The Real Cost of Starting a Business in Japan in 2026

The cost of starting a business in Japan runs from ¥0 to about ¥250,000 in government fees. A sole proprietorship is free to register. A joint stock company (KK) costs the most, at about ¥170,000 to ¥250,000. A limited liability company (GK) costs about ¥60,000 to ¥100,000.

This guide breaks down company incorporation fees, corporate tax, and running costs for each business structure. It covers a joint stock company, a limited liability company, a branch office, a representative office, and a sole proprietorship.

New to setting up in Japan? Start with our overview of starting a company in Japan.

Quick answer: Total estimated cost of starting a business in Japan (Year 1)

Here is the short answer, by business structure.

USD figures use $1 = ¥158 (October 2, 2026).

What recurring costs include: bookkeeping and accounting (¥300,000–¥800,000 a year), a virtual or physical office address, company seal storage, and annual filings. Office rent, payroll, and scrivener fees for setup (¥100,000–¥300,000) come on top.

Note: These figures reflect a small foreign-owned business in Tokyo. Your industry, headcount, and office setup change the total. See "Ongoing costs after setup" below for the full list.

For a full breakdown of each structure, continue reading below.

Choosing a suitable business structure

Japan has five main business structures:

• Kabushiki Kaisha or KK (joint stock company)

• Godo Kaisha or GK (limited liability company)

• Branch office

• Representative office (駐在員事務所 Chuzai-in Jimusho)

• Sole proprietorship (個人事業 kojin jigyo)

Japan also has a limited liability partnership (LLP). It is not a legal entity, so foreign founders rarely use it.

1. Kabushiki Kaisha or KK (stock company)

A Kabushiki Kaisha (KK) is a joint stock company. It suits businesses that want to raise capital, build credibility, or issue shares. Large companies and foreign firms expanding into Japan usually choose it.

• Advantages: banks and investors recognize it, it can issue shares, and its governance is strong.

• Disadvantages: higher setup cost, shareholder meetings and director terms, and notarized articles of incorporation.

2. Godo Kaisha or GK (limited liability company)

A Godo Kaisha (GK) is a limited liability company, the Japanese equivalent of a US LLC. Small businesses, startups, and single-owner subsidiaries often choose it for its low cost.

• Advantages: low cost, light compliance, and flexible profit sharing among the owner and other partners. A US parent can own it fully, and US tax law may treat it as pass-through.

• Disadvantages: less prestige in Japan, no share issuance, and some banks and investors prefer a KK.

👉Read also: Godo Kaisha vs Kabushiki Kaisha: Company Types in Japan

3. Branch Office

A branch office lets a foreign company do business in Japan without forming a separate legal entity. It is faster and cheaper to set up than a KK or GK. The foreign head office carries full liability for it.

A branch suits foreign companies testing the market before full incorporation.

• Advantages: no incorporation or capital investment needed. It can hire staff, sign contracts, and make domestic transactions.

• Disadvantages: the parent bears full liability and cannot raise funds in Japan. It must appoint a representative in Japan, and at least one must live in Japan.

4. Representative Office (駐在員事務所 Chuzai-in Jimusho)

A representative office gives a foreign company a presence in Japan without a legal entity. It cannot carry out commercial business activities. It suits market research, PR, and liaison work.

• Advantages: free to set up, with no registration or capital. It pays no corporate tax and can hire staff for non-sales roles.

• Disadvantages: it cannot sell, sign contracts, make domestic transactions, or open a corporate bank account. Hiring staff may still trigger social insurance.

5. Sole proprietorship (個人事業 kojin jigyo)

A sole proprietorship is the cheapest way to start a business in Japan. You file a free business opening notice with the tax office, with no registration tax. It is not a separate legal entity, so the owner is personally liable for business debts.

It suits foreign residents whose visa allows business activities, such as permanent residents. Read our full guide to sole proprietorship in Japan (kojin jigyo).

• Advantages: ¥0 setup, simple tax returns, and no corporate tax.

• Disadvantages: unlimited liability, lower credibility, and rising income tax as profits grow.

Comparison chart of different business structures

Which type of business structure should I choose?

Your business structure shapes your initial capital, company registration process, tax, and hiring. Use this table to find a suitable business structure.

