weConnect Resources

Key Establishment Considerations for the Japanese Market

  • 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.
  • You will need a registered address for the incorporation.
  • Depending on your business model you may be eligible for significant consumption tax benefits.
  • If you will need to get your staff a visa, we recommend setting your initial capital to at least JPY 5,000,000.
  • We recommend setting you initial capital to be less than JPY 10,000,000 in order to avoid automatic registration as a consumption tax payer.
  • Separate seals for legal, banking and HR functions is optimal.
  • 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.