Investor can reap long-term financial and strategic benefits in Japan.

As per the Doing Business Report of The World Bank, Japan ranks 34th in the 2017 survey. YourGlobalPro professionals are able to assist with any type of company formation, trademark registration and other recurring services for your business in Japan.

Incorporation - Types of Business Entities

There are different types of entities that can be incorporated in Japan are as mentioned below:

  • Representative office
  • Branch office
  • A family Company
  • Partnerships
  • Subsidiary company
  • Joint-stock corporation (Kabushiki-Kaisha (K.K.)),
  • Limited liability company (Godo-Kaisha),

Time Frame for Incorporation of Company in Japan varies from depending on the type of entity selected. Each business type has its own advantages and disadvantages. YourGlobalPro estimates the time required for the process of Company formation in Japan to be completed is 15-18 working days.

Benefits of Registration of a Company

Japan is already the largest economy in Southeast Asia. Below are the advantages of company formation in Japan:

  • It is Stable place to do business.
  • It is Stepping stone for the Asian Markets
  • Highly educated, large and rich consumer
  • Strong political, trade and social tie with many countries
  • Have a huge, open economy and edge cutting business culture
  • Intellectual property (IP) gets strong protection
  • High levels of disposable income

Tax Registration and Filing

In Japan, tax year is basically the April to March. The Resident Company incorporated or domiciled is subject to income tax on worldwide income however but nonresident companies pay taxes only on Japanese-source income.

Corporate Income Tax Rate 23.9 %
Capital Gains Tax Rate 23.9 %
Branch Tax Rate 23.9%
Dividends 20 %
Interest Interest paid to residents on bonds, debentures or bank deposits: 20 % Interest paid to nonresidents on bonds, debentures or bank deposits 15%
Royalties 20 %
Branch Remittance Tax 20%
Filing Tax Return and Payment Within two months of the end of its fiscal year and paying the tax at that time.
Consolidated Tax Return System (CTRS) Applies to a domestic parent corporation and its 100% domestic subsidiaries

Double Tax Treaty

Double Tax Agreements regulates the tax treatment of income or capital gains in situations where the same taxpayer is taxed twice in two countries for the same subject. Japan has double taxation treaties with countries as mentioned below: Australia, Austria, Bahamas, Bermuda, Bangladesh, Belarus, Belgium, Brazil, BVI, Brunei, Bulgaria, Canada, Cayman Islands, China, Czech Republic, Denmark, Egypt, Finland, France, Germany, Guernsey, Hong Kong, Hungary, India, Indonesia, Ireland, Isle of Man, Israel, Italy, Kazakhstan, Kyrgyzstan, Luxembourg, Kuwait, Lichtenstein, Mexico, Macao, Malaysia, Norway, Netherlands, New Zealand, Philippines, Oman, Pakistan, Romania, Poland, Portugal, Saudi Arabia, Russia, Samoa, Spain, Singapore, South Africa, Switzerland, Sri Lanka, Sweden, Turkmenistan, Thailand, Turkey, Ukraine, UAE, UK, Zambia, USA, Vietnam

Trademark registration

For trademark registration in Japan, an application needs to be made to Japan Patent Office. It takes approximately 6-8 months’ timeframe to complete the trade mark registration process.  A Trademark Registration in Japan is valid for 10 years from the application date and can be renewed six months before the trademark right expires by payment of renewal fees for 10 years.

YourGlobalPro professionals are fully equipped to assist you with the process of trademark registration in Japan for your business in Japan. For assistance or advise in the matter of the trade mark registration or intellectual property – please feel free to write or contact us.

Secretarial Compliance

Below are some of the important points in relation to Company Secretarial Compliance in Japan:

  • All companies must have registered office
  • No minimum capital requirement for a new joint-stock company or limited liability company
  • all types of joint-stock company to have a shareholders’ meeting and at least one director who is basically in charge of the operation of the business affairs of the corporation
  • In case of limited liability company fundamental matters like the amendment of articles of incorporation, conversion, mergers must be determined by the consent of all members
  • The Branch are required that balance sheet must be disclosed by public notice in Japan at the end of each financial year
  • Financial statements of corporations to be approved by the shareholders within 3 months from the financial year end.
  • Listed companies to file the audited financial statements to the Financial Service Agency (“FSA”) within 3 months from the financial year end and publish on the internet through Electronic Disclosure for Investors’ Network system

Accounting Services

Most of the entities use the April to March calendar year as their accounting year and all accounting books, records and financial statements should be prepared using the Japanese language. In Japan, all the corporate entities required to prepare Financial Statement. The Listed Companies in Japan voluntarily adopt IFRS Standards.

