The Mipro Guide toStarting a Business in Japan

Manufactured Imports and Investment Promotion Organization (MIPRO)

6th Floor, World Import Mart Bldg., 3-1-3, Higashi-Ikebukuro, Toshima-ku, Tokyo 170-8630, Japan
TEL.03（3971）6571 FAX.03（3590）7585
URL：https://www.mipro.or.jp/～Preparation for Startup～

The Mipro Guide to Starting a Business in Japan ～ Preparation for Startup ～外国人のための起業ガイドブック（起業準備編）外国人のための起業ガイドブック（起業準備編）MIPRO

To readers of this guidebook

The MIPRO Guide to Starting a Business in Japan describes what foreign nationals need to know
to start a business in Japan as a corporate manager (business owner). It comprises eight titles bytheme: “Preparation for Startup,” “Startup Q&A,” “Status of Residence,” “Obtaining Authorization,”“Drawing up a Business Plan,” “Tax Edition,” “Establishing a Company,” and “Public Insurance and
Employment Management.”
This edition on “Preparation for Startup” first explains the status of residence that is needed byforeign nationals to start a business, then outlines the process of establishing a company or office(general flow of the startup process). The subsequent sections describe each of the steps that need tobe taken, in chronological order. As you proceed through this edition, please refer to the other titles ofthis guidebook series as necessary for more details on each theme.
There are many organizations, institutions and associations that provide startup support in Japan(see “4. Institutions, associations and professionals to consult about starting or managing a business”
in “III. Reference Materials on Starting a Business”). Any time you need help, you feel stuck, or you
simply want a better idea, use these institutions to your benefit. We hope, by all means, you realize
your dream.

Written by: Masayuki SUEDA
Administrative Attorney/
SME Management Consultant

Manufactured Imports and Investment Promotion Organization (MIPRO)
March 2022

Table of Contents

I. Startup Process (General Flow) 

3

II. Procedures for Starting a Business 

6<Developing an Overall Vision>
1. Verify matters related to status of residence 
2. Develop a business concept 
3. Secure personal funds 
4. Enlist cooperators and create a strong network of connections <Planning the Details>
5. Formulate a marketing strategy 
6. Formulate a financing plan and a profit and loss plan 
7. Secure (locate) a place of business 
8. F ormulate a business plan (Business category, type of business, organizational structure, etc.) <Establishment Procedures, Startup Preparation>
9. Decide on a trade name, business name and trademark 
10. Apply for and obtain the necessary authorization 
11. Establish your company / Open an office 
12. File the necessary notifications with relevant public offices 
13. Officially launch your business 
14. Make the necessary tax payments 

III. Reference Materials on Starting a Business 
1. Items to consider when creating a business plan (example) 
2. Business startup plan (example) 
3. Loan application procedure 
4. I nstitutions, associations and professionals to consult about starting or managing a business 

6
7
8
10
13
14
14
15
23
24
25
32
36
36
38
38
39
41
42

I

Startup Process (General Flow)

The flow of starting a new business varies according to whether the new business will take the formof a sole proprietorship or a corporate organization. In the case of a corporate organization, the startup
process generally proceeds as follows.

Verify matters related to your status of residence

1

Check whether your current status of residence allows you to work or start abusiness in Japan. If you need to change your status of residence, prepare to apply
at the Immigration Services Agency. The procedure for starting a new business inJapan varies according to whether you have a status of residence, your current
status of residence, and the activities that are permitted within the scope of eachstatus of residence.

Give shape to your idea

2

Build on the idea you have in mind from the perspective of “what you wish toprovide to whom, and how” (develop a business concept), and explore its feasibility
as a business.

Create a business plan3

Based on the business concept you developed in step 2, carry out market
research, a survey of competitors, a SWOT analysis, and other such research, andformulate a business plan.

Register your company and start your business

4

After your articles of incorporation have been notarized, you have deposited therequired capital, registered your company, and have thus established your company,
you are ready to start your business. Within the specified period, file a notification ofincorporation (in the case of a sole proprietorship, file a notification of starting abusiness) along with other required documents to relevant tax affairs offices. If you
will be employing people, you also need to file specified notifications to relevant
employment and social insurance offices.
In addition to the above, if your business requires permission, authorization,
notification, registration or a license under relevant laws and regulations, apply at
the prefectural office, municipal office, public health center, police station, or otheradministrative agency, as necessary.** For some types of authorization, applications and notifications need to be filed before establishing a company or
starting a business. Consult with a competent administrative agency or other relevant institution as necessary as
you proceed with your startup. It is a good idea to promptly address each requirement as soon as preparations arecomplete, as some applications may take time to be processed.

3

The startup process can be summarized as shown below, by item in chronological order.
Figure 1

Startup timetable

Verify matters related tostatus of residence

Prepare to apply
for status ofresidence

Business plan

Develop a business concept

Create a business plan
• Business category,• Organizational
corporation,• Financing plan and• Marketing strategy

Fundprocurement

Secure personal funds

Status ofresidence

Negotiate with financial
institutions

Company
establishment

Secure (locate) aplace of business

Procedures required bygovernment offices

Enlist cooperators and createa strong network of connections4

Decide on a tradename, business nameand trademark

Apply and obtainstatus of residence

type of businessstructure <sole proprietorship,association, etc.>
profit and loss plan

Apply after paying theamount of required
capitalGet articles of incorporation notarized

START
YOUR
BUSINESS

Pay the amount of stated capitalCompany registration (Incorporation)

Apply for and obtain thenecessary authorization

File the necessary notifications with
relevant public offices(tax office, social insurance office, etc.)

5IIProcedures for Startinga Business

Developing an Overall Vision1

Verify matters related to status of residence

Foreign nationals planning to start a business in Japan fall under one of the two categories described
below. Since this guidebook pertains especially to foreign nationals who plan to start and manage abusiness on their own, the status of residence of “Business Manager” will be assumed in both cases.

(1) Foreign nationals residing in Japan who already have a status of residence of one type orother
a. “Permanent Resident,” “Spouse or Child of Japanese National,” “Spouse or Child of Permanent
Resident,” “Long-term Resident”
These statuses of residence place no restrictions on work activities, so foreign nationals who
have this status of residence do not need to change their status to start a business in Japan.
b. “Business Manager”
This is a status of residence for foreign nationals who are business managers, including those
who plan to start a business and engage in business activities as a corporate manager.
c. “Highly Skilled Professional”
Foreign nationals who have this status of residence may start a business associated with aprincipal activity, and they themselves may manage that business within its permitted scope.
d. “Startup Visa” (Designated Activities)“Designated foreign entrepreneurs” who do not satisfy the requirements for the status ofresidence of “Business Manager” may still enter and reside in Japan for up to a year to engage instartup preparation activities, by passing a screening by the local government where they plan tolocate their business and the Immigration Services Agency.
e. Statuses of residence other than the above
Foreign nationals having a status of residence other than the above who attempt to start abusiness in Japan without changing their status will be considered to be in violation of the law byengaging in an activity outside the scope of their status. To start a business in Japan, an
application for a change of status of residence should be made to promptly obtain a proper statusof residence.
(2) Foreign nationals acquiring a status of residence anew
To start a business in Japan, foreign nationals who fall under this category need to acquire astatus of residence which matches their purpose and which they are qualified to obtain, from among
the statuses listed in section (1) above. For foreign nationals residing overseas, the procedure for
applying for landing permission with the objective of starting a business in Japan varies dependingon whether they have a “Certificate of eligibility for resident status.” For details, refer to Figure 4(Flow of Landing Permission Procedures) on page 9 of the “Status of Residence” edition of thisguidebook series.

