FAQs for Incorporation
1. How much initial capital at least do we have to contribute?
Your initial capital contribution can start from JPY one (1) in principle.
In the case where you would like to obtain an investor/business manager VISA, you need to contribute JPY five (5) million on a per capita basis at least, although you may not need to if your company hires two (2) or more full-time employees. And, if your company obtains government approvals and licenses, other rules may apply.
2. We are not sure how much initial capital we should contribute.
Capital is basically contributed in accordance with scale of a company’s business and its situation since capital is seed money for a company to start its business. If there are restrictions by laws and regulations such as in Q1, the amount of capital has to meet these restrictions and regulations.
In cases where a company’s initial capital is JPY ten (10) million or more, its tax burden such as the rate of corporate tax may be higher and the company is imposed consumption tax from first fiscal year. You may consider it if you would like to keep your tax amount as small as possible. We suggest you ask a tax accountant for details. We can introduce you an English-speaking tax accountant.
3. How will an initial capital be contributed?
In the case of K.K., promoter(s) have to contribute an initial capital to one of the promoter’s bank account in Japan in principle. If you contribute properties such as real estate etc., there are other procedures.
In the case of G.K., the procedures to contribute initial capital are not restricted.
4. We do not have any bank account in Japan. What should we do?
We have the following methods.
(1) You ask someone with a bank account in Japan to perform as a promoter and contribute an initial capital to his/her bank account.
(2) If a representative director has a bank account in Japan, you can delegate him/her to receive an initial capital and contribute it to his/her bank account.
(3) We ask a bank in Japan to open a “separate deposit account” and you contribute an initial capital to the account. It is the safest method since a bank handles your contribution. However, this method is seldom used as it takes more time and cost.
The result is the same, however, the simplest and easiest method is (1). In this case, the promoter will transfer all shares to you (shareholders) on the incorporation date. Once the company’s bank account is opened, he/she will transfer all capital to its account.
For a smooth registration, the representative of our firm, Yuichiro Shibata, can perform as a promoter.
5. Is it possible for an overseas company to be a sole shareholder?
Yes, it is possible.
6. Can all board members be overseas residents? (Do we have to reside in Japan in order to be a board member?)
Is there any problem if a company does not have any board members residing in Japan?
In Japan, it used to be mandatory for companies to have at least one (1) representative who resides in Japan but this rule was abolished in March 2015. (In the case of a branch office, which is different from an individual entity.)
Now Japanese companies can be incorporated and exist without having any residents in Japan in board members. However, it is difficult for those companies to start their business in Japan because it is nearly impossible even to open a bank account.
We suggest that a company has a representative who resides in Japan until it is ready to start its business.
7. Is a virtual office acceptable as the head office address?
Yes, it is acceptable.
Depending on business purposes, however, a real and private office may be required in order to obtain government approvals and licenses or start its business.
To obtain a business manager visa as well.
8. How long should we set as term of office of director(s)?
It is until the conclusion of the annual shareholders’ meeting for the last fiscal year which ends within two (2) years from the time of their election in principle, and all companies can shorten it by the articles of incorporation or a resolution of a shareholders’ meeting.
Non-public (closed) companies can extend it up to 10 years.
All companies must file an application for a registration of directors (re-)election after the expiration, and can save cost for the registration if the term of office is extended.
However, if a director is dismissed in the term without any justifiable reasons, the director can claim for damages arising from the dismissal from the company.
9. Tell me about a corporate seal (inkan) and corporate certificate.
A company must have its own corporate seal.
The seal impression is registered with a company’s information in Legal Affairs Bureau. Legal Affairs Bureau issues a certificate of corporate seal impression and a certificate of registered information. These documents are generally attached with important documents such as agreements.
10. When is a company incorporated?
We have to file an application for a registration of incorporation with Legal Affairs Bureau to establish a company.
The date of filing is the date of incorporation.