👉Read also: Franchise Opportunities in Japan: Guide to Business Success

Initial costs and capital investment

Here are the typical start up costs and fees.

Establishing a Kabushiki Kaisha (KK)

• Revenue stamp fee: ¥40,000 for paper articles of incorporation. Electronic articles need no stamp.

• Notary fee for the articles of incorporation:

  • ¥15,000: capital under ¥1M, up to 3 individual founders, no board of directors

  • ¥30,000: capital under ¥1M, all other cases

  • ¥40,000: capital of ¥1M to under ¥3M

  • ¥50,000: capital of ¥3M or more

• Certified copy fee: about ¥2,000 (¥250 per page)

• Registration license tax: ¥150,000, or 0.7% of capital if higher

= Establishment cost total: about ¥170,000 (electronic filing) to about ¥250,000 (paper filing)

• Company seal: about ¥5,000 to ¥20,000 for a set, usually a round representative seal and a square seal

• Office setup (serviced office, virtual office, or leased space):

  • Security deposit: 6 to 12 months of rent for a leased office. A one-person serviced office costs about ¥30,000–¥100,000 a month.

  • Monthly rent: varies by city, often ¥200,000+ in Tokyo

• Minimum capital: ¥1 under the Companies Act. See "Capital and the Business Manager visa" below.

Establishing a Godo Kaisha (GK)

• Revenue stamp fee: ¥40,000 for paper articles of incorporation. Electronic articles need no stamp.

• Notary fee: none. A GK's articles need no notarization.

• Registration license tax: ¥60,000, or 0.7% of capital if higher

= Establishment cost total: about ¥60,000 (electronic filing) to about ¥100,000 (paper filing)

• Company seal: about ¥5,000 to ¥20,000

• Office setup: the same as a KK

• Minimum capital: ¥1. See "Capital and the Business Manager visa" below.

Establishing a branch office

• Registration license tax: ¥90,000 to register a branch office, or ¥60,000 to register only a representative in Japan

• Translation fee: ¥20,000–¥50,000+ for documents from the head office

• Certificates and copies: about ¥2,000

= Establishment cost total: about ¥112,000 to ¥142,000. Registering only a representative costs about ¥30,000 less.

• Company seal: about ¥5,000 to ¥20,000

• Office setup: the same as a KK

Notes on the branch office:

• You file no articles of incorporation. Instead, you translate and submit the head office's documents.

• A branch creates no legal entity in Japan, so the parent company is liable.

• You must appoint a representative in Japan, and at least one must live in Japan.

Capital and the Business Manager visa

The Companies Act sets no minimum capital, so ¥1 is enough to register. The Business Manager visa is different. Since October 16, 2025, it requires at least ¥30 million in capital investment, plus one full-time employee and Japanese at B2 level.

Large capital also raises your costs. With ¥10 million or more, your company owes consumption tax from its first fiscal year. Above ¥10 million, the minimum per-capita inhabitant tax in Tokyo's 23 wards rises from ¥70,000 to ¥180,000 a year.

If you do not need the visa, capital under ¥10 million avoids both costs. Ask a tax accountant before you set the amount.

Establishing a representative office

A representative office needs no registration, articles of incorporation, or tax office notice. It costs nothing to set up.

It cannot sell, sign contracts, or open a corporate bank account. Its business activities are limited to non-commercial work such as market research.

Use a virtual office to reduce the startup costs

💡 You can use a virtual office address for incorporation, branch office registration, and a representative office. It saves the security deposit and monthly rent of a leased office.

MailMate's virtual office and virtual mail services are bilingual services for foreign entrepreneurs starting a business in Japan.

• Virtual office service: register your business at a premium address with MailMate. Choose Shinjuku or Minato in Tokyo, or Hakata or Tenjin in Fukuoka.

• Japanese phone number with a bilingual receptionist: MailMate answers your calls and relays each message to you.

• Virtual mail service: MailMate scans your business mail to your dashboard. You can read it, forward it, or request a translation.

• Bill payment service: MailMate pays your bills at a convenience store, so you never miss a payment.

MailMate also helps entrepreneurs start companies in Japan.

👉Read also: Are Virtual Offices Legal? 9 Industries That Can’t Use Them

Required Documents and Registration Process

Here are the important documents required and the process.