6

<Contacts for inquiries about status of residence>
Tokyo Regional Immigration Services Bureau
http://www.moj.go.jp/isa/support/fresc/fresc_2.1.html
TEL: 03-5363-3025 (for making a reservation)
Online reservation form
(Japanese) https://www12.webcas.net/form/pub/fresc/yoyaku-jpn(English) https://www12.webcas.net/form/pub/fresc/yoyaku-eng
FRESC : Foreign Residents Support Centre
Yotsuya Tower 13F, 1-6-1 Yotsuya, Shinjuku-ku, Tokyo 160-0004 Japan
http://www.moj.go.jp/isa/support/fresc/fresc01.html
https://www.moj.go.jp/isa/content/930006274.pdf
TEL: 03-5363-3013 Phone (via Navi-Dial nationwide service): 0570-011000
Supported languages: Japanese, English, Chinese, Korean, Vietnamese, Burmese, etc.
Immigration Information Center, Tokyo Regional Immigration Services Bureau
http://www.moj.go.jp/isa/consultation/center/index.html
https://www.isa.go.jp/en/index.html
TEL: 03-5796-7112 TEL (via Navi-Dial nationwide service): 0570-013904
Located in 11 prefectures throughout Japan

2

Develop a business concept

After you come up with a business idea, examine the feasibility of the idea and develop a businessconcept. The concept should define the following three elements.
1) Who to sell to (who are your customers?)
2) What to sell (what kind of products or services will you provide?)3) How to sell your products/services (how will you address customer needs?)
Of these three elements, the third will allow you to most differentiate your business from yourcompetitors. “What to sell” is certainly important, moreover “How to sell” is an element that has
extensive room for creativity. Keep your business concept simple and concise, however, as it willserve as a compass to direct your business into the future.

7

3

Secure personal funds

Funds needed to start a business can be roughly divided into “startup capital,” “working capital,”and “immediate living expenses.” Both sole proprietorships and corporations frequently experience
difficulty in receiving loans from private financial institutions, because they have small collateralvalue at the time of startup. Even if you are considering using public financing, it would be best tosecure as much personal funds as possible.
In most cases, foreign nationals planning to invest and engage in business in Japan need to obtainthe status of residence of “Business Manager,” but to obtain this status, they are required to invest asizable amount of money (a capital of 5 million yen or more, or a corresponding amount) incompliance with standards specified by ministerial ordinance based on the Immigration Control andRefugee Recognition Act.
Therefore, as soon as you decide to start a business, you should steadily save up personal funds. Asa rough estimate, you should prepare an amount equal to 30 to 50 percent of the total amount ofstartup capital you will need. Creditworthiness is difficult to establish at the outset of starting abusiness, but having a large proportion of personal funds will generally work to your advantage not
only when you borrow funds from financial institutions, but also when you are screened as a potential
tenant of an office or real estate property.** In screening applicants for the status of residence of “Business Manager,” loans from family
members are recognized as an investment toward the amount of required capital of 5 million yen
or more. However, when procuring funds from financial institutions, such as through startup
loans, loans from family members are generally not recognized as constituting a personal fund, asa rule. If so, the amount of loan you are able to receive may change and your financing plan may
go wrong. Thus, it is essential to have a sufficient amount of personal funds in this regard.
According to the “FY2020 Survey of Business Startups” (Japan Finance Corporation), personal
funds and loans from financial institutions together accounted for 91.4% of the total amount of
11.94 million yen in funds procured by new startups. Of this figure, personal funds accounting foran average of 2.66 million yen (22.3% of the average amount of funds procured) and loans fromfinancial institutions accounting for an average of 8.25 million yen (69.1% of the average amountof funds procured).
Figure 2

Distribution of startup costs
2018

2019

2020

20 million yen or more

12.1%

11.5%

10.8%

10 million or more and less than 20 million

19.5%

20.6%

18.2%

5 million or more and less than 10 million

31.0%

27.8%

27.3%

Less than 5 million

37.4%

40.1%

43.7%

(Note) The survey was conducted in July 2020 on 5,176 companies that received a loan from Japan
Finance Corporation's Micro Business and Individual Unit between April and September 2019,within a year of starting business (excluding real estate leasing businesses). Responses wereobtained from 1,597 companies (30.9％ response rate), including 61.6％ sole proprietorships
and 38.4％ corporate enterprises, in terms of management structure (at the time of startup).
Source▶

8

“FY2020 Survey of Business Startups” Japan Finance Corporation
https://www.jfc.go.jp/n/findings/pdf/topics_201119_1.pdf

Figure 3

Example of startup costs

1. Snack manufacturing and sales store
approx. 66m2 large
Item

2. Select bookshop 66m2 large

AmountItem

AmountStore rent

¥3,000,000

Initial investment in
store¥2,600,000

Interior finishing¥1,500,000

Vehicle and transport
equipment¥750,000

Furniture, fixtures andequipment¥3,000,000

Product procurement
expenses¥7,000,000

Advertising expenses¥500,000

Furniture, fixtures andequipment¥12,500,000

Training and education
expenses¥300,000

Advertising expenses¥500,000

Other¥100,000

Other¥150,000

Total¥8,400,000

Total¥23,500,000

Source▶

“Startup Guide by Industry / J-Net”
Organization for Small & Medium Enterprises and Regional Innovation, Japan
https://j-net21.smrj.go.jp/startup/guide/index.html

Related knowledge
When foreign nationals wish to start a business in Japan, their source of investment is notquestioned if they are a “Permanent Resident” or “Long-term Resident,” or if they have astatus of residence that places no restrictions on work activities. However, foreign nationals
with a status of residence other than the above must reveal their source of investment when
they are screened for a change in status of residence to “Business Manager.”Particularly if a foreign student makes a large investment to start a business in Japan, theirsource of funds becomes an important basis of judgment in the screening for a change instatus of residence, from the perspective of whether they have engaged in activities outside
the scope of their status of residence as “Student.” Even students who have obtained
permission to engage in activities outside the scope of their status of residence may only
engage in a maximum of 28 hours per week of part-time work. Therefore, if they are
deemed to have procured an amount of investment capital that cannot normally be obtained
within their allowed hours of work, they must be able to give a rational explanation, such asthat the money was provided as “financial support” from their parents, for example.

9

4

Enlist cooperators and create a strong network of connections

Once you make up your mind to start a business and define a general direction of your business,make maximum use of the network of connections you have made thus far to enlist cooperators whowill help you in realizing a smooth startup. Cooperators are not necessarily people who will have a
direct part in your business. Use the network of connections you have with people who could provide
you with relevant information and advice.
I am looking for investors and business partners who will invest in my business, andam seeking opportunities to have my business plan be heard by potential investors
and business partners. I also wish to know about exchange meetings, seminars andother such events that are hosted by public institutions.

1“Venture Plazas” are held throughout Japan as events where venture companies
can encounter potential investors and business partners. At these events, businesses
present their business plans and are introduced to investors and business partners
based on their plans. Inquire with the following for details on participating in a
Venture Plaza event.
Inquiries: Start-up and Venture Support Division, Business Support Department,
Organization for Small & Medium Enterprises and Regional Innovation, Japan
TEL : 03-5470-1574
Business Support Division in each Regional Head Officehttps://www.smrj.go.jp/regional_hq/index.html
https://www.smrj.go.jp/english/about/network.html
Hokkaido Regional Head Office(Sapporo city)

Hokuriku Regional Head Office(Kanazawa city)
Chugoku Regional Head Office(Hiroshima city)
Kyushu Regional Head Office(Fukuoka city)

Tohoku Regional Head Office(Sendai city)
Head Office /Kanto Regional Head Office(Minato-ku, Tokyo)

Okinawa Representative Office(Naha city)

Chubu Regional Head Office(Nagoya city)
Kinki Regional Head Office(Osaka city)
Shikoku Regional Head Office(Takamatsu city)

102Services related to starting a business are provided by local governments andvarious other organizations.
Tokyo Startup Station
https://startup-station.jp/
Tokyo Startup Station is a comprehensive startup support center operated by the
Tokyo Metropolitan Small and Medium Enterprise Support Center. It offers a variety ofservices that facilitate startups by people who live in Tokyo or who plan to start abusiness in Tokyo (talk events on starting a business, startup workshops, skills
improvement seminars, provision of advice on marketing strategies and formulating
business plans, consultation by lawyers, scriveners, and other professionals, etc.).
Tokyo One-Stop Business Establishment Center (TOSBEC)
https://www.startup-support.metro.tokyo.lg.jp/onestop/jp/
https://www.startup-support.metro.tokyo.lg.jp/onestop/en/
Tokyo One-Stop Business Establishment Center is a facility where all administrative
procedures required to establish a company or start a business (notarization of thearticles of incorporation, company registration, tax matters, pension and social
insurance matters, immigration matters) can be made in one place. In addition tooffering free advice on business startup procedures, advisors dispatched fromgovernmental agencies provide support up to the receiving of application forms.
Foreign entrepreneurs will also find the center useful, as it caters to electronic
applications and offers multilanguage translation services. Offices are located in
Akasaka, Shibuya and Marunouchi.
SME 119https://chusho119.go.jp/
SME 119 is a service where entrepreneurs can request the support of registeredexperts to help them solve any problems and issues they face (e.g.: “I want to start a
new business but don't know where to begin” “How do I procure funds?” “I wish toalso do business with overseas customers but don't have a track record” “I want toexpand my sales channels using IT” “I wish to utilize the IT introduction subsidy tointroduce IT tools”).
Startup cafes, etc.
Throughout Japan, local governments and organizations entrusted by local
governments provide forums for startup assistance, called by such names as “startup
cafes” and “startup labs.” They offer seminars and events on starting a business, freecounseling with relevant professionals on issues entrepreneurs face at different stages
in the startup process, among other such forms of support. Inquire with your local
government and use these forums to your advantage. Below are just some such forums
located across the country.
Okinawa: “Startup Lab Lagoon”
https://lagoon-koza.org/
https://lagoon-koza.org/english-page
Fukuoka: “STARTUP CAFE”
https://startupcafe.jp/
https://startupcafe.jp/en/top-en/
Okayama:“MOMOTARO STARTUP CAFE”
https://momosta.com/startup
Osaka: “STARTUP CAFE OSAKA”
https://startupcafe-ku.osaka/about/Tokyo(Shibuya): “Shibuya Startup Support”
https://shibuya-startup-support.jp/jp/
https://shibuya-startup-support.jp/

