Q1. How to set up a company in Japan

A1. There are 2 types of companies under the Companies Act in which the liabilities of all members are limited: a Kabushiki Kaisha (KK) and a Godo Kaisha (GK). A KK company (often translated as a stock company) is a conventional type of company which is rather strictly regulated by the law while a GK company is a relatively new type of company which is less regulated. The following is a general description of how to establish a KK company.

In general, the following steps need to be taken:
(1) Decide the details of the company such as the company name, purpose of business, location of head office, structure of the company and matters relating to shares;
(2) Check whether the company name is available;
(3) Prepare the articles of incorporation of the company and have them notarized;
(4) Pay the issue price for the shares;
(5) Appoint the officers of the company (such as one or more directors); and
(6) File the application to register the company at the legal affairs bureau.

The simplest structure for a company is to have only one director (to be appointed by the shareholder(s)). This structure can be adopted if all shares in the company are subject to a restriction on transfer and if the company is not a Large Company (as defined under the Companies Act).

There is no minimum capital requirement. The share capital of a company can even be 1 yen.

The cost of establishing a company will depend on the amount of capital of the company. If the capital of the company is less than 20 million yen, the overall cost (including notarization fee and registration tax but excluding professional legal fees) will be approximately 250,000 yen.

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