How to Start a Business in Japan as a Foreigner: Company Setup, Visa, Tax and Bank Account Checklist

It is possible for foreign entrepreneurs to start a business in Japan, but it is important to understand one thing from the beginning: incorporating a company, obtaining a visa, opening a bank account, and making tax-related registrations are all separate steps.

Many foreign entrepreneurs tend to think that once a Japanese company is registered, they can immediately begin operations, pay themselves, hire employees, and open a bank account. In practice, the process requires careful planning across legal registration, immigration, tax, accounting, payroll, and banking procedures.

This article explains the key steps foreign entrepreneurs should consider before and after setting up a business in Japan.

1.　Choose the right business structure in Japan

Foreign businesses usually enter Japan through one of the following structures:

For many foreign entrepreneurs and foreign-affiliated businesses, the following two options are commonly considered in practice:

• Kabushiki Kaisha, or KK / 株式会社
• Godo Kaisha, or GK / 合同会社

A KK is often preferred when prioritizing credibility with Japanese clients, banks, investors, or employees. A GK is relatively simpler and less costly to operate, and it can work well for small businesses, consulting firms, SaaS businesses, and owner-managed companies.

2.　Can a non-resident foreigner incorporate a company in Japan?

Yes. A foreign national who does not reside in Japan can apply to incorporate a Japanese company.

The Ministry of Justice states that the previous requirement stipulating that at least one representative director of a Japanese company must have a residence in Japan has been abolished. As a result, even if all representative directors live overseas, an application to register the incorporation of a Japanese company can be accepted. Furthermore, the representative director does not need to be Japanese. (法務省)

However, “possible” does not always mean “easy.” In practice, foreign entrepreneurs often face the following challenges:

The Ministry of Justice also provides guidance on proving capital payment in cases involving non-residents, as well as on account holders who may be used in certain situations, signature certificates, and Japanese translations of foreign-language documents. (法務省)

In short, a non-resident foreigner can incorporate a Japanese company, but the founder should plan the registration, banking, visa, and tax matters as a single integrated process.

3.　Decide whether you need a visa to run the business in Japan

The criteria for residency status differ depending on whether you simply own a Japanese corporation from abroad or reside in Japan and actually manage the business.

If you want to live in Japan and run the business, the key immigration status is usually the Business Manager Visa / 経営・管理ビザ.

Following the 2025 reform, the requirements for the Business Manager status have become stricter. The Immigration Services Agency explains that the revised rules came into effect on October 16, 2025. Key changes include the requirement to employ at least one full-time employee, the need for capital or similar business scale of at least JPY 30 million, a certain level of Japanese language proficiency, educational or professional experience requirements, and expert confirmation of the business plan. (法務省)

The Immigration Services Agency also states that, under the revised rules, using one’s home as a business office is generally not permitted, because the business must secure an office suitable for the scale of business operations. (法務省)

This means foreign entrepreneurs should not treat the visa as an afterthought. The business plan, capital, office, employee plan, salary plan, tax compliance, and social insurance compliance may all have a practical impact on whether you can operate a business in Japan.

4.　Consider the Startup Visa if you are still preparing

If you are not ready to meet the full Business Manager Visa requirements immediately, the Startup Visa may be relevant.

The Ministry of Economy, Trade and Industry explains that, although starting a business in Japan normally requires the Business Manager status and requirements such as securing an office, the Startup Visa allows eligible entrepreneurs to stay in Japan for up to two years to prepare for launching a business before meeting those requirements. The application is made through authorized local governments or private organizations, and requirements may vary depending on the organization. (経済産業省)

The Startup Visa is not a substitute for proper tax, accounting, and business planning. It is merely a preparation framework. Entrepreneurs should use the preparation period to develop:

• a realistic business plan;
• a capital and funding plan;
• an office plan;
• a hiring plan;
• accounting and tax compliance procedures;
• a transition plan to the Business Manager Visa or other suitable residence status.

5.　Register the company and prepare the required documents

The company registration process depends on the structure you choose, but for a typical KK or GK, the process generally proceeds as follows:

1. Decide the company name, address, business purposes, capital amount, officers, and fiscal year-end.
2. Prepare the articles of incorporation.
3. Complete notarization if required.
4. Pay in capital.
5. Prepare registration documents.
6. File the registration application with the Legal Affairs Bureau.
7. Obtain the company’s certificate of registered matters and seal certificate after registration.

For foreign founders, additional documentation may be needed, such as signature certificates, overseas corporate documents, translations, and power of attorney documents.

At this stage, it is important to decide the fiscal year-end carefully. Many founders simply choose December or March, but this can create unnecessary tax and administrative pressure. For example, if the company is incorporated shortly before the fiscal year-end, the first accounting period may be very short, and tax filings may come earlier than expected.

6.　File tax notifications after incorporation

Company registration is not the end of the setup process. After incorporation, the company must file tax notifications.

For a newly established Japanese corporation, the National Tax Agency states that a Notification of Corporation Establishment must be submitted within two months from the date of incorporation, together with documents such as a copy of the articles of incorporation. (国税庁)

If the company wants to use blue return filing / 青色申告 from the first fiscal year, the application deadline is generally the earlier of either three months after incorporation or the day before the end of the first fiscal year. (国税庁)

Typical tax-related filings may include:

If the company pays salaries in Japan, a notification of establishment of a salary-paying office may also be required. The National Tax Agency states that when a salary payer establishes, relocates, or closes an office handling salary payment affair in Japan, the notification should be submitted within one month from the relevant event. (国税庁)

This is one of the most common areas where foreign founders make mistakes. They register the company, start paying themselves or employees, but do not set up payroll withholding and tax filing procedures properly.