11In addition to the above, chambers of commerce and industry in each region also
host startup workshops and other similar events where participants can obtainknowledge needed to start a business, such as by attending lectures on startup
procedures, marketing, funds procurement, and tax strategies, and listening toentrepreneurs share their startup experience. By all means, look for and attend an eventthat suits your purpose. You may encounter people with the same aspirations as you
and perhaps be able to create a network of connections that could be helpful before andafter you start a business. Another good point about such events hosted by public
institutions is that they do not cost much to attend.

12Planning the Details

5

Formulate a marketing strategy

Formulate a marketing strategy by carrying out an analysis of your marketing environment and ananalysis of the management resources of your company (SWOT analysis).
Figure 4

Framework of a SWOT analysis
Strengths

Weaknesses

Opportunities

Strategy to seize market opportunities Strategy to seize market opportunities
and exhibit the strengths of your by conquering the weaknesses of yourcompany
company

Threats

Strategy to overcome market threats Strategy to confront market threats by
by leveraging the strengths of your conquering the weaknesses of yourcompany
company

Once you have identified the strengths, weaknesses, opportunities, and threats of your company,
define your business domain and explore marketing strategies in that domain.
Figure 5

From carrying out a SWOT analysis to formulating a strategy

Analyze your marketing environment

Analyze your company’s
management resources(demographic environment, politics & laws,
economy, society & culture, etc.)(human resources, properties, capital,
information, etc.)

Identify your opportunities and threats

Identify your strengths and weaknesses

Define your business domain

Formulate a marketing strategy

13

6

Formulate a financing plan and a profit and loss plan

Even if you have an idea and you also have human resources, you cannot commercialize that idea
without funds (compared to ideas and human resources, it generally costs more to procure goods andservices). You also need to create a financing plan and profit and loss plan carefully, so you do not losebusiness opportunities due to a lack of capital after commercialization.
For details, see “3) Startup financing plan” on p.16 and “4) Profit and loss plan” on p.19.

7

Secure (locate) a place of business

Under the standards specified by ministerial ordinance based on the Immigration Control andRefugee Recognition Act, activities permitted under the scope of the status of residence of “Business
Manager” are premised on having an office and engaging in business both in Japan. In other words,
when foreign nationals start a business in Japan, they must provide evidence that they have an officethat is to be used by their company, such as by means of a lease agreement or other document.
Furthermore, the office that is to be used exclusively for the business, outfitted with telephones, copy
machines, personal computers and other equipment normally indispensable for conducting business,must be located in Japan. Therefore, as soon as you decide to start a business in Japan, you should
secure a place of business.
You could perhaps lease a property that is temporarily made available as an office to support
business startups. Invest Japan Business Support Center (IBSC) operated by Japan External Trade
Organization (JETRO) offers such properties, and there are also incubation offices that provide a
temporary address or office. Although it depends on your business category and type of business, suchoffices are regarded as satisfying the requirements prescribed in the ministerial ordinance that provides
standards based on the Immigration Control and Refugee Recognition Act, under certain conditions.
Reference

14

I nvest Japan Business Support Center (IBSC)
https://www.jetro.go.jp/invest/jetros_support/ibsc/
https://www.jetro.go.jp/en/invest/

8

Formulate a business plan (Business category, type of business, organizational structure, etc.)

Once you have a clear idea of how you will procure funds and you have a good prospect ofrealizing your business, you need to formulate a business plan. A business plan outlines the concrete
actions that need to be taken to realize your idea; it gives specific shape to your vision.
(1) Formulation of a business plan
Figure 6

Example of items to consider when formulating a business plan

<Management team><People> <Personnel>

Business owner:
Will there be joint investors?
Manager:Will there be managing partners?

·W ill there be partners?
·H ow many employees (regular employees, part-time
employees, temporary workers) are needed?
<Qualification>·D oes everyone satisfy the required qualification andrequirements? Does a reason for disqualification apply
to anyone? etc.

<Money><Goods and services>· I nitial equipment funds·M onthly operating funds·P ersonal funds· F inancial assistance from family, etc.
·B
 orrowable amount from financial
institutions· I s a store or facility (office, factory, etc.) necessary?
·W hat facilities, materials, equipment are needed?
·A re the necessary conditions and requirements satisfied(by the facility, etc.)?
· I s renovation needed? etc.

A business plan normally consists of four elements: “business concept,” “business activities,”“startup financing plan,” and “profit and loss plan.” It not only serves as a compass to guide you as
you pursue your business; if you are applying for the status of residence of “Business Manager” tostart a business in Japan, it is an important element for judging whether your business satisfies theimportant requirement of business continuity. When starting a new business, your business plan mustbe specific, reasonable, and feasible.* If your business is presumed to fall through during your periodof residence in Japan, you will not be granted the status of residence of “Business Manager.”* The continuity and stability of your business plan is not simply determined by your amount ofstated capital, but comprehensively by also taking into consideration the revenue, profit rate,
number of employees, and office situation of your business. You should create a business plan not
only for your startup year, but for several years thereafter, and attach a trial balance sheet createdby a professional such as a tax accountant or a small and medium enterprise management
consultant.
Business plans also play an important role in judging your creditworthiness when you apply for aloan from a financial institution.* Thus, you should draw up an objective and convincing businessplan that any third party would easily understand and agree with. For reference, details on items toinclude in the business plan are outlined later under p.39, “ 2 Business startup plan (example).”* G enerally, it can be said that the higher the degree of completion of a business plan (theuniqueness, feasibility, certainty, profitability, continuity and other such features are presented ina convincing manner), the greater the rate of receiving not only loans from financial institutions,but also investments from other institutions and subsidies and grants from national and local
governments.
15

1) Business concept
1. Motivation for starting your business: Why do you want to start your business?
2. Overview of your business: What are your products or services?
To whom will you be providing them to?
How will you be providing them?
3. Market environment: Political, economic and social situations, market size, competitor status,
regulations, etc.
4. Goal: How do you wish to grow your business?
5. Obstacles and issues in achieving your goal
6. Responses and measures2) Business activities
Items to include in a business plan vary according to business category and type of business (below
is an example of a sales business).
1. Specific activities of your business: Elaborate on the “overview of your business” you definedin item 2 above in your business concept.
2. Selling points: P oints that would give you leverage in the market against competitors,
differences compared to other companies in the same business, differentiation
strategies, etc.
3. Purchasing plan: Can you procure the necessary quantity in a stable manner? Do you havealternative suppliers? etc.
4. Sales plan: Business area, envisioned number of customers, average spending per customer,
sales prospects, etc.
5. Facility/equipment plan: (Store) Region/location of store, rent
(Facility) P rocurement method (new purchase or lease?), interiorrenovation work, etc.
6. Personnel plan: Method of acquiring the necessary manpower, etc.
3) Startup financing plan
To start a business, you will need equipment funds (funds to secure a store and procure thenecessary facilities and equipment) and operating funds (for expenses such as the cost of purchasing
products, salaries, advertising expenses, and lease fees, immediate cash on hand, etc.). Calculate
specific figures for each expense item in reference to real estate property information, estimates frommultiple vendors, and other such documents. After you gain an overall estimate of the funds you will
need, proceed to creating a financing plan that includes how you will procure those funds.