YourGlobalPro professionals can assist you with the entire bookkeeping and accounting services for your Japan Business Set up as per your business needs including implementation of financial accounting software, accounting records preparation and time to time preparation of budgets, forecasts.

Auditing service

In Japan, all company and Limited Liability Partnerships (“LLPs”) are required to prepare annual financial statements -however not all corporations and entities are required to have a statutory audit except one full fill the conditions mentioned specifically in Financial Instruments and Exchange Act, Companies Act and the Act on Securitization of Assets.

Based on the size of the business – the companies are required to prepare and file financial statements with the Authority. YourGlobalPro professionals can provide you auditing services for your business as required by your business.

Banking

The Bank of Japan controls inbound and outbound investments and transfers of money in Japan. The documentation requirement differs from Bank to Bank and need to be complied for the Bank account opening.

The major banks in Japan are Bank of Tokyo-Mitsubishi, Citibank Japan, Dai-Ichi Kangyo Bank, Daiwa Bank, Fuji Bank, Sakura Bank, Sanwa Bank, Sumitomo Bank, Akita Bank, Tokai Bank, Aomori Bank, Bank of Saga, Bank of Yokohama, Chiba Bank, Chugoku Bank, Shikoku Bank, Sumitomo Trust and Banking, Yasuda Trust and Banking, Industrial Bank of Japan, Shinsei Bank, Chase Manhattan Bank, PLC, UBS AG, National Westminster Bank. All banks are stable, reliable and offer the same level of services.

YourGlobalPro professionals can facilitate all the paper work in relation to banking need and can assist you in opening bank account for your business plan in Japan.

Legal and Compliance

The responsibility of Japan legal and compliance is not a one-time affair, but a continuous process. Below is the various Japan legal and compliance requirement to be followed by incorporated entities:

  • The Companies are required to create work rules and file them with the local Labor Standards Inspection Office
  • All corporation to file their tax returns to the National Tax Agency (“NTA”) within 2 months from the financial year end
  • YourGlobalPro professionals can assist you on Japan Legal and Compliance requirements.

HR and Employment Law and Immigration / VISA

Below are some of the important points in relation to HR & employment law in Japan:

  • Foreign national wishing to enter Japan must have a valid passport and must contain a visa corresponding to his/her purpose of entry into Japan obtained in advance from a Japanese embassy
  • Visa requirement does not apply to entry by nationals of countries with which Japan has reciprocal visa exemption
  • Resident cards are cards issued to foreign nationals residing legally in Japan
  • Labour law are employee-friendly in order to provide for a long and positive relationship
  • written employment contract required
  • Work hour is eight hours per day and 40 hours per week
  • Employment relationship is established, from the date of Formal offer
  • Probationary period normally ranges from one to six months
  • Term employment contracts cannot be longer than three years
  • Employer is not required to grant paid leave to an employee who is absent from work
  • Pregnant employee is entitled to maternity leave for a period of six weeks
  • No legal requirement that employers provide a retirement allowance

Country Statistics

Capital Tokyo
Largest City Tokyo
Total Area 377,972 Sq. Km.
Population 126,730,000
Density 336 / Sq. Km.
Currency Yen (u00a5) / En u5186 (JPY)
Government Unitary Parliamentary Constitutional Monarchy
Official Language Japanese
Religion Shinto: 51.82% Buddhism: 34.9% Shinto sects: 4% Christianity: 2.3% No answer: 6.98%
Government Offices Hours Mondays to Fridays u2013 10:00 u2013 17:00 Saturdays from 10:00 to 12:00
Business Offices Hours Mondays to Fridays - 09:00 - 17:00 hrs Saturdays - 09:00 hrs. to 12.30 hrs
Banks and Exchange Houses Hours Mondays u2013 Fridays u2013 9:00 u2013 15:00

Get a FREE Quote for Company formation in this country

Download this Country Factsheet