For KK and GK company formation

1. Choose your office location.

2. Order a company seal.

3. Draft the articles of incorporation.

4. For a KK, have a notary certify the articles. Bring ID and seal registration certificates for all incorporators, a personal seal, and the notary fee. A GK skips this step.

5. Deposit the capital into a founder's account at a Japanese bank, a foreign bank's Japan branch, or a Japanese bank's overseas branch.

6. File the Application for Registration of Incorporation (登記申請書) at the Legal Affairs Bureau. Attach the articles, proof of the capital deposit, director acceptance letters, and the seal notification.

👉Read more in detail about company formation: The Total Guide to Company Formation in Japan

For registering a branch office

1. Choose an office and a representative in Japan. The representative can be a Japanese national or a foreign national, and at least one must have an address in Japan.

2. Check that the trade name is available and suitable.

3. Prepare the necessary documents: proof that the head office exists, the representative's appointment, and the head office's articles. Most companies combine these into one affidavit and translate it.

4. Have the affidavit notarized at an embassy or consulate of the head office's country.

5. File everything at the Legal Affairs Bureau for the branch location, with the representative's seal certificate and the company seal.

For setting up a representative office

1. Appoint a representative. A foreign national usually needs an Intra-Company Transferee or Engineer/Specialist in Humanities/International Services visa.

2. Choose an office. The representative signs the lease in their own name, because the office is not a legal entity.

3. Apply for visas for any foreign staff.

Ongoing costs after setup

Setup fees are a one-time cost. Running costs continue every fiscal year, even when your company makes no profit. Budget for these from day one:

• Per-capita inhabitant tax: at least ¥70,000 a year in Tokyo's 23 wards, or ¥180,000 with capital above ¥10 million. A company pays it even at a loss.

• Social insurance: every company must enroll in health insurance and employees' pension, even with one paid director. The company pays half of each premium. Pension alone is 18.3% of salary, split 50/50.

• Accounting and tax returns: a tax accountant typically charges ¥300,000–¥800,000 a year. See our list of bilingual accounting firms in Tokyo.

• Bookkeeping: Japan requires electronic records for digital invoices and receipts. See our guide to Japan's Electronic Bookkeeping Act.

• Office: a virtual office costs far less than a serviced office or a lease.

• Payroll and hiring: salaries, payroll processing, and recruiting agency fees if you use one.

• Bank account: monthly fees for a corporate bank account and online banking.

• Registry updates: a KK must re-register its directors when their terms end, which costs registration tax.

Post-Incorporation/Registration Costs and Obligations

After the KK/GK incorporation or registration of the branch office, some things need to be handled.

After KK/GK incorporation and branch office registration

1. Notify/file at the tax office

   • Notification of Incorporation

   • Notification on the Establishment of a Salary-Paying Office

   • Application for Filing the Blue Return

   • Application for Special Approval Concerning Payment Date of Income Tax Withheld at the Source

2. Notify/file at a Labor Standards Inspection Office

   • Notice of Establishment of Labor Insurance Affiliation

   • Tax Return for Estimated Insurance Premium for Labor Insurance

3. Notify/file at a Japan Pension Service Office

   • Notification of New Application for Health Insurance and Employee's Pension

   • Notification of the Acquisition of Eligibility for Health Insurance and Employee's Pension

   • Notification of Dependents Eligible for Health Insurance

4. Notify/file at a Public Employment Security Office

   • Notice of Establishment of a Workplace Covered by Employment Insurance

   • Notice of Acquisition of Eligibility for Employment Insurance

Corporate tax rate

Japan taxes company profits in six layers. The table shows statutory rates for a company with capital of ¥100 million or less. See our full guide to corporate tax in Japan.

Source: Overview of corporate income taxes | JETRO

Source: YG Tax , Money Forward

Example: taxable income is 10 million yen / total amount tax is 2,626,400 yen

Add the per-capita inhabitant tax on top: ¥70,000 in Tokyo's 23 wards for capital of ¥10 million or less. That brings the total to ¥2,696,400. These are statutory rates, so the real bill comes out slightly lower.

Source: Overview of corporate income taxes | JETRO

Consumption tax: 10% (8% reduced rate). A new company with capital under ¥10 million is usually exempt for its first two fiscal years. Capital of ¥10 million or more, or invoice registration, makes it taxable from year one. See our consumption tax guide.