16

Figure 7

Startup financing plan
Necessary funds
Item<Equipment funds>
1. Store, factory, etc.
(Breakdown) ×××
×××
×××
2. Facilities and equipment, etc.
(Breakdown) ×××
×××
×××<Operating funds>(Costs of purchasing thenecessary products for starting abusiness, payment of salaries,
payment of expenses, immediate
cash on hand, etc.)(Breakdown) ×××
×××
×××
Total Amount

Procurement method
AmountItem

Amount<Personal funds><Loans> (note 1)
1. Loans from parents, otherfamily members, relatives,
acquaintances, friends, etc.
(Breakdown & repayment
method)2. Loans from Japan FinanceCorporation (note 2)(Breakdown & repayment
method)3. Loans from private financial
institutions (note 3)(Breakdown & repayment
method)Total Amount(Note 1) 	Lenders can be grouped into three categories: (1) Parents and other family members,
relatives, acquaintances, friends, etc. (2) Japan Finance Corporation and (3) private financial
institutions. Generally, it becomes more difficult to receive loans in the order of (1) → (2) →(3). Private financial institutions frequently require collateral such as real estate. Therefore,
at the time of startup, you should make full use of startup support loans offered bygovernmental financial institutions and local governments.
(Note 2) 	Loans from Japan Finance Corporation require collateral or a guarantor as a rule, but some
programs offer loans without collateral and without a guarantor. Refer to the following site
for details.
Japan Finance Corporation ordinary loans
https://www.jfc.go.jp/n/finance/search/jiyusij_m.html(Note 3) 	If you lack sufficient creditworthiness for a loan from a private financial institution, you
might be able to receive a loan guarantee from a credit guarantee association. Refer to thefollowing for details.
Japan Federation of Credit Guarantee Corporations / Your First Loan and Credit Guarantee
https://www.zenshinhoren.or.jp/basic/
https://www.zenshinhoren.or.jp/english/

17

Related knowledge“Leasing as a form of fund procurement”
If you do not have a large sum of funds, leasing will allow you to install the necessary
facilities and equipment by paying a certain monthly lease fee, with the property that youlease as collateral. Therefore, even companies that face difficulty in receiving a bank loan
would probably find this system easy to use. Leasing also has the following advantages.
(Note, however, that you should choose the properties you lease carefully particularly if you
will be leasing them for a long period of time.)(1) Leasing does not require a large sum of money at once.
(2) Lease fees remain the same over the entire lease period, so it is easy to calculate costs
and create future investment plans.
(3) The total amount of lease fees that you pay during the lease period can be processed
as expenses over the term approved by the tax system.
(4) Computers, communications equipment, and other such devices that become outdated
at a fast rate can be replaced with the latest devices efficiently.
Figure 8

How leasing works

User(Customer)
2. Leaseagreement

Delivery ofequipment/facilities

1. Businessdiscussion

Lease company
Sales agreement

Supplier(Distributor)

Source▶ Information pamphlet on small leases “How to use small leases withoutworry – Points on preventing trouble” Japan Leasing Association
https://www.leasing.or.jp/leases/docs/keihatupam.pdf
Lease Contract
https://www.leasing.or.jp/english/studies/contract.html

184) Profit and loss plan
To gain a prospect on your business after startup, you need to create a profit and loss plan andcalculate your income and expenditure. There are apt to be many uncertain elements at the time ofstartup, so it is a good idea to create a plan divided into the initial startup period and the period after
your business gets on track.
Figure 9

Profit and loss plan (monthly)(Unit: ten thousands of yen)
InitialstartupperiodSales volume①

Cost of sales②

Gross profit (①-②)③

Period after
business gets on
track
around (mm) (yy)Remarks

Ratio of gross profit to sales(③/①×100)

Expenses

Personnel expenses
Interest expenses
Depreciation④

Other (rent, utilities, lease
expenses, etc.)

Total expenses⑤

Profit (③-⑤)⑥

Repayable amount (⑥＋④)⑦

Repayment of debt⑧

The concept of “salary” does not exist for sole proprietorships, so the money used by sole
proprietors may not be recorded as an expense under the name of “salary.” In the case of sole
proprietorships, “income after tax” becomes the proprietor's compensation, to be taken from the profit(⑥ above). In the case of corporations, the compensation of the corporate manager may be recorded
as an expense.
Depreciation is an expense that is not accompanied by a disbursement of cash. The amount ofmoney corresponding to the depreciation for each term is internally accumulated, and may beallocated as a source of fund for the repayment of debts (debt repayment source ＝ depreciation ＋
profit after tax). Profit and loss should be planned so that “repayment of debt” (⑧ above) is lower than
“repayable amount” (⑦ above).
Prospective income and expenditure＝ Repayable amount – Repayment of principal – (household expenses in the case of sole
proprietorships)
When starting a business, you need to gain a general idea of the amount of profit you will be aiming
to achieve and the necessary sales volume to secure that profit, in consideration of your own
compensation (household expenses if you are a sole proprietorship), employee salaries, personnel
expenses, office expenses, and repayments, among others.
Total estimated expenses ＋ Target profit＝ Necessary sales volume × Ratio of gross profit to sales
The following equation can be derived from the above:
Necessary sales volume ＝ (Total estimated expenses ＋ Target profit) / Ratio of gross profit to sales
19

If the necessary sales volume calculated using the above equation exceeds your prospective sales
volume, you need to review your investment plan and pro it and loss plan by (a) reducing yourinvestment amount, (b) expanding your personal funds, (c) securing a loan with a lower interest rate,(d) reducing expenses, or other such means. When doing so, it would be wise to avoid making any
upward revision of prospected sales volume unless you have a clear prospect.

(2) Deciding on a business structure
There are mainly two types of business structures–sole proprietorships and corporations. Which
you choose should be based on the category, type, size, future prospects of your business, and othersuch elements. You could also choose to start as a sole proprietorship, then transform to a
corporation (incorporation) when the right opportunity arises. Starting as a sole proprietorship cansave you the time, cost and expenses of going through legal procedures such as for registration. The
characteristics of the two types of business structures are shown below (details on types ofcorporations and establishment procedures will be provided later).

20

Figure 10

Characteristics of sole proprietorships and corporations
Sole proprietorship

Corporation

Startup procedures

A notification of starting a businesssimply needs to be filed with the tax
office.
Startup is relatively easy (note 1).

Cost of startup
procedures

Hardly any cost is involved.

In addition to filing a notification ofincorporation, the procedures forregistration of incorporation must becompleted.
Startup takes time and money (note 2).

Social credibility,
collection of funds

Loans from financial institutions are
difficult to obtain, and various
disadvantages are faced in business
transactions compared to corporations.

Loans from financial institutions areeasier to obtain, greater advantages
are enjoyed compared to sole
proprietorships.

Business activities

No restrictions, in principle.
Changes may be made after startup(change of business, withdrawal, etc.),
as desired.

Activities are restricted to thosespecified in the articles ofincorporation.

Scope of responsibility ofinvestors

The business owner bears full
responsibility (for both achievements
and failures).

The assets of the corporation andindividuals are separate, and investors
bear responsibility within the scopecorresponding to their share ofinvestment (note 3).

Compensation

The profits of the business equal thebusiness owner's compensation.

Compensation is paid as salary (note 4).

Difficulty of accountprocessing

The preparation of account ledgers and Account ledgers must be preparedfinancial statements is relatively easy
accurately in compliance with certain(simplified bookkeeping suffices).
requirements.

Taxation differences

Compared to corporations, tax
amounts may be curbed if income islow.

Compared to sole proprietorships,
expense items are wider ranging andcan bring tax advantages. If income
becomes high, tax can be curbed morethan sole proprietorships.

Transfer of funds between
business funds andhousehold expenses

Flexible (personal household expenses
may be transferred from businessfunds with a large degree of flexibility)

No (transfer of funds is not allowed)

Social insurance (note 5)

Businesses must enroll in National
Health Insurance and the National
Pension System (the business owner
may not enroll in governmentmanaged health insurance or welfare
pension insurance).

Members of the board, as a rule, enroll
in government-managed healthinsurance and welfare pension
insurance.

Securing personnel

Personnel are generally difficult tosecure, although it depends on thewelfare environment of the business.

Personnel can be more easily secured
compared to sole proprietorships,
because corporations are required toprovide social insurance and labor
insurance.

