Types of corporate entities

If you are thinking about incorporating a company in Japan, you will quickly find that the standard choices for incorporation are either a kabushiki kaisha (hereafter “KK”) or a godo kaisha (hereafter “GK”). While both are limited liability, each has certain characteristics which may make one or the other more attractive to you when considering which type to incorporate.

(Gomei-kaisha and Goshi-kaisha are also types of corporate entities permitted under the Companies Act of Japan, but both are rarely chosen since equity participants bear unlimited liability.)

The KK is one type of corporate entity which can be incorporated under the Companies Act of Japan.
Through the incorporation of a KK, the investors (either individuals or corporations) become shareholders of the new company and each shareholder assumes limited liability up to the amount which they have invested. Shareholders acquire the right to vote at company shareholder meetings and receive dividends from company earnings. The KK has a much longer history than a GK and other forms of corporate entities and therefore is by far the most common and well-known type of business entity in Japan. If recognition is important to your business model, the KK is probably better for you.

The GK is a new type of corporate entity introduced with the enactment of the Companies Act in 2006, which places emphasis on the personal relationship between company members, and is characterized by giving the company considerable flexibility with respect to methods of decision making with respect to operations, distribution of profits and other internal matters.
While the investors in a KK are referred to as “Shareholders”, the investors in a GK are known as “Members,” and in principle each Member in addition to executing operations, possesses company representative rights. (It is possible to designate executional powers and representative rights to specific Members.) Members of a GK have limited liability; similar to the shareholders of a KK, and each Member’s liability to the company is limited to the amount which they have invested.
The GK is characterized by relatively simple setup and operations as compared to a KK and startup costs are not as much as that needed to incorporate a KK.

You can also choose a Limited Liability Partnership to do business in Japan. A Limited Liability Partnership (hereafter “LLP”) is not a corporation, but a partnership composed of the equity participants. This is limited liability, like a KK and a GK. An LLP is characterized by the fact that members can carry on the management of the LLP and decide how the members divide up the profits. Taxes are imposed on profits allocated to equity participants. If you want to change an LLP into a KK, you need to dissolve the partnership and establish a KK.






カテゴリー: Incoporationg a company | コメントをどうぞ

Ordinary Steps for Investor / Business Manager Visa

Foreign nationals living abroad who want to start their own business in Japan must obtain an Investor / Business Manager Visa. This is the visa for foreign nationals who (1) invest, start and operate a business in Japan or (2) operate and manage a business in Japan. The period of stay is 3 months, 1, 3 or 5 years.

The following is a brief summary of the steps for acquiring this visa.
If you are already in Japan, you can skip (1).
(1) Entry to Japan on temporary visitor visa
If your country has conducted a reciprocal visa exemption arrangement with Japan, you can stay in Japan without a visa. This period of stay varies depending on your nationality and purpose of visit.
(2) Incorporate a company
Incorporate a company which satisfies the requirements of the Investor / Business Manager Visa. Times vary but please expect incorporation to take at least one month.
(3) Preparation for start of business
Submit notifications to related government agencies, purchase supplies, make business agreement and so on.
(4) Submission of application for Investor / Business Manager Visa to the Immigration bureau in Japan
There are many documents required to apply for this visa.
(5) Acquire Investor / Business Manager Visa.
It typically takes one and a half months or more after an application is submitted to acquire an Investor / Business Manager Visa. If you still have some time remaining on your short-term stay in Japan when the visa is issued, you can change your status from short-term to Investor / Business Manager without leaving Japan by submitting the appropriate documents to the Immigration Bureau. (Realistically given the time required for incorporation and the visa application, in most cases you will likely need to depart the country once to avoid an overstay situation.)

I will explain each step in detail another time.







カテゴリー: A visa | コメントをどうぞ