Setting up GK（Japan subsidiary）→Fee for incorporation

Incorporation procedures for setting up Godo Kaisha (Japanese LLC).

６．Frequently Asked Questions（FAQ)

Q１　Wich corporate form is recommended: a "Kabushiki Kaisha”(stock company) or a "Godo Kaisha"(limited liability company)?
A１　Generally speaking, for a U.S. corporation, a "Godo Kaisha" is more advantageous from a U.S. tax perspective due to the relationship with the U.S. tax system. This is because, by filing IRS Form 8832 to elect "pass-through" taxation, losses incurred by the Japanese subsidiary can be treated as losses of the U.S. parent company for tax purposes. If there is no specific U.S. tax advantage to be gained, a "Kabushiki Kaisha" is recommended, as it generally enjoys greater credibility with third parties in Japan.
For further details, please refer to this page on our firm's website.

Q２　What documents are required when a foreign parent company becomes a shareholder (or "member") of a "Godo Kaisha"?
A２　You will need to prepare an affidavit—certified by a public notary in your home country—confirming the company's existence and the identity of its officers in accordance with local corporate law. The specific method for obtaining these documents varies by country. The judicial scrivener handling the procedure will contact the relevant person in your home country directly to arrange for the necessary documentation.

Q３　There isn't enough time to obtain the documents required for a foreign parent company to become a shareholder (or "member") of a *Godo Kaisha*. Is there a simpler method?
A３　One simplified approach is to incorporate the company with a Japan-based individual acting as the incorporator and initial 100% shareholder, and then transfer 100% of the shares to the foreign parent company on the same day, thereby making it a wholly owned subsidiary of the foreign parent. In this scenario, the capital is initially funded via a loan from the foreign parent company; upon the immediate transfer of shares, the loan is offset against the share purchase price to finalise the transfer of ownership. Using this method eliminates the need to obtain the specific documents otherwise required for a foreign parent company's direct investment, thereby shortening the time required to complete the incorporation process.

However, please note that the Japanese subsidiary's shareholder history will show the Japan-based individual as the initial 100% shareholder, followed by the foreign parent company as the subsequent shareholder. If this history presents no issues for you, starting with a Japan-based individual as the initial 100% shareholder is a viable option. If you prefer not to leave a record of the transaction, we can arrange for you to obtain the "documents required for investment by a foreign parent company" in your home country.
Please note, however, that if an officer of the parent company residing abroad is to serve as an officer of the Japanese subsidiary, personal certification documents for that individual will be required; there is no simplified procedure for this requirement.

Q４　How is the capital paid in?
A４　The funds are transferred to the personal bank account of a promoter residing in Japan. When remitting funds from abroad, fees may be deducted by intermediary banks or by the receiving bank for foreign exchange processing. If the final amount received falls below the required capital amount, the incorporation process becomes invalid, so caution is necessary. To avoid this, you should either transfer a slightly larger amount or instruct the handling bank to use the term "Paying Bank’s Charges are for account of APPLICANT" so that the sender bears all fees.

Q５　Is a capital amount of just 1 yen acceptable?
A５　Under the Companies Act, it is legally possible to incorporate a company with a capital of just 1 yen. In the United States, for instance, some states allow for zero-yen capital, and some clients request incorporation with 1 yen. We have handled such 1-yen incorporations in the past.
However, given the current hurdles involved in opening a corporate bank account, a "1-yen company" is not a realistic option.
So, what is an appropriate capital amount? The basic approach is to determine the amount based on the funds required for the planned business operations.
There have been cases where a bank account was successfully opened with a capital of 1 million yen, provided the actual business operations could be clearly explained. However, as a general guideline, we recommend a minimum of 3 million yen—the minimum capital requirement under the former Limited Liability Company Act. Ideally, 10 million yen—the former minimum capital requirement for a *Kabushiki Kaisha* (stock company)—is preferable.

Q６　Are there specific requirements for the address used as the head office location? Is a virtual office acceptable?
A６　The address should be selected with consideration for how the bank account opening process will be handled. If you have the necessary documentation to prove actual business operations (such as contracts with Japanese clients), a virtual office is acceptable.

A７　日Yes, an individual does not need to reside in Japan to serve as an officer of a Japanese subsidiary. However, from a business perspective, it may be preferable to appoint a representative who resides in Japan.
Please note that if a Japan-based representative is not appointed, there may be restrictions on the payment of incentive bonuses—a common benefit offered by foreign-affiliated corporations—so this factor should be considered when making your decision.
For more information on "incentive bonuses for Japanese subsidiary officers," please refer to this page on our website.

A８　設The time required depends on who the initial shareholder will be (i.e., whether documents must be obtained from the foreign parent company). Once all necessary documents are gathered, a judicial scrivener will prepare the registration documents and submit them to the Legal Affairs Bureau within approximately two weeks.
Generally, it takes about two to three weeks to answer the questionnaire and gather the necessary documents. The official date of incorporation is the day the documents are submitted to the Legal Affairs Bureau; however, the process is not complete until the Bureau finishes its review and issues the certified copy of the corporate registry. Depending on the Bureau's workload, this final stage typically takes one to four weeks. Once the incorporation process begins, the assigned judicial scrivener will estimate the current processing time based on the Bureau's congestion levels.
Please anticipate a total timeframe of approximately four to eight weeks for the entire incorporation process.

Q９　Please explain the procedure for opening a corporate bank account.
A９　Banks have recently become stricter in their screening processes for opening corporate accounts, largely due to regulations on money laundering and the prevention of organised crime. The outcome depends on the extent of the company's actual business operations (e.g., the existence of a physical office, whether business activities have commenced, the number of employees, etc.). We assist clients in opening accounts by advising on appropriate strategies while they apply to various banks following the company's incorporation. For further details, please refer to this page on our website. As of April 2026, opening a bank account takes approximately two weeks to one month.

A10　Our firm handles tax, accounting, and payroll services. Social insurance and labour insurance matters are handled by our partner certified social insurance and labour consultants. We also have English-speaking partners specialising in corporate registration (judicial scriveners), visa application services (administrative scriveners), and legal consultations (attorneys), allowing us to serve as a single point of contact for all these needs.

A11　All professionals, including our partners, are capable of communicating in English (including via web conferences).

Before deciding to establish a local subsidiary

It appears you are considering a subsidiary structure for your Japanese business operations, but why have you chosen a "Kabushiki Kaisha" (stock company) over a "Godo Kaisha" (limited liability company)?

Have you adequately addressed tax planning in your home country? Is this truly the best approach? *Please consult us if you have any remaining concerns.