(Note 1) 	Sole proprietorships that do not file a notification of starting a business will face various inconveniencesand disadvantages. For example, they cannot (1) receive special deduction under the blue tax return, (2)open a bank account in the trade name of their business, or (3) enroll in the small enterprise mutual aid
plan (Corporate employees who wish to start a business as a side job must also file the notification if theyplan to conduct their business on a continuous basis). There is no penalty for not filing the notification, butfiling the notification is a requirement.
(Note 2) 	Statutory costs related to establishing a company (in the case of a stock company (Kabushiki-Kaisha) witha capital of 10 million yen)	Fee for notarization of the articles of incorporation: 50,000 yen
Revenue stamp fee: 4 0,000 yen (not required for electronic articles of incorporation)
Fee for obtaining a copy of the articles of incorporation: 250 yen/page × no. of pages(required for registration of incorporation)
Registration and license tax: 150,000 yen (required at the time of registration of incorporation)

21

(Note 3) 	Provided that, if the representative is a joint guarantor, he/she bears responsibility as a guarantor.
Additionally, in a general partnership company (Gomei-Kaisha) or limited partnership company (GoshiKaisha), members with unlimited liability have the responsibility to repay the company's debts regardlessof their amount of investment.
(Note 4) 	Compensations to board members may be recorded under expenses as personnel expenses. (Reference:
Unlike corporations, a sole proprietor's compensation may not be recorded as an expense.)(Note 5) 	Board members of a corporation, or sole proprietorships employing five or more employees, must enroll in
health insurance or welfare pension insurance, as a rule, if they receive compensation for their service(they must also enroll in long-term care insurance if they are ages 40 to 64.)

Related knowledge
The status of residence of “Business Manager” and onsite operations
In the case of “one-person companies” in which a single person invests and starts abusiness in Japan and engages in the business alone, the person having the status ofresidence of “Business Manager” necessarily undertakes multiples roles, but it should be
noted that their principal duty must be to engage in activities as a business manager. For
example, say a chef-owner of a restaurant who has the status of residence of “Business
Manager” engages in cooking operations. Cooking would not be regarded as an activity
outside the scope of his status of residence if he continues to engage in it as a secondary
activity. However, since his main activity is to engage in business as a business manager as
defined by his status of residence, he may be judged as not satisfying the requirements of his
status of residence unless he employs a cook to work at his restaurant. This is because in a
restaurant where the owner is the chef, the owner is apt to spend most of the day attending
to his activities as a chef and not as a manager. The number of cooks he needs depends on
the size of his restaurant. The same is true of owners of barbershops, beauty salons, nailsalons and the like.

22

Establishment Procedures, Startup Preparation

9

Decide on a trade name, business name and trademark

Decide on a trade name, business name, and trademark for your company, as necessary.
1) Trade name (yago)
Trade names are names by which sole proprietorships conduct business (such as Office ABC, XYZ
Planning Company, etc.). It corresponds to the company name in the case of corporations. Sole
proprietorships may give their company any desired trade name, but the name does not have any legal
effect. Unlike business names that registered corporations are required to register, sole proprietorships
may choose not to have a trade name. At the same time, however, sole proprietorships that have a
trade name are more likely to gain trust, because only businesses that officially file a notification ofstarting a business as a sole proprietorship to the tax office may possess a trade name (the “trade
name” field on the notification may be left blank). Having a trade name is also convenient to businessowners who wish to manage their business funds and personal money separately, because they can
open an account at a financial institution under a name that combines their trade name and personalname (bank accounts for sole proprietorships cannot be opened under their trade name alone).
2) Business name (shogo)Business names are official names of companies registered with the Legal Affairs Bureau. Stockcompanies (Kabushiki-Kaisha) are required to have and register a business name. Sole proprietorships,
on the other hand, are free to choose whether or not to use a business name or to register that businessname. A business name cannot be registered if another company in the registry already uses that nameat the same address (Commercial Registration Act, Article 27). Thus, you need to conduct a priorbusiness name search at the competent Legal Affairs Bureau before registering your company.** A search of business names can be performed easily by using the Ministry of Justice's online
registration information search service.
“Business Name Search Using the Online Registered Information Search Service” Ministry ofJustice
http://www.moj.go.jp/MINJI/minji06_00076.html
3) Trademark (shohyo)
Trademarks are symbols (identification marks) that businesses use to distinguish their products andservices from other businesses (companies). Such marks and names of products and services areprotected as assets by an intellectual property right called trademark right.
There are mainly two benefits of acquiring a trademark right.
(1) You can continue to use the trademark as your own without any worry of troubles.
(2) You can prevent others from using your registered trademark or a similar trademark.
Trademark rights are granted on a first-come-first-served basis. In the case of similar trademarks,
the trademark that is filed first is registered first, as a rule. Thus, as soon as you have a trademark you
want to use for your products or services, you should promptly file an application for trademark
registration.
Inquiries: Planning and Research Office, Trademark Division, Trademark and Customer Relations
Department, Japan Patent Office
TEL: 03-3581-1101 Extension: 2805 Fax : 03-3588-8503
https://www.jpo.go.jp/faq/list.html

23

10 Apply for and obtain the necessary authorization
To start a business, authorization or a license may be required, depending on your businesscategory. Normally, the necessary procedures are to be made at the competent administrative agency
after your registration of incorporation is processed, but for some types of authorization, procedures
need to be completed before that. Since it might take time to apply and obtain the necessary
authorization, you should check the relevant requirements and procedures in advance and otherwise
make preparations by planning backward to make it in time for your scheduled start of business.
Figure 11

Types of authorization

Type ofauthorization

Description

Where to apply

Relevant businesses

Notification

Simply requires certain items to be
Public healthnotified to the relevant
centeradministrative agency.

Hairdressing salon,
dry cleaning

Registration

An application must be filed withthe relevant administrative
agency, and the businessregistered in a designated register(public record).

Prefecture, etc.

Travel,Money lending

Regional
Transport Bureau

Taxi

Permission

Businesses that are basically not
permitted but may operate if anapplication is filed with therelative administrative agency anda screening is passed.

Ministry of Land,
Infrastructure
and Transport,
etc.

Construction

Public healthcenterEating and drinking
establishment

Prefecture, etc.

Hotel

Tax office

Liquor manufacturing,
Liquor sales

Prefecture, etc.

Real estate

Approval

LicenseBusinesses may operate if anapplication is filed with therelevant administrative agency
and specified requirements are
satisfied.
Businesses may operate if an
individual possessing a designatedqualification files an application
with the relevant administrative
agency and specified
requirements are satisfied.

(Note) The application office may differ according to the region where the business will be started.

24

11 Establish your company / Open an office
You are now ready to begin the procedures for starting your business. If you are starting yourbusiness as a corporate structure, you need to complete the procedure for establishing a company. At
present, there are four corporate structures prescribed by the Companies Act. They include thefollowing: (1) stock company (Kabushiki-Kaisha), (2) limited liability company (Godo-Kaisha), (3)limited partnership company (Goshi-Kaisha), and (4) general partnership company (Gomei-Kaisha).
Of these four corporate structures, (2), (3) and (4) are collectively called membership companies. The
differences between a stock company (Kabushiki-Kaisha) and membership company lie in their
method of funds procurement, size of the company, management method, responsibility of members,
among others. Although they are all referred to as “companies,” stock companies (Kabushiki-Kaisha)and membership companies are distinguished from each other because they operate by a completely
different system.
Here, particular focus will be placed on the procedure for establishing a stock company (KabushikiKaisha).
Figure 12

Flow of establishing a company

Stock company (Kabushiki-Kaisha)

Membership company

Decide on an incorporator

Decide on members (investors)

Registry office having jurisdiction overConduct a prior search of business names → the planned location of the head office
Same business names cannot be registered under the same address. Therefore, conduct a prior search of businessnames at the registry office having jurisdiction over the (planned) location of your head office.

Decide on basic matters of your company

Business name (company name), objectives (business activities), location of the head office,amount of capital (investment), etc.

