Starting a Company in Japan: Costs and Procedures

Published on October 30, 2025 and written by Cyril Jarnias

Japan, the world’s third-largest economy, attracts many foreign entrepreneurs eager to establish themselves in this dynamic and innovative market. However, setting up a company in the Japanese archipelago can prove to be a complex and costly process without proper preparation. This article will guide you through the various steps and costs associated with starting a business in Japan, while offering strategies to optimize your investment.

Paying for Registration: Essential Fees

Registering a company in Japan involves several administrative procedures and mandatory fees. The total registration cost can range from 200,000 to 1,000,000 yen (approximately $1,300 to $6,500), depending on the chosen business structure and your project’s complexity.

Main registration fees include:

• Registration fees at the Legal Affairs Bureau: approximately 150,000 yen ($980)
• Notary fees for document authentication: between 50,000 and 100,000 yen ($325 to $650)
• Official document translation fees: approximately 50,000 yen ($325)
• Company seal fees: between 10,000 and 20,000 yen ($65 to $130)

It’s important to note that these fees may vary depending on your company’s location and your application’s complexity. Major cities like Tokyo or Osaka tend to have higher costs than rural areas.

Complying with Regulations: A Necessary Investment

Compliance with Japanese regulations is a crucial aspect of establishing and managing a business in the country. Compliance costs can represent a significant portion of your initial and operational budget.

Among the main compliance costs are:

• Certified accountant fees: between 100,000 and 300,000 yen per year ($650 to $1,950)
• Tax filing fees: approximately 50,000 yen per year ($325)
• Costs related to compliance with specific industry regulations: varies by industry
• Audit fees (mandatory for certain large companies): starting from 1,000,000 yen ($6,500)

It’s crucial to budget these costs from the beginning of your project, as non-compliance with regulations can result in significant fines and damage your company’s reputation. Furthermore, certain business sectors, such as finance or healthcare, are subject to stricter regulations and therefore higher compliance costs.

Investing to Start: Examining Initial Capital

The initial investment to establish a company in Japan varies considerably depending on the type of business and industry sector. The legal minimum capital for a stock company (Kabushiki Kaisha) is 1 yen, but in practice, more substantial capital is often necessary to be credible with Japanese partners and clients.

Here are some elements to consider in your initial investment:

• Share capital: typically between 5,000,000 and 10,000,000 yen ($32,500 to $65,000) for a stock company
• Office rental: between 50,000 and 200,000 yen per month ($325 to $1,300) depending on location
• Equipment and furniture: approximately 1,000,000 yen ($6,500)
• Website development and initial marketing: between 500,000 and 2,000,000 yen ($3,250 to $13,000)

It’s important to note that foreign investors can benefit from certain incentive programs and subsidies offered by the Japanese government, particularly in priority sectors like green technologies or artificial intelligence. These programs can significantly reduce your initial investment.

Daily Management: Anticipating Operational Expenses

Operational expenses in Japan can be high, particularly in major cities. It’s crucial to anticipate them well to ensure your company’s long-term viability.

Here’s an overview of the main operational expenses to expect:

• Salaries: the average salary in Japan is approximately 4,000,000 yen per year ($26,000), but can be much higher for skilled positions
• Social charges: approximately 15% of gross salary
• Office rent: between 600,000 and 2,400,000 yen per year ($3,900 to $15,600) for a small office
• Insurance: between 100,000 and 500,000 yen per year ($650 to $3,250)
• Utilities (electricity, water, internet): approximately 50,000 yen per month ($325)

It’s important to note that costs can vary considerably depending on your company’s location and size. For example, rents in Tokyo are among the highest in the world, while secondary cities offer more affordable options.

Optimizing Your Budget: Strategies to Reduce Costs

Despite the high costs, several strategies exist to optimize your budget when establishing and managing your business in Japan.

1. Choose Your Legal Structure Wisely

Your company’s legal form can significantly impact your initial and operational costs. A limited liability company (Godo Kaisha) may be more economical to establish and manage than a stock company (Kabushiki Kaisha), while offering similar protection to shareholders. However, ensure this structure suits your long-term objectives.

2. Take Advantage of Government Incentives

Japan offers various incentive programs to attract foreign investment. For example, the “Invest Japan” program provides grants, tax reductions, and administrative support to foreign businesses in certain priority sectors. Inquire with the Japan External Trade Organization (JETRO) to learn about available opportunities.

3. Opt for Flexible Solutions

Instead of renting traditional offices, consider more flexible options like coworking or virtual offices. These solutions can significantly reduce your real estate costs while providing you with a professional address in Japan.

4. Outsource Certain Functions

Outsourcing certain non-essential functions can result in substantial savings. For example, you can use outsourced accounting services rather than hiring a full-time accountant. Similarly, using virtual secretary services can reduce your administrative costs.

5. Leverage Technology

Adopting technological solutions can help reduce your operational costs. For example, using integrated management software (ERP) can improve your efficiency and reduce staffing needs. Similarly, online collaboration tools can decrease your travel expenses.

Conclusion: A Strategic Investment for a Promising Market

Establishing a company in Japan represents a significant investment, but one that can prove very profitable if well planned and executed. Total creation and operating costs for the first year can range between 10 and 50 million yen ($65,000 to $325,000), depending on your company’s size and nature.

Despite these high costs, the Japanese market offers unique opportunities for foreign businesses. With the world’s third-largest economy, a sophisticated consumer market, and a strategic position in Asia, Japan remains an attractive destination for international investors.

To succeed, it’s crucial to understand the local business environment well, adapt to Japanese business practices, and invest in long-term relationships with your partners and clients. A well-planned initial investment and rigorous cost management can lay the foundation for a prosperous business in the Japanese market.