Starting a Business · Japan
Starting a business in Japan: foreigner's guide (2026)
Japan shaded by its starting a business status
Japan permits 100% foreign ownership of companies and imposes no statutory minimum capital, so incorporating a subsidiary (typically a Kabushiki-Kaisha or Godo-Kaisha) is mechanically straightforward and takes roughly 2–8 weeks. However, the process involves notarization of articles, registration formalities and prior-notification screening for sensitive sectors, and — critically — a foreigner intending to live in Japan and run the business now faces a substantially tougher Business Manager visa (¥30 million capital and other conditions from October 2025), which makes the overall picture moderate rather than easy.
Key points
FEFTA states foreign investors are free to make inward direct investment; full foreign ownership of a Japanese company is permitted in most sectors. Restrictions apply only to designated 'sensitive' national-security sectors (prior notification to MOF via the Bank of Japan and a review/waiting period) and a few sector caps (e.g. NTT capped at 33.3%).
There is no legally required minimum capital to incorporate a Kabushiki-Kaisha (K.K.) or Godo-Kaisha (G.K.) under the Companies Act — even ¥1 is technically sufficient. Capital must be paid in to the incorporator/representative director's account before registration.
Decide company particulars and draft articles of incorporation; have the articles notarized by a Japanese notary (required for a K.K., not for a G.K.); pay in capital; then register establishment at the Legal Affairs Bureau (the application date is the date of establishment), which issues a registration certificate. Foreign incorporators must supply home-country affidavits/certificates of the parent's profile and signatures.
JETRO estimates about two months to establish a subsidiary after particulars are determined (a branch about one month); practitioners report the K.K. registration itself runs ~2–3 weeks. Setup costs total roughly ¥610,000 for a subsidiary (registration license tax for a K.K. is ¥150,000 or 0.7% of capital, whichever is higher).
By amended Ministry of Justice ordinance effective 16 October 2025, a foreign founder seeking the 'Business Manager' residence status must now meet a ¥30 million minimum capital (up sixfold from ¥5 million), employ at least one qualifying full-time employee, show three years' management experience or a master's degree, and demonstrate Japanese language proficiency. A three-year transition (to 16 Oct 2028) applies to existing holders.
Foreign companies typically enter via a representative office (no registration, no sales), a branch office (no separate legal personality), or a subsidiary (K.K. or the simpler/cheaper G.K.). The K.K. is the conventional, more credible form but costs more and requires notarized articles; the G.K. is faster and cheaper with no notarization.
Timeline - major decisions & events
Japan's Ministry of Justice promulgated an amended ordinance (effective Oct 16, 2025) raising the minimum capital for the Business Manager visa from ¥5 million to ¥30 million and adding Japanese-language, management-experience, and local-employment requirements—sharply raising the bar for foreign founders to base a company in Japan.
Morgan Lewis (reporting MOJ ordinance) ↗The Foreign Entrepreneur Promotion Project (Startup Visa) was rolled out nationwide under METI oversight, extending the preparatory residence period to as long as two years—up from the earlier six months—broadening access beyond designated zones like Tokyo and Fukuoka.
METI ↗The Cabinet-approved budget package set aside about ¥1 trillion to fund the Five-year Plan's startup measures, including R&D startup funds and acceleration programs—the financial backbone of the government's push to grow the ecosystem.
JETRO ↗The Kishida Cabinet adopted a five-year plan aiming for 100,000 startups, 100 unicorns, and a tenfold increase in startup investment (to ¥10 trillion) by FY2027, positioning startup creation as a centerpiece of the 'new capitalism' growth agenda.
Cabinet Secretariat ↗The Ministry of Justice's Legal Affairs Bureau began operating a system under which stock companies can register a verified beneficial-owner list, responding to FATF recommendations and adding a transparency/AML step to the corporate framework.
Ministry of Justice ↗Japan launched a Startup Visa allowing foreign entrepreneurs in designated special zones to obtain Business Manager residence status for six months without immediately meeting standard capital/office requirements, lowering the entry barrier for foreign-led startups.
JETRO ↗Part of Abe-era growth strategy, the Act created zones where regulations are relaxed and tax incentives offered to spur business creation—later the vehicle for the original Startup Visa and other deregulation affecting company formation.
Prime Minister's Office (Kantei) ↗The new Companies Act came into force, eliminating the minimum capital requirement (allowing incorporation with as little as ¥1) and introducing the flexible Godo Kaisha (LLC) form—dramatically lowering the legal threshold to form a company in Japan.
Japanese Law Translation (Ministry of Justice) ↗The Diet passed a unified Companies Act consolidating corporate provisions previously scattered across the Commercial Code and related laws, modernizing the legal foundation for establishing and governing companies in Japan.
WIPO Lex ↗Japan - other topics
Last verified 5/23/2026 · Orientation, not legal advice - verify against the primary sources linked above. Explore the full world map →