7.　Understand consumption tax and invoice issues

Japan’s consumption tax rules are especially important for foreign businesses in the following sectors:

• e-commerce;
• SaaS;
• digital platforms;
• online services;
• import/export;
• consulting;
• cross-border B2B services;
• businesses selling to Japanese corporate customers.

Whether a newly established company needs to register as a taxable entity for consumption tax or enroll in the invoice system depends on factors such as capital, taxable sales, customer demographics, business model, and timing.

The key point is this: do not assume that a newly incorporated company has no consumption tax issues.

For example, a foreign-owned company that mainly sells to Japanese business customers may face commercial pressure to become a qualified invoice issuer, even if it is not automatically required from a tax payment perspective. On the other hand, registering too early without fully understanding the cash-flow impact could result in an unnecessary tax burden.

Consumption tax and invoice registration should therefore be reviewed before the company starts issuing invoices to Japanese customers.

8.　Open a corporate bank account

Opening a corporate bank account is often one of the major hurdles for foreign-owned companies in Japan.

JETRO’s reference information, based on the Japanese Bankers Association notice, lists documents generally required for opening a corporate bank account, such as the certificate of registered matters (corporate register), corporate seal registration certificate, identification documents of the person applying, and the bank seal. It also notes that required documents vary by financial institution and that each financial institution conducts screening and may decline the application based on comprehensive judgment. (ジェトロ)

JETRO also notes that banks may examine the company’s actual business conditions and may ask for information such as the corporate profile, financial condition, beneficial owner information, purpose of opening the account, business details, and licenses or permits if relevant. (ジェトロ)

In addition, Japan’s Financial Services Agency has requested financial institutions to further strengthen measures to prevent misuse of deposit accounts, including corporate accounts and internet banking, with a focus on preventing fraud and understanding actual account usage. (金融庁)

For foreign founders, this means that banks are not only checking whether the company exists. They are also trying to understand whether the business is legitimate, who controls it, how funds will flow, and whether there are anti-money-laundering risks.

Before applying for a bank account, prepare the following documents:

A common mistake is applying to a bank immediately after registration with only minimum required company documents. A better approach is to prepare explanatory materials demonstrating the company’s actual business operations in advance.

9.　Set up payroll, director compensation, and social insurance

When the Japanese company pays salary or director compensation, payroll and withholding tax procedures are required.

Foreign entrepreneurs often ask: “Can I pay myself from my Japanese company?” The answer depends on your position, status of residence, tax residency status, social insurance status, and corporate tax planning.

For Japanese corporate tax purposes, director compensation is not something that should be changed casually every month. It should be structured carefully together with the company’s projected profit, cash flow, visa plan, and social insurance contributions.

Social insurance is also an important issue. The Japan Pension Service states that certain workplaces, including corporate workplaces, are required to enroll in Employees’ Health Insurance and Employees’ Pension Insurance as compulsory applicable workplaces. (年金機構)

This matters especially for foreign founders applying for or renewing the Business Manager status. The Immigration Services Agency’s revised Business Manager guidance also refers to checking compliance with public charges, including labor insurance, social insurance, national taxes, and local taxes at the time of renewal. (法務省)

In other words, tax and social insurance compliance are not merely accounting issues. They may also affect the stability of your residency status.

10.　Create a practical launch checklist

Before starting operations in Japan, foreign entrepreneurs should confirm the following items:

The safest approach is to build the business setup process backward from the founder’s actual goal.

For example:

• If the goal is to live in Japan and manage the company, start from the visa requirements.
• If the goal is to sell to Japanese corporate customers, review invoice and consumption tax issues early.
• If the goal is to hire employees, plan payroll, labor insurance, and social insurance before the first hire.
• If the goal is to receive investment or open a bank account smoothly, prepare ownership and business substance documents before incorporation.

Conclusion: Do not separate company setup from tax, visa, and banking

Starting a business in Japan as a foreigner is absolutely possible. However, the process should not be treated as a mere registration task.

A successful Japan market entry usually requires a coordinated approach to the following factors:

• company registration;
• immigration status;
• office planning;
• tax notifications;
• accounting setup;
• payroll and social insurance;
• bank account opening;
• consumption tax and invoice planning.

The most common mistake is completing incorporation first and thinking about tax, visa, and banking later.

A better strategy is to design the comprehensive plan before registration. This allows the founder to choose the right company structure, avoid missed tax deadlines, prepare for bank screening, and build a business plan that is consistent with immigration and tax requirements.

For foreign entrepreneurs, the question is not only “Can I incorporate a company in Japan?”

The better question is:

“Can I build a company structure that is legally registered, tax compliant, bankable, and suitable for my visa and business objectives?”

That is where professional planning can make a significant difference.

Need help setting up your business in Japan?

We provide support to foreign founders and foreign-affiliated companies regarding tax notifications, accounting, payroll, consumption tax, and post-incorporation compliance following the establishment of a Japanese corporation.

Contact us before incorporation so we can help you design a setup plan that fits your visa, banking, and tax requirements.