1. Choose a legal structure

 

To establish a company in Japan, a stock corporation (KK) is the most commonly used structure. A limited liability company (GK) is another option.

Among the newly set up companies in the year 2020, 86,620 businesses chose KK, while 33,287 chose GK.

Both the KK and GK company models are for businesses seeking to make a profit.

In both the company:

• is legally separate from the people who run it
• has separate finances

 

 

 

Here are some of the advantages of GKs

Easy setup 

・When choosing a GK the articles of incorporation do NOT have to be notarized by a notary public while with a KK this   

   does have to be done.

 

Flexibility/Less regulation/Less paperwork

 

・A GK is NOT obliged to disclose its financial statements while a KK is.

 

・There is NO regulation of a director’s term of office in a GK.

 

    In contrast 10 years is the maximum term of office in a KK. 
    That means a KK needs to change its company record every ten years even if there are no material changes.

 

Low cost

・Choosing a GK can mean a saving of JPY 52,000 in notary fees. 

・The setup registration tax of a GK is a minimum of JPY 60,000 while that of a KK is JPY 150,000.

・There is also a saving on financial disclosure costs when using a GK (It costs about JPY 70,000 for a KK to prepare the  

    relevant disclosure of information for the official gazette.)

 

On the other side, there are disadvantages of GKs

Capital investment

・If you need to obtain outside funding, such as from an investor or a venture capitalist, you may be better off  

    establishing a KK. A KK has an easier time obtaining outside funding by selling shares of stock.

 

Unanimous consent

・The articles of incorporation may be amended only by the unanimous consent of members.

・Addition of new members or transfer of a member's interest is subject to the consent of all members.

 

 

 For more information ↓

Setting Up Business | Investing in Japan - Japan External Trade Organization - JETRO