Doing business

Japan

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Setting up a company | FDI in figures | Why you should choose to invest | Procedures relative to foreign investment | Finding assistance for further information

Setting up a company

Types of companies and capital (max/min)	Number of partners/shareholders and liability
Kabushiki Kaisha (KK), Public limited company. Minimum JPY 1	No minimum Limited to the amount of capital contributed
Yugen Kaisha , Limited liability company Minimum JPY 1	At least one Limited to the amount of capital contributed
Goshi Kaisha, Limited partnership Minimum JPY 2	At least two. 2 types of partners: active partners and sleeping partners. Unlimited for the active partners Limited to the amount of capital contributed for the sleeping partners .
Gomei Kaisha, General partnership. No minimum capital	At least one Unlimited

Business setup procedures

Setting up a company	Japan	OECD
Procedures (number)	8.0	5.6
Time (days)	23.0	13.8

Source: Doing Business.

For further information: Consult Doing Business Website, to know about procedures to start a Business in Japan.
Trade Register
The competent organization: The administrative formalities must be carried out at the bureau of legal affairs of the Ministry of Justice.

FDI in figures

Foreign Direct Investment	2008	2009	2010
FDI inward flow (millions USD)	24,426	11,939	-1,251
FDI stock (millions USD)	203,371.9	200,141.2	214,880.3
Performance Index*, ranking on 141 economies	129	135	-
Potential Index**, ranking on 141 economies	25	-	-
Number of Greenfield investments***	200	161	-
FDI inwards (in % of GFCF****)	2.1	4.0	-
FDI stock (in % of GDP)	4.2	3.9	-

Source:

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk. *** Green field investments are a form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. **** Gross fixed capital formation (GFCF) measures the value of additions to fixed assets purchased by business, government and households less disposals of fixed assets sold off or scrapped.

Why you should choose to invest Japan

Strong points: Japan is the world's second economic power. The purchasing power is one of the highest in the world. Technology is modern and innovative. Substantial means are devoted to education and R&D. Accessing the Japanese market gives access to the rest of Asia. The business climate is favorable. The population is ageing, which opens up a new development potential to meet the needs of the older age groups.
Click here for further arguments in favor of investing in Japan.
Weak points: Over-regulation in Japan continues to restrain economic growth, raise the cost of doing business, restrict competition, slow down the market entry and exit, and slow down investment.
Government measures to motivate or restrict FDI: The government still imposes some restrictions on the penetration of the Japanese economy by foreign investors. Nevertheless, Japan’s Company Law has been re-examined in 2009, which simplified and made access to the national market easier for foreign investors.
Click here for further information about this reform.
Bilateral investment conventions signed by Japan: Japan is a signatory to 12 conventions.
UNCTAD allows you to visualize the list of conventions signed by Japan, and to download these conventions.

Procedures relative to foreign investment

Freedom of establishment: Guaranteed.
Acquisition of holdings: Possible.
Obligation to declare: The different obligatory declarations in Japan are :
- when a company with a capital of more than 2 billion Yen acquires 10%, 25%, or 50 % of a Japanese company.
- when a company with more than 10 billion Yen acquires business from another company with more than a billion Yen turnover.
Competent organization for the declaration: Ministry of Finance
Japan Fair Trade Commission (JFTC)
Requests for specific authorizations: Investment of foreign capital in the fields of agriculture, forestry, fishing, mines, oil, leather and the industries of the transformation of leather, and telecommunications is examined first by the Japanese government.
Any investment in the banking sector, insurance, security, and pharmaceutical products is subject to license.

Finding assistance for further information

Investment aid agency: Japan External Trade Organization, JETRO
Invest Japan Business Support Centers (IBSC)
Kansai Council of Investment Promotion
Japan Invest Council
Entry Point Tokyo Business
Other useful resources: Venture Japan