Create a company representative’s seal and obtain the seal certificates of all relevant individuals
Create the articles of incorporation
Have the articles of incorporation
notarized → Notary public office(Articles of incorporation do not need to be notarized)

Pay the amount of stated capital (investment), prepare a copy of the bankbook
Apply for registration of incorporation → Registry office having jurisdiction over
the address of the head office
Registration is completed (the company is established)
File the necessary notifications with the tax office and other public offices

Source▶ “FY2020 Startup Guidebook” Tokyo Chamber of Commerce and Industry
251) Decide on an incorporator (in the case of a stock company (Kabushiki-Kaisha))
The incorporator is the founder of the business, and becomes a shareholder after establishing thecompany. If a single individual invests in a business, that investor becomes the incorporator,
possessing all shares of the company after its establishment. If multiple people invest in a business,they all become an incorporator, and after establishing their company, they respectively exercise theirvoting right in proportion to their investment. Incorporators are mainly responsible for engaging instartup preparations, including (1) deciding on the general profile of the company, (2) creating thearticles of incorporation, (3) depositing the required capital (investment), and (4) completing
incorporation procedures.
2) Conduct a prior search of business names
See “ 9 Decide on a trade name, business name, and trademark” on p.23.
3) Decide on basic matters of your company
The basic matters of a company comprise the following six minimum required matters that need to
be specified in the articles of incorporation and among the registered matters of the company.
a) Business name (company name)
A business name may be decided freely within the scope of rules prescribed in the Commercial
Registration Act. It is a good idea to decide on a name that gives a general idea of the type and content
of the business. When a sole proprietorship is transformed to a corporation, it may continue to use its
trade name as a business name.
b) Business objectives (business activities)
The objectives of a business must display legal compliance (they do not go against laws andregulations or against public order and morals), profitability (they aim to produce profit), and clarity(they are written in layman's terms). A shortcut to writing business objectives in proper detail is torefer to the business objectives* of other companies in the same business that are already registered in
the company registry. Companies may not engage in businesses that are not specified in their businessobjectives, so if there are any businesses you may want to pursue in the future, you should include
them in the business objectives at the outstart. In practice, the phrase “All businesses incidental or
related to the foregoing items” is frequently added to the end of the list of business objectives.
* Anyone may obtain the certificate of registered matters (certified copy of registration) of any
company by applying at a relevant Legal Affairs Bureau or registry office.
c) Amount of capital (investment)
The enforcement of the Companies Act in 2006 has made it possible to establish a stock company(Kabushiki-Kaisha) with a capital of merely 1 yen. This substantially low capital requirement has
lowered the bar for many businesses, but it could also work as a disadvantage in conducting business.
For example, if a company has only a small amount of capital, it may not be able to secure sufficient
operating funds. Furthermore, it might make financial institutions wary to pass a company through ascreening, or raise the suspicion that the company is a shell company. It should also be noted that theminimum amount of required capital differs for some types of businesses requiring authorization (e.g.,in the case of a fee-charging employment referral business, a capital of 5 million yen or more isrequired at the time of startup).
The minimum amount of required capital for your company should be calculated based on yourinitial financing plan (operating funds ＋ equipment funds ＝ amount of investment (capital) ＋loans). Although the amount of capital that is needed depends on your company's business activities, itis necessary to secure enough budget to keep the company running even if no sales is made over acertain length of time, since profits cannot necessarily be expected immediately after commencing
business.
Besides cash, properties may also be contributed as an investment (contributions in kind), andintangible fixed assets such as patent rights may also be contributed in kind.

26d) Institutional design
A company is governed by various decision-making and business execution institutions. For
example, they may include an executive board composed of directors and auditors, a general meetingof shareholders, and a board of directors. Deciding how many people to assign to each institution iscalled “institutional design.” An institutional design is mandatory for stock companies (KabushikiKaisha) but optional for membership companies, who may prescribe such matters in the articles ofincorporation (institutional autonomy).
Figure 13

Major institutions and their roles

Institution

Role

General meetingof shareholders

Highest decision-making body of the company.
Composed of shareholders.

Directors

Responsible for executing the company's business (management,
operations).

Board of directors*

Responsible for giving approval to the execution of the company's
business. Supervises the business execution by directors.

Auditors*

Audits the operations of the directors and accounting advisors.

* Installation of these institutions is optional, in principle.
The institutional design of a company is determined by the size of the company and whether it is a
publicly listed company. For the small and medium companies, which are not “large company”
prescribed in the Company Act, the institutional design is almost patterned and generally similar
among them. For example, those started by one or two people usually have a general meeting ofshareholders and directors.
e) Business year (date of establishment, accounting period)
A company's date of establishment and accounting period may be decided freely. However, theaccounting period has a bearing on the tax payment date and tax amounts, so it should be decided inconsideration of expected busy periods, tax reduction strategies, and cash flow management. Once anaccounting period is decided, the company's date of establishment is generally decided so that it is as
close to but no more than a year before the first accounting period (e.g., if the accounting period is in
March, the date of establishment should be within April).
In the case of sole proprietorships, the calendar year automatically becomes the business year (e.g.,even if a company is founded in April 2021, January to December 2021 constitutes its first year,
January to December 2022 its second year, and so on).
f) Location of the head office
When registering a company, the address of the company to be written in the articles ofincorporation (head office location) may be either i) a home address or ii) an office address. The
address does not need to be the location where business activities will actually be conducted.
Note the following points if you are registering your company under your home address.
1. If the lease agreement allows the use of your home property for residential use only, you need tonegotiate with the owner or management company of your house in advance.
2.Documents and notices from the tax office, pension office and other administrative offices will besent to the address under which your company is registered. If you live in a residential complex andregister your address only up to the lot number (banchi) and not up to your room number, these
documents may not reach you properly. The same problem will occur if your registered address
differs from the address of the office where business activities are actually conducted.
274) Create a company representative's seal and obtain the seal certificates of all incorporators
Seals need to be created before you commence the procedures for company registration andincorporation and before launching operations after establishing your company.* An officiallyregistered company seal (company representative's seal) suffices to establish a company, but normally,a bank seal, square company seal and rubber stamp (address stamp) are also created at the same time.
Additionally, the incorporator's seal and seal certificate should be prepared in advance, as they will
become necessary when you have your articles of incorporation notarized. Note, however, that theterm of validity of a seal certificate issued for this purpose is three months from the date of issuance.
* In Japan, it is common practice to affix a personal seal or company seal to documents that expressa decision made by the individual or company. A variety of seals is used in business practices.
They include the officially registered seal (officially registered personal seal, officially registeredcompany seal), bank seal (personal bank seal, company bank seal), approval seal, officer's seal
(seals with an imprint showing the name of a corporate position, such as the representative
director's seal, general manager's seal, etc.), and square company seal (seal showing thecompany's name; equivalent to a company approval seal).
Of these different types of seals, the officially registered personal seal is a seal for which an
application for registration has been filed and approved by the municipal office where the seal holder
is registered as a resident. The officially registered company seal is a seal for which a notification ismade at the Legal Affairs Bureau having jurisdiction over the company's head office address. It is also
called a company representative's seal. The bank seal is a seal that is filed with the bank, and is used
when making cash transactions (withdrawal, remittance, issuance of bills and checks, etc.).
5) Create articles of incorporation and have them notarized (in the case of a stock company(Kabushiki-Kaisha))
Articles of incorporation are the basic rules for the operations of a company (business name,business objectives, head office location, organizational structure, amount of capital, etc.). They are
created by the incorporator in the case of a stock company (Kabushiki-Kaisha), and take effect only
after they are notarized by a notary public at a notary public office. The detailed process is as follows.
i) 	Decide on the basic rules of the company.
ii) 	Create officially registered seals for all incorporators and obtain their seal certificates.
iii) 	Draft the articles of incorporation (original articles of incorporation) upon agreement by allincorporators.
iv) 	Have the articles of incorporation checked at a notary public office.
v) 	Have the articles of incorporation notarized by a notary public at a notary public office. As arule, all incorporators need to be present at the notary public office when applying fornotarization. In practice, however, a proxy may be assigned from among the incorporators. The
notary public office should be an office located in the same prefecture as the location of thecompany (head office location).
vi) 	Obtain a certified copy of the articles of incorporation.
Articles of incorporation provide three types of information.
<Necessary provisions>
Necessary provisions consist of the following five items (without which the articles of incorporation
are not valid).
a) Objectivesb) Business namec) Location of head officed) The value of assets contributed at the time of establishment or the lower limit thereofe) Name and address of each incorporator<Relative provisions> (examples)
Relative provisions do not need to be specified for the articles of incorporation to be valid, but need
to be specified for the articles to have legal effect.
a) 	Provisions concerning contributions in kind	Unless specified in the articles of incorporation, provisions concerning contributions in kind
will not have legal effect, so if you are establishing your company with contributions other thanmoney, make sure you specify provisions for contributions in kind.
b) 	Provisions concerning the term of directors
	 Unless specified in the articles of incorporation, the term of directors is two years by regulation,
and an election of officers and an application of registration must be made every two years.

