business

There are many reasons to start a business in Japan, not the least of which is that currently the Japanese government is actively encouraging such investments by reducing red tape and offering incentives to make it easier for foreign entrepreneurs to enter the Japanese market.

If you are strongly considering opening a business in Japan, here are a few steps you should take into account:

Market Research & Legal Entity

To get started, you’ll want to ensure that your company offers profitable products or services. The first thing to do is conduct thorough market research in your particular market vertical.

Once you’ve established that there is a market for your business in Japan, the next step is to determine the legal entity you will use to conduct business. Each entity has its own tax structure and different financial requirements.

Kabushiki-Kai, or KK                        – equivalent to an unlisted stock company

Godo-Kaisha, or GK                           – equivalent to a limited liability company

Gomei-Kaisha                                     – equivalent to a general partnership company

Goshi-Kaisha                                      – equivalent to a limited partnership company

Choosing the right type of legal entity is essential for the success of your business. To learn more about which type would best suit your startup in Japan, refer to this Guide to Japanese Incorporation.

There are several steps to follow in establishing any corporation, starting with choosing an appropriate name and verifying that it is not a duplicate of another business in Japan. This search begins at the Legal Affairs Bureau.

Putting together a business plan, articles of incorporation, and then submitting an application to establish the business to the Legal Affairs Bureau is the next and final step.

Renting an Office

Typically, obtaining an office for your business will happen at the same time as you put together your business plan and incorporate the company, and before you submit your application to the Legal Affairs Bureau.

Obtain a Business Manager Visa

Anyone entering Japan must have, at the very least, a visitor’s visa. For those who wish to set up a company in Japan and operate a business, a business manager’s visa is required.

Before you can apply for an Investor/Business Manager visa, the business must already be established. This means having a documented business plan, office space rented, and an investment made of the appropriate amount (which varies depending on what type of business entity you are setting up).

Typically, a tourist visa can be converted into a Business Manager Visa if it is done within 90 days.

Hiring personnel

With the influx of foreign businesses in Japan, it can be difficult to find key personnel because bilingual individuals are in high demand and the labour market is tight.

Using a staff recruitment service, albeit expensive, is a great way to find qualified employees, but be prepared to pay above average salaries.

Marketing

Once you have the formalities of starting a company in Japan squared away, it’s time to start marketing. It’s essential to have a website translated into Japanese and utilize as many channels as you can to attract your customers or clients.  Marketing methods can be different to the western world. As an example, Facebook is not as widely used in Japan, however Twitter and Instagram are popular.

As with any company anywhere, marketing to a targeted audience is critical.

Patience

Most new businesses will not succeed overnight. By following your business plan and working diligently, you will place your company on the path to success.