Japan – Starting a Corp
Incorporating a company in Japan will is costly and will take longer than incorporating anywhere else in the world. Be prepared to spend at least a month getting the right documents together. The following is my experience setting up a Kabushiki Gaisha in Fukuoka, back in 2015. A Godo Gaisha, I assume, would follow similar steps as well, but I am by no means an incorporation lawyer or adviser and some of the figures may have changed since I went through it.
Incorporating a Kabushiki Gaisha
The entire incorporation procedure is divided into 2 main parts, both of which different ‘lawyers’ (Gyoseisho-shi 行政書士) are required. In other words, you have to pay 2 separate lawyer fees for each of the 2 steps. You also have the option to do either or both steps on your own, which I chose to do for the second part.
1. Teikan (定款)
Cost :￥60,000 on average
Step 1 is to make the ‘teikan’ aka ‘articles of incorporation’. This document defines everything about your business including the official company name (English and Japanese), beginning of the fiscal year, activities the company can engage in, investment capital, shareholders, shareholder information, company executives, number of shares issued, price of shares, AND MORE. In total, this document will be about 7 pages long, and will be submitted to the 公証役場 Koushou Yakuba.
It is important to be very specific when defining the business activities (目的 Mokuteki) as if you ever so happen to engage in an activity outside of what was written in this section you could get in trouble. The contents of the Teikan can be modified at a later date, but it costs ￥30,000 per change so it’s better to have it all together in the beginning and not waste money.
The activities listed also don’t need to be related. The company can be permitted to sell raw seafood and/or operate a hair salon, so I was advised to put down anything and everything I can think of.
A trick I learned from my lawyer was to include the following ‘activity’ when listing business activities in the Mokuteki section, which is a vague statement that allows you to engage in pretty much any activity.
Using a lawyer
In most cases, it is easier to hire a Gyoseisho-shi ‘lawyer’ to draft the Teikan described above. Most local Gyoseisho-shi will charge a ballpark figure of ￥60,000 to create AND submit the Teikan. If you use an international or English-speaking lawyer, expect to spend up to double that amount.
You would also be required to sign an additional release document allowing the lawyer to act on your behalf, called an ‘Ininjyo’ (委任状).
Doing it yourself
It is certainly possible to find a Teikan template, or use a friend’s, and change the figures, information, and names to use it for a new company. However, for reasons none other than to confuse the entrepreneur, the Koushou Yakuba charges a fee of ￥50,000 to submit your Teikan by paper. They waive that fee if you can submit it ‘electronically’, but this does not mean via email. They use a special chip reader (wtf?) to receive your Teikan, which the average person does not have. Gyoseisho-shi ‘lawyers’ do have this special machine, and thus is free for them to submit your Teikan, so in the end, it is probably more convenient to have the Gyoseisho-shi draft your Teikan for you from the beginning (￥10,000 difference in cost).
Note: I learned that if you make the Teikan yourself and take it to the Gyoseisho-shi to ONLY submit it for you, he will charge half price to do that (around ￥30,000), which is the cheapest option if you are confident that you can create a Teikan on your own. This again is my personal experience, so the exact figure amount may vary depending on the lawyer and jurisdiction.
2. Registering The Company
Cost: ￥170,000-200,000 (without lawyer), ￥250,000+ (with lawyer)
Company stamp ￥12,000
Company registration ￥150,000
Notarization fees/Koushou Yakuba Fees ￥10,000
+Transportation costs (going to and from Houmukyoku法務局) & other stationary
After submitting your Teikan you will get a reply from the Koushou Yakuba within a few days with approval. Then begins the long process of the actual company registration. At this point, the lawyer that helped you with the Teikan may refer you to a different Gyoseisho-shi or Shihousho-shi 司法書士(pretty much the same thing) to do this step. Or you may choose to do it yourself, which is actually not that much more difficult, and you would save quite a bit in lawyer fees.
- The first step is to get all the shareholders/executives listed in the Teikan to ‘approve’ the Teikan. You do so by putting your stamp (Inkan) in between every page, or if you registered your signature instead of a stamp use that. If you are a foreigner with no residence status in Japan, you do the above PLUS get your signature notarized at an embassy.
The next thing to do, which could actually be done any time before or after, is to buy a company stamp. There are many ‘stamp shops’ around any developed area in Japan that this can be bought from. The company stamps come in a set of 2, a round ‘bank’ stamp, and the square ‘company’ stamp. The bank stamp is used for bank documents (obviously). The cost starts at around ￥12,000 for something simple but can get pretty damn expensive depending on how nice of a stamp you want.NOTE: Only one person can be registered to the company stamp. This means that if you are not the person registered to use the company stamp, you cannot sign documents/contracts using your name + the company stamp, so it is best that the person in charge of operating the company be assigned to the stamp. What is the point of this rule? I have no idea.
Dealing with the bank
This can also be done at any time. Go to the bank and open a new personal chequing account (普通口座). The business is technically not registered yet, so you cannot open a business bank account. Into the new account, deposit the funds according to what is defined in the Teikan. That means that if you agreed to invest XX amount and your other partner was to invest XX amount, every investor/shareholder must transfer that stated amount into this new account. Once that is complete, use your bank log book (通帳 Tsuchou) to record those transactions of the funds being deposited and the dates. Take a photocopy and keep it for later. You will need it as proof of investment during registration. Make sure that each person transfers the funds from their personal bank account as their name will be recorded in your bank log book, which is one of the most important parts (no cash deposits).*You can do all your printing and photocopying at 7-11 convenience stores.
Getting the documents together
This is perhaps the most time consuming part of the registration process. There is a list of documents you must put together to file for your application. Your lawyer should help you sort this out but if you do this on your own the gents over at the Registration office (法務局 Houmukoyku) will help you out for free. Every Registration office has a self-help section of staff whose role is to help you sort through all this. They will tell you what documents you are missing, what you need to fix, how you need to write something, etc. You should be able to get free templates for the documents listed below from either your lawyer or the Registration office. Those documents are as follows:
Cover page/table of contents. It describes what is included in this ‘package’, aka the following docs below. It is also where your ￥150,000 Registration Stamp will be pasted.
Teikan – from step 1, you should have this, signed/stamped by everyone.
Minutes of the Shareholder Meeting – Opens stating all shareholders had a meeting at XX time and date (You don’t actually have to do this). The ‘contents’ of the meeting are exactly the same thing written on the Teikan. (Business activities, address, company name, executives, shares issued, etc.)
印鑑証明書 or サイン証明書
Stamp certificate – You should have this if you have your personal stamp registered. If not, pick one up at the District Office (区役所 Kuyaku Sho) or register your stamp at the District Office to get one (its about ￥700 or so, I can’t remember).
If you don’t have a stamp, get a ‘Sign’ Certificate from your country’s embassy in Japan. The folks over at the embassy will literally have you sign a piece of paper and write next to it ‘I saw with my own eyes, this guy sign this sheet’ in slightly fancier language, then take about ￥4,000 from you.
The photocopy of the transactions from your bank log book taken earlier to this sheet. You will also need to attach another short document that states who invested what amount.
Appointed Executives – states the appointed executives at the point of incorporation.
Proof of investment – states the amount each person invested
Most of the above documents will consist of pretty much the exact same thing but don’t let that agitate you. You will be used to signing the same thing over and over by the time you are done.
Last but not least, head over to the Registration office (法務局 Houmukyoku), pay the gent on the other side of the counter ￥150,000 for the paper stamp, stick it on the top document, and submit it at the next counter. Congratulations, the company is now registered. Now go open a company bank account, and apply for a business visa.