28c) Provisions concerning restrictions on the transfer of shares	 Example statement: “The transfer of shares of our company requires the approval of the general
meeting of shareholders.”	 Unless specified in the articles of incorporation, shares may be transferred without anyone's
approval.
<Optional provisions> (examples)
Optional provisions may or may not be specified in the articles of incorporation. Note thatprovisions that go against laws or public order and morals may not be specified.
a) Number of board membersb) Names of board membersc) Business year	 The business year of the company becomes explicit by specifying it in the articles ofincorporation.
d)	Method of public notice (by publication either in the Official Gazette, a daily newspaper, or byelectronic means)
Reference

“List of notary public offices” Japan National Notaries Association
http://www.koshonin.gr.jp/list

6) Pay the amount of stated capital
After your articles of incorporation are notarized, you need to pay the amount of stated capital. As
your company does not exist yet at this point (an account cannot be opened in the name of thecompany), the capital should be paid into the personal account of the incorporator, unless particular
circumstances exist.
The following points should be heeded when paying the amount of stated capital.
· Make the deposit or transfer in the name of the incorporator.
· The payment date should be the date on which the articles of incorporation have been notarized ora later date. Any balance that has been in the incorporator's personal bank account since before
notarization of the articles of incorporation is not accepted as a payment of stated capital, so if abalance exists, it should be withdrawn once and re-deposited.
· The amount to be paid into the account should be the same amount as the amount of stated capital.
· I f there is more than one incorporator, the payment may be made in one of the following two ways.
-Decide on a representative incorporator and have the other incorporators pay their share into therepresentative's personal account.
-Have each incorporator pay their share into their own personal account, and bind the copies of
the relevant pages of each bankbook (the cover, the page following the cover page, the page thatshows the deposit). If an online bank is used, print the online transaction screen where thenecessary information is shown. Careful attention is needed if a daily transfer limit has been set
when opening an online bank account.
<In the case where a foreign national not residing in Japan is establishing a company in Japan>
If no incorporator resides in Japan, it may be difficult to open an account at a financial institution in
Japan when the time comes to pay the amount of stated capital. However, pursuant to a Notice by the
Director-General of the Civil Affairs Bureau, Ministry of Justice (Ministry of Justice, Civil Affairs
Bureau, Commercial Affairs Division No. 41) dated March 17, 2017, it has become possible forforeign nationals establishing a company in Japan to transfer their amount of stated capital to theaccount of a third party who possesses a bank account in Japan. In this case, the third party mustreceive a power of attorney concerning the receiving of the stated capital from the incorporator.
Notice by the Director-General of the Civil Affairs Bureau, Ministry of Justice (Ministry of Justice,
Civil Affairs Bureau, Commercial Affairs Division No. 41)
http://www.moj.go.jp/content/001220721.pdf

297) Apply for registration of incorporation and register your company (incorporation)
Apply for registration by filing the necessary application documents with the Legal Affairs Bureau
within two weeks of paying the amount of stated capital. They may be filed either online, by mail, orin person. Normally, it takes from a week to ten days for the registration to be completed.
The completion date may be confirmed at the service counter at the Legal Affairs Bureau.
In the case of Tokyo, see the URL below.
http://houmukyoku.moj.go.jp/tokyo/category_00019.html
A company is thus established.
Reference“ Procedures of commercial and corporation registration for foreign nationals andexpatriates” Ministry of Justice
http://www.moj.go.jp/ENGLISH/m_minji06_00004.html

Related knowledge
Which to choose:
A stock company (Kabushiki-Kaisha) or membership company?
A membership company is a category of companies as is a stock company (KabushikiKaisha), and is a collective term for limited liability companies (Godo-Kaisha), limited
partnership companies (Goshi-Kaisha) and general partnership companies (Gomei-Kaisha),as mentioned earlier. The process of establishing a membership company and stockcompany (Kabushiki-Kaisha) is the same, beginning with the creation of the articles ofincorporation and ending with the registration of incorporation at the Legal Affairs Bureau.
However, the articles of incorporation must be notarized in the case of a stock company(Kabushiki-Kaisha) but not for membership companies (Companies Act, Article 30).
Figure 14

Process from creating the articles of incorporation to establishing a company
Stock company(Kabushiki-Kaisha)

Membership company

Creation of articles
of incorporation

Creation of articles
of incorporation

Notarization of articles
of incorporation

30

Registrationof incorporation

Registrationof incorporation

Establishmentof the company

Establishmentof the company

Figure 15

Differences between a stock company (Kabushiki-Kaisha) and membership company
Membership company
Stock company(KabushikiKaisha)

Number of people needed toestablish a company
Name used to refer toinvestors
Scope of responsibilityof investors

Highest decision-making
process

1

Limited liability
company(Godo-Kaisha)

Limited partnershipcompany(Goshi-Kaisha)

Generalpartnershipcompany(Gomei-Kaisha)

1

2

1

Shareholder

LimitedMemberLimitedUnlimited(member with unlimited liability)
Limited(member with limited liability)

Unlimited

Resolution by thegeneral meeting ofshareholders

No restrictions, in principle.
Agreement by all members, with regard to important matters

Fee for notarizationof articles of incorporation※

50,000 yen

Notarization not required

Revenue stamp for articles ofincorporation

40,000 yen

40,000 yen

150,000 yen

60,000 yen

Proportionate to
the amount ofinvestment

May be freely specified in the articles of incorporation

Registration and license tax※※
Profit sharing※
To be partially lowered from January, 2022※※ Minimum taxable amountIn contrast to a stock company (Kabushiki-Kaisha), which is operated based on the principle ofshareholder equality upon widely seeking investments from investors, a membership company is a typeof company that respects the internal autonomy of the organization. It is suited to small companies, as itis premised on a system that assumes the investors will become managers.
The major characteristics of a membership company are as follows.
1. Internal organizational rules may be flexibly established, such that a rule can be established, forexample, for sharing profits in proportion to the degree of contribution of each investor rather thanon their amount of investment (allotment of voting rights and dividends as desired irrespective ofinvestment amounts).
2. When establishing a company, a stock company (Kabushiki-Kaisha) requires an incorporator andshareholder, but a membership company does not. Therefore, it is not necessary to specify
provisions concerning the issuance of shares or the general meeting of shareholders in the articles
of incorporation.
3. The articles of incorporation are not required to be notarized, so no notarization fee needs to be
paid. Additionally, the minimum cost of registration and license tax that is required when registering
the company is smaller compared to a stock company (Kabushiki-Kaisha). Therefore, less time andmoney are needed.
A disadvantage of a membership company is that conflicts of views among investors may lead tomatters going out of control, because important matters (changes in the articles of incorporation,transformation to a stock company, etc.) require the approval of all investors. Another is that trouble
might occur regarding the treatment of investors' degree of contribution such as when dividing the profit,
because voting rights and dividends may be decided freely.
Additionally, in the case of members with unlimited liability, any debts that remain in the event thecompany goes bankrupt must be repaid using the personal assets of each member.
The decision to establish a stock company (Kabushiki-Kaisha) or membership company must be wellthought out when establishing a company. From the perspective of growing a company, a stock company(Kabushiki-Kaisha) might perhaps be the better choice; from the perspective of achieving flexible
management, a membership company might perhaps be the better choice. In addition to the advantages
and disadvantages of each, it is also important to fully consider all relevant matters and decide which
type of company would be best to achieve your goals.

3112 File the necessary notifications with relevant public offices
Documents that must be filed with relevant public offices after establishing a company vary bybusiness category and type of business. However, roughly speaking, they are divided into documents
related to tax affairs, employment affairs and authorization affairs. The main notifications are as
follows (for information on authorization matters, see p.24, “ 10 Apply for and obtain the necessary
authorization”). Plan wisely so that all required notifications are filed within their deadline.
Figure 16

Notifications required for starting a business(Tax affairs)

Sole proprietorship

Relevant office

Deadline for filingnotification/application

Remarks

Notification of starting abusiness· W ithin 1 month after starting abusiness

Notification of theestablishment of a salarypaying office· Within 1 month from the date ofestablishment of a salary-paying · Necessary when employing personnel*
officeApplication to file the blue
tax return· By March 15 of the year in which
the blue tax return will be filed forthe first time
· When filing the blue tax return for the first· Within 2 months from the date of time
startup if the business has been
started after January 16

Notification for valuation of
inventories· By the deadline for filing the final
tax return for the year in which thebusiness was started· T h e l a s t p u rc h a s e p r i ce m e t h o d i sassumed if the notification is not filed.

