Oak Admin Guides
General Questions
Can foreigners own 100% of a Japanese company?
Yes. Japan allows 100% foreign ownership in most industries, with no requirement for Japanese partners or shareholders.
Are there industries restricted to foreign ownership?
Yes, a limited number of regulated sectors require notification or approval.
Do I need to live in Japan to start a company?
No. Incorporation can be completed without residing in Japan, though residency affects visas and banking later.
How long does it realistically take to set up a business in Japan?
Legal incorporation may take weeks, but full operational readiness (banking, visas, hiring, payroll) often takes 3–6 months.
Is Japan a good market for startups?
Japan supports startups but often favors long-term planning and regulatory compliance over rapid experimentation.
Is English widely accepted for business administration?
English is common in international business, but many official procedures are conducted in Japanese.
Market Entry Structures
What market entry options exist in Japan?
Representative offices, branch offices, and subsidiaries are the three main options. See our Market Entry Structures page for details.
Can a representative office generate revenue?
No. Representative offices are limited to non-commercial activities only.
Is a branch office a separate legal entity?
No. A branch office is legally part of the foreign parent company.
Is a subsidiary required for long-term operations?
In practice, subsidiaries are usually the most flexible and credible structure for long-term business.
Can I switch from a branch to a subsidiary later?
Yes, but restructuring requires new incorporation and administrative procedures.
Incorporation
What company types are available to foreign founders?
The most common are Kabushiki Kaisha (KK) and Godo Kaisha (GK). See our Incorporation page.
Is there a minimum capital requirement?
No statutory minimum exists, but capital levels can affect banking and visas.
Can one person incorporate a company in Japan?
Yes. Single-shareholder and single-director companies are permitted.
Can incorporation be done remotely?
Yes, with appropriate representation and documentation.
Does incorporation allow immediate hiring?
No. Payroll, insurance, and banking typically must be established first.
Offices & Banking
Is a physical office required to incorporate?
Not always. Virtual offices are commonly used at the incorporation stage. See our Offices & Banking page.
Are virtual offices accepted by banks?
Often not; many banks prefer a physical office presence as part of their risk assessment.
Can coworking spaces be used as registered offices?
Yes, if the provider permits registration and the setup demonstrates sufficient substance.
Can I use my apartment as an office?
Sometimes, but lease terms and how authorities/banks view the arrangement can matter.
Does office size matter for visas?
Substance matters more than size, but physical presence is often important depending on the status and business plan.
Why is corporate banking difficult in Japan?
Banks apply strict AML and substance-based risk assessments.
Can I open a bank account before incorporation?
No. Corporate registration is typically required first.
Is a Japan-resident director required for banking?
Not legally, but local residency often improves approval chances depending on the bank's policies.
Can I operate without a Japanese bank account?
In practice, no. Payroll, taxes, and many payments typically require local banking.
Visas & Immigration
Can I get a visa just by owning a company?
No. Immigration requires a defined operational role and supporting business context. See our Visas & Immigration page.
Do I need a visa before incorporation?
Not necessarily; sequencing depends on the plan and status.
What visas are used by founders?
Founder/executive activities typically rely on business/management-related statuses, assessed case-by-case.
Are visas tied to company performance?
Renewals commonly consider actual business activity and compliance.
Can dependents accompany visa holders?
Yes, dependent statuses are available subject to conditions.
Hiring & Employment
Is employment "at will" in Japan?
No. Japan has strong employee protections; termination generally requires objective, reasonable grounds. See our Hiring & Employment page.
Are written employment contracts required?
Written terms are standard and expected; documenting working conditions is important.
Do probation periods allow easy termination?
No. Probation exists, but legal protections still apply and termination should be justified.
Are fixed-term contracts allowed?
Yes, but repeated renewals can increase employee protections depending on circumstances.
Can I hire foreign employees locally?
Yes, if the role and candidate qualify under immigration rules.
Payroll & Social Insurance
Is payroll mandatory for one employee?
Yes. Employers generally must handle withholding and social insurance enrollment.
What insurance programs must employers enroll in?
Commonly health insurance and pension (and other programs depending on employment type).
Can social insurance enrollment be delayed?
Delaying required enrollment is generally non-compliant and can create downstream issues.
Is year-end tax adjustment mandatory?
Employers typically perform year-end adjustment for many employees.
Tax & Accounting
Must companies file taxes even if unprofitable?
Yes. Filing obligations generally exist regardless of profitability. See our Tax & Accounting page.
What is consumption tax?
Consumption tax is Japan's VAT-equivalent; obligations apply once conditions/thresholds are met.
Do I need a Japanese accountant?
Not legally required, but strongly recommended due to local rules and Japanese-language procedures.
Can I use IFRS or US GAAP?
You may use international standards internally, but statutory/tax filings generally follow Japanese rules.
Are audits common for small companies?
Routine audits are not inevitable, but tax inspections can occur.
Relocation & Operations
Is relocation support legally required?
No, but relocation support can significantly improve retention and stability. See our Relocation & Operations page.
What are the biggest relocation challenges?
Housing, guarantor requirements, language barriers, and administrative procedures are common challenges.
Do foreign residents need to register addresses?
Yes, resident registration is required after establishing residence.
Service Providers
Can one firm handle everything?
Japan tends to use specialist providers (incorporation, immigration, payroll, tax), so multiple providers are common.
Who coordinates multiple providers?
Coordination usually sits with the company (or a designated internal owner) to ensure consistency across banking, immigration, and compliance.
Is outsourcing common in Japan?
Yes, outsourcing payroll, accounting, and compliance is common, especially for new entrants.
Strategic Advice
What is the most common market entry mistake?
Treating setup as isolated tasks rather than a connected system (office → banking → visas → hiring → compliance).
Is slow entry better than fast entry?
Deliberate sequencing is usually safer than speed, because banking and immigration depend on substance and consistency.
Is Japan worth the effort?
For companies aligned with its systems, Japan can offer stability and scale.