weConnect Resources

Key Establishment Considerations for the Japanese Market

Through the years we have developed some key points we like to share with our clients for them to keep in mind when they are beginning to consider setting up an entity in Japan. Please see the points below and let us know if you would like to discus further.

  • You will need a registered address for the incorporation.
  • If you will invoice Japanese customers from your Japan entity you may want to consider structuring your business in Japan as exempt from Japanese consumption tax. This will enable businesses which will be profitable quickly to realize an uplift of revenue by recognizing consumption tax received as additional revenue. The first step is to ensure initial capital is less than JPY 10,000,000.
  • It can be beneficial to have a resident director for smooth setup with banks, signing visa applications for expatriates coming from abroad, and making your business look as domestic as possible if that works strategically for your brand.
  • However, it may be beneficial to avoid electing a Japanese employee as a Director, as their compensation may need to be paid in fixed monthly increments to be a tax-deductible expense for the company, and if they are using company housing only 50% of the housing amount can be recognized as tax-free compared to 90% for non-Directors.
  • If you will need to get your staff a visa, we recommend setting your initial capital to at least JPY 5,000,000 and if you need to get your first employee in Japan a visa you will need someone to sign the visa application. If there is no employee or contractor locally, we can become your resident director and sign the visa application on your company’s behalf.
  • Separate seals for legal, banking and HR functions allows maximum administrative efficiency for company in Japan.
  • Managing your back office compliance with one provider can avoid frustration, repeating explanations of your business and allow you to focus on building your business in Japan.

Key Takeaways

weConnect offers decades of experience to help companies set up optimally in Japan.

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