Notification for depreciation
method of depreciable fixed
assets· By the deadline for filing the final
tax return for the year in which thebusiness was started· The straight-line depreciation method isassumed if the notification is not filed.
· P rovided that, only the straight-line
depreciation method is approved forbuildings acquired after April 1, 1998 andfor facilities attached to buildings andarchitecture acquired after April 1, 2016.

Notification ofcommencement of businessactivities· Within 15 days from the date ofstarting business

Competent tax
officeTokyo
metropolitan tax
office(and thecompetent tax
office if outside
the 23 wards ofTokyo)

32

Notification/application

Relevant office

Notification/application

Deadline for filingnotification/application

Remarks

Notification of incorporation· Within 2 months from the date ofincorporation· A copy of the articles of incorporation andother specified documents must be
attached.

Notification of theestablishment of a salarypaying office· Within a month from the date ofincorporation

Application to file the blue
tax return· By the day before the date on
which 3 months have passed since
the date of incorporation or the
final date of the business year,
whichever comes first· When filing the blue tax return for the firsttime

Notification for valuation of
inventories· By the deadline for filing the final
tax return for the first year afterincorporation· The last purchase price method isassumed if the notification is not filed.

Notification for depreciation
method of depreciable fixed
assets· By the deadline for filing the final
tax return for the first year afterincorporation· The Declining balance depreciation
method is assumed if the notification is
not filed.
· P rovided that, only the straight-line
depreciation method is approved forbuildings acquired after April 1, 1998 andfor facilities attached to buildings andarchitecture acquired after April 1, 2016.

Notification of establishment
or installation of acorporation· Within 15 days from the date ofincorporation· A copy of the articles of incorporation andcertified copy of the register must be
attached.

Corporation

Competent tax
officeTokyo
metropolitan tax
office(and thecompetent tax
office andmunicipal office
if outside the 23
wards of Tokyo)* If the company is one that pays a salary or other compensation to less than ten people receiving salaries on a regular basis, an exceptional measure is available
that allows the company to pay withholding tax on two occasions a year.

(Employment and social insurance affairs)
Relevant office

Notification/application

Deadline for filingnotification/application□Health insurance,
employees’ pension
insurance
Pension office①Notification for new
application②Notification for acquisitionof qualification③Notification of insured· Within 5 days from the dateof signing an employment
contract

Publicemployment
office①Notification of
establishment of industrial
Labor Standards
Inspection Officeaccident insurance
affiliation②Declaration of estimatedinsurance premium③Report of registration ofenrolled business· Enrollment is compulsory for all corporate
businesses.
· In the case of sole proprietorships, enrollment iscompulsory for businesses employing 5 or more
people on a regular basis (except for drinking &eating establishment businesses, leisure businesses,
service businesses, etc.), but voluntary forbusinesses employing less than 5 people.
·③
 applies to relevant businesses only.

person’s dependents□Employment insurance①Notification of installationof a business enrolled in
employment insurance②Notification for acquisitionof qualification

Remarks①Within 10 days after
becoming an enrolled
business②By the 10th day of themonth following the monthin which personnel havebeen employed①Within 10 days after
becoming an enrolled
business②Within 50 days after
becoming an enrolled
business· Both sole proprietorships and corporations must
enroll in employment insurance if they have one ormore regular employees.

· Both sole proprietorships and corporations must
enroll in industrial accident insurance if they haveone or more regular employees.

③Within a reasonable time

Source▶ “FY2020 Startup Guidebook” Tokyo Chamber of Commerce and Industry
33

Related knowledge
Simplifying and streamlining administrative procedures
In May 2021, a number of new laws were established in Japan to promote a digital society, including
the Basic Act on Forming a Digital Society, which prescribes basic principles for the realization of adigital society, and the Act on the Establishment of the Digital Agency, which stipulates the installationof a Digital Agency as the control center for nationwide information systems. The Digital Agency wasestablished as a symbol of digital reforms in September 2021, and changes to increase the efficiency ofadministrative services were accelerated.
In conjunction with recommendations to introduce remote working as a measure to prevent infection
by COVID-19, there are now moves to review the principle of documentation (provision of online
procedures) in administrative services and to completely eliminate the use of the approval seal.
If seals no longer need to be used, documents could be approved electronically using a computer andsent directly from the computer as an attachment to an email, or the administrative side could takeadvantage of the features of electronic data to tally or aggregate the data automatically. The eliminationof seals is thus expected to make a significant contribution to simplifying and streamlining administrative
procedures.
The following are some examples of how administrative procedures may be simplified andstreamlined.
1. Introduction of an online application system for status of residence
From July 25, 2019, it has become possible to apply for status of residence around the clock onlinefrom an office or other location without making a visit to a regional office of the Immigration Services
Agency (when using the online service for the first time, however, the required documents must be sent
by mail to the regional branch office of the Immigration Services Agency that has jurisdiction over theapplicant's address).
The online system may be used to apply for the following.
Source▶ “FAQ about the ‘Immigration Services Agency e-Notification System'”https://www.moj.go.jp/isa/content/930001416.pdfa) Application for certificate of eligibilityb) Application for change of status of residencec) Application for renewal of status of residenced) Application for acquisition of status of residencee) Application for certificate of authorized employmentf) Application for re-entry permit, together with b), c) and d)g)	Application for permission to engage in activities outside the scope of a resident status, together
with b), c) and d)
2. Option of submitting a seal impression for commercial registration
The online application system for commercial registration began on February 14, 2011, but the system
is presently used in combination with applications on paper. The system may be used to apply forregistration (including commissioning of registration), to file a notification of submitting or abolishing aseal registration, and to request a digital seal certificate.
From February 15, 2021, it has become unnecessary to submit a seal impression with the registry
office when applying for registration online (when filing an application for registration on paper,
however, the seal registered with the registry office must be affixed to the application form, so a seal
impression must be submitted as before).
34

Figure 17

Online application procedure for commercial registration
Conventional system

Registrationof sealimpression㊞(seal)

A seal impression needed tobe submitted whenestablishing a company/
corporation

From Feb. 15, 2021
A seal impression may or may
not be submitted when
applying for company registra(seal)tion online!

Registrationof sealimpression㊞* A seal impression must be submitted
as before when applying on paper.

When submitting a seal impression at the same time as applying for company registration online
Application form
Attached documents

Send online

Application form
Attached documents

Digitalcertificate

Digitalcertificate

Registrationof sealimpression㊞

Registrationof sealimpression㊞(seal)

Registry Office
Must besubmitted on paper(in person or by mail)Can be sent
together online

Registry Office(seal)

Digitalcertificate(Note) When filing an application on paper (including paper applications with a QR code (2D bar code))or when a proxy files an application in person or by mail, a seal impression needs to be submitted
on paper as before. A notification of submitting or abolishing a seal impression may not be filed
online alone.
Source▶ “Notification of submitting or abolishing a seal impression online (commercial/corporate registration)” Ministry of Justice
http://www.moj.go.jp/MINJI/minji06_00072.html#01
Reference
The Cabinet Office has announced the following viewpoint together with the Ministry of Justice andMinistry of Economy, Trade and Industry, on June 19, 2020.
“Q&A concerning the affixing of seals”
http://www.moj.go.jp/content/001322410.pdf· Under private law, contracts come into effect when the intentions of parties concerned coincide witheach other. As such, the preparation of a written document and the affixing of a seal to the written
document are not necessary requirements, unless otherwise specified.
·When entering an agreement, whether a seal is affixed to a contract has no bearing on the validity of thecontract, unless otherwise specified.
Given this governmental stance, there will likely be fewer cases that require the affixing of a seal topaper documents, including applications for authorization, unless the attachment of a seal certificate isrequired by law. However, the purpose of terminating the use of the approval seal is to eliminate theperfunctory formality of affixing the seal, and not to deny the validity of the seal in and of itself. The
official registered seal, which is registered with an administrative agency and has objective probativevalue, will likely continue to be used hereafter as an effective means of increasing authenticity as long as
paper-based processes exist in the application of authorizations and other such matters.

35

13 Officially launch your businessInform friends, acquaintances, cooperators and business partners about your company and officiallylaunch your business. Use advertising media such as websites, social media, direct mails, flyers andcommunity magazines effectively as necessary, to actively cultivate markets in