Published: September 2, 2025
General Process of Starting a Business in Japan
Foreign entrepreneurs have several options when establishing a business in Japan.
These include:
- A foreign company creating a subsidiary in Japan
- A foreign company opening a branch office in Japan
- A foreign individual starting a sole proprietorship in Japan
- A foreign individual incorporating a company in Japan
Among these, the most common route is for an individual to incorporate a company in Japan in order to launch a new venture.
Foreigners who already hold permanent residency may incorporate and operate a company under the same conditions as Japanese nationals. By contrast, most foreigners without this status must obtain a Business Manager Visa to legally manage a company in Japan. Consequently, those requiring this visa must follow a structured process that includes both the visa application and the lease of a dedicated office.
The six steps below outline the standard process for most foreign entrepreneurs.
1. Business Manager Visa Application (Certificate of Eligibility)
To begin, a foreign national without an existing visa must apply for a Business Manager Visa.
The initial step is to secure a Certificate of Eligibility (CoE) from the Immigration Services Agency of Japan. This certificate serves as pre-approval and is later issued for the actual visa at a Japanese embassy or consulate abroad.
At this stage, applicants are required to provide several documents: proof of investment funds, a detailed business plan, and information regarding the intended office.
The review process typically lasts several months, during which immigration authorities carefully evaluate both the feasibility of the plan and the consistency of the documentation.
Because this phase carries the highest risk of rejection, careful preparation and consistency of materials are crucial.
The visa granted at this stage permits a four-month stay, during which the entrepreneur must complete company incorporation and then apply to extend the visa to one year.
2. Entry into Japan (4-month visa)
Once the CoE has been issued, the applicant can obtain the visa from a Japanese embassy or consulate and then enter Japan. Upon arrival, a Residence Card is provided at the airport, which marks the legal starting point for business preparation.
Following entry, the entrepreneur must first secure a residential address, complete resident registration with the city office, and register a personal seal if required. With these formalities completed, preparations for company incorporation can begin.
3. Securing an Office
A Business Manager Visa requires proof of an independent, dedicated office. Residential properties and shared co-working spaces usually do not meet this requirement. Instead, the lease must clearly state that the property is available for business use.
In practice, locating such an office can be a considerable hurdle for foreigners. Lease negotiations are often conducted in Japanese, and landlords typically require a guarantor or the use of a guaranty company. For this reason, securing an office frequently becomes one of the most challenging steps. Identifying possible office options at an early stage is therefore advisable.
4. Company Incorporation
After securing the office, the entrepreneur may proceed with company registration. This step requires preparing the necessary documents and transferring at least 5 million yen in capital (approximately 35,000 USD) into a Japanese bank account prior to filing the registration application.
(Note: As of September 2025, revisions to the capital requirement are under discussion. Updates will be provided once finalized.)
Japan offers two primary corporate structures: Kabushiki Kaisha (KK, comparable to a joint stock company) and Godo Kaisha (GK, comparable to a limited liability company). The choice depends on business objectives, future fundraising needs, and long-term planning.
Once the company is incorporated, operations may begin immediately since the visa has already been issued. However, the initial four-month visa must be renewed to one year before its expiration. Additional post-incorporation steps include submitting tax notifications and registering for social insurance.
5. Business Licenses and Permits
In some industries, incorporation alone is not sufficient to begin operations. Additional licenses or permits may be required. For instance:
- Operating a restaurant requires a Restaurant Business License
- Running a hotel or guesthouse requires a Hotel License
- Providing travel services requires a Travel Agency License
Such permits are generally granted once the necessary conditions are satisfied. Nevertheless, meeting these conditions can involve hiring licensed professionals or installing specialized facilities, which can be demanding.
6. Renewal of the Business Manager Visa (1-year visa)
After incorporation, the entrepreneur must renew the initial 4-month visa to a 1-year Business Manager Visa. During this review, immigration authorities consider whether:
- The company has been legally incorporated
- Business activities have commenced or are realistically underway
- The company demonstrates a reasonable prospect of revenue
Most businesses do not generate large profits in their first year, so immediate net income is not expected. However, if there is no evidence of business activity or the company continues to operate at a significant loss, the entrepreneur must provide documentation to immigration authorities showing that the business foundation is being stabilized. Unless there is a clear prospect of improvement, renewal will be difficult.
For this reason, managing the company from the outset with renewal in mind is essential.
Conclusion
The process of establishing a company in Japan can be summarized in six steps:
- Apply for a Business Manager Visa
- Enter Japan (4-month visa)
- Secure an office
- Incorporate the company
- Obtain required licenses and permits
- Renew the visa (1-year Business Manager Visa)
Each stage has its own requirements and challenges. By understanding the overall process, entrepreneurs can minimize unnecessary risks and delays.
In a separate paid article, I will introduce my first actual case: the launch of a restaurant by Belgian entrepreneurs. Unlike the standard process outlined above, this case involved entering Japan on a short-term visa and then establishing the business.
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*Note 1
“Status of residence” and “visa” are technically different under Japanese law. However, since most foreigners use the term “visa” to mean “status of residence in Japan,” we use “Visa” throughout this series for readability and convenience.
*Note 2
Whenever we mention “Immigration” in these articles, we are referring to the Immigration Services Agency of Japan.
*Note 3
We offer paid articles in four pricing categories:
A. Detailed explanations of general procedures: 1,000 yen
B. Practical, client-oriented guidance and case studies: 3,000 yen
C. Real examples with actual documents from our files: 5,000 yen
S. Special introductory content at a discounted price: 500 yen
