In recent years, more and more foreign companies have been exploring entry into the Japanese market or the establishment of Japanese subsidiaries, and our firm has been receiving a growing number of enquiries in this area.

Behind this trend are Japan-specific attractions such as a stable legal system, highly developed infrastructure, a strong talent pool, and lower investment costs due to the weaker JPY. At the same time, Japanese laws and regulations are complex, and it is not easy for overseas companies to obtain accurate information on their own.

Our firm has extensive experience assisting foreign companies with Japanese entity formation, cross-border M&A, compliance matters, visa procedures, and international disputes, among other areas. Drawing on this experience, we will be publishing a regular blog series explaining the key legal and practical points that overseas businesses should at least be aware of when starting business in Japan.

Below is the planned structure of the blog series:

Series1：Guide to Entering Japan & Setting Up a Company

An overview of the essential basics for market entry into Japan, including types of Japanese entities, incorporation procedures, visas, and foreign investment regulations.

Series 2: Companies Act & Corporate Governance

An introduction to how Japanese companies are run in practice, covering shareholders, directors, governance structures, articles of incorporation and other key points to watch out for.

Series 3：Labour Law & HR Practice

A practical explanation of employment contracts, work rules, social insurance, dispatch and subcontracting arrangements, and other important aspects of employment management in Japan.

Series 4：Criminal Law & Compliance

A discussion of common real-world issues such as incidents involving foreign employees, immigration control, and corporate criminal risks.

In the next post, SERIES 1-01, we will look at the different forms of presence available when entering the Japanese market. One of the very first questions foreign companies face when starting business in Japan is which type of entity they should choose. Japan offers several options, including a stock company (Kabushiki Kaisha, or “KK”), a limited liability company (Godo Kaisha, or “GK”), and silent partnerships (Tokumei Kumiai, or “TK”). This is one of the most common questions we receive at our firm.

As seen from examples such as Apple Japan G.K. and Amazon Japan G.K., a GK can be appropriate depending on the nature of the business. In practice, however, more than 90% of foreign entrants choose a KK. For start-ups and investment funds that are aiming for an exit through a share sale, the KK structure—which issues shares—is overwhelmingly easier to work with. In the next article, we will compare each form of presence and, from a practical perspective, explain which structures tend to suit which types of business.

Contact Us

In our Japan Business Law Guide, we will continue to share useful information tosupport your business expansion and operations in Japan.
If you have any questions or would like advice on a specific matter, please feelfree to contact us at our firm’s Contact Email.

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