If both sales and salary exceed ¥10 million in the first six months, the company becomes taxable in year two.

Tax returns: file once a year with your financial statements, within two months of your fiscal year end. See how Japan's fiscal year works.

Employment: prepare employment contracts and set working hours before your first hire.

Note: A branch office in Japan is generally taxed in the same way as a KK or GK, but only for income earned in Japan. Tax will be filed under the foreign company's name.

👉 If you feel overwhelmed, working with a local partner like AQ Partners can save you a lot of time and hassle.

They support foreign companies with the practical side of setting up and running a business, including:

• Company setup support: Help with incorporation and business registration in Japan

• Accounting & tax management: Bookkeeping, tax filing, and compliance taken care of

• Payroll services: Handling salaries, social insurance, and employee admin

• English-language support: Clear communication without language barriers

• End-to-end back-office support: So you can focus on growing your business, not paperwork

They act as an extension of your team, with strong local knowledge. That makes it easier to get your business in Japan up and running.

Read also: Japan’s Tax Regulations: 6 Pointers for Startups

Frequently Asked Questions (FAQ)

How much does it cost to start a business in Japan?

Government fees run from ¥0 for a sole proprietorship to about ¥170,000–¥250,000 for a joint stock company (KK). A limited liability company (GK) costs about ¥60,000–¥100,000, and a branch office about ¥112,000–¥142,000. A representative office is free but cannot sell. Year-one running costs add roughly ¥100,000 to ¥1,500,000.

How much does it cost to start a business in Japan in US dollars?

At $1 = ¥158 (October 2026), KK government fees come to about $1,100–$1,600. A GK costs about $380–$630, and a branch office about $710–$900. Year-one totals range from about $630 for a representative office to $11,100 or more for a KK.

Which business structure is best for foreign entrepreneurs in Japan?

It depends on your goals. A KK suits founders who want credibility or plan to raise capital. A GK suits small businesses and subsidiaries that want low costs and flexibility. A branch office suits foreign companies testing the market, and a sole proprietorship suits residents starting alone.

Can a foreigner own and run a company in Japan?

Yes. A foreign national or foreign company can own 100% of a KK or GK. Since March 2015, a KK can register even if every representative director lives abroad. A branch office is different: at least one of its representatives in Japan must live in Japan.

What is the minimum capital required to start a company in Japan?

The Companies Act sets no minimum, so ¥1 is enough to register. The Business Manager visa requires at least ¥30 million in capital investment. Capital of ¥10 million or more makes a new company owe consumption tax from year one. Capital above ¥10 million also raises the minimum per-capita tax in Tokyo from ¥70,000 to ¥180,000.

What taxes does a company pay in Japan?

A company pays corporate tax, local corporate tax, prefectural and municipal inhabitant taxes, enterprise tax, and special corporate enterprise tax. The effective rate is about 21.4% on income up to ¥4 million and about 33.6% above ¥8 million. It also pays a per-capita inhabitant tax every year, even at a loss. Consumption tax of 10% applies once the company becomes taxable.

Do I need a Japanese business address to incorporate a company?

Yes. A KK, GK, or branch office must register an office address in Japan. A virtual office address works for most business types. Services like MailMate offer registered addresses in Shinjuku, Minato, and Fukuoka.

How long does it take to register a company in Japan?

A GK typically takes 1 to 2 weeks, a KK 2 to 3 weeks, and a branch office 3 to 4 weeks. A KK takes longer because a notary must first certify its articles of incorporation. Most delays come from incomplete documents or seal registration errors.

Can I use a virtual office to register a company in Japan?

Yes. A virtual office address is accepted for most company registrations, including a KK, GK, or branch office. Some licensed industries, such as financial services and law firms, need a dedicated physical office.

In closing

Japan remains a stable gateway to Asian markets for foreign direct investment. Start-up costs can be significant, but the company registration process is transparent. You also gain access to a skilled workforce and a large domestic market.

Whether you form a limited liability company, a joint stock company, or a branch office, plan for both setup fees and running costs. For help with registration, consider MailMate's services for incorporation.

👉 Read also: The Total Guide to Company Formation in Japan

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