The Complete Guide to Setting Up a Business in Japan

Oak Admin Guides

Why Japan Is Attractive, and Why It's Often Misunderstood

Japan is the world's third-largest economy, home to sophisticated consumers, deep capital markets, and some of the most advanced infrastructure anywhere. For many foreign companies, it represents stability, purchasing power, and long-term opportunity. At the same time, Japan has a reputation for being difficult to enter, slow to move, and administratively complex.

Both perceptions are true, and both are incomplete.

Japan is not closed to foreign businesses. In fact, it is legally straightforward to own and operate a company in Japan as a foreigner, even with no Japanese partners. What makes Japan challenging is not hostility, but structure. Business setup is governed by a tightly interconnected system of corporate law, immigration rules, banking practices, employment regulations, and administrative custom. Decisions made in one area quietly constrain what is possible in another.

This guide exists to explain that system as a whole. Rather than walking you through a single procedure, such as incorporation or visas, it aims to help you understand how all the moving parts fit together, so you can make informed decisions before time and money are committed.

Who Japan Is (and Isn't) a Good Fit For

Japan tends to reward companies that think long-term, invest in credibility, and are willing to adapt their operating assumptions. It is often an excellent fit for companies with patient capital, high-quality or specialized offerings, and a willingness to localize operations rather than simply transplant global templates.

Companies that succeed in Japan often share several traits:

• Prepared for incremental growth rather than explosive scaling
• Take compliance and administration seriously
• Invest early in local expertise
• Accept that decision-making may slow down before it speeds up

Conversely, Japan can be a difficult market for companies that expect rapid, low-friction entry, rely on informal arrangements, or view Japan primarily as a short-term arbitrage opportunity.

Everything Is Connected

In Japan, incorporation affects banking. Banking affects visas. Visas affect hiring. Hiring affects payroll and tax. Payroll affects compliance. Each decision narrows or expands what is possible downstream.

Companies that approach setup as a checklist often struggle. Those that treat it as an interconnected system move more smoothly and avoid costly rework.

Guide Sections

This guide is organized into the following sections. Each covers a critical component of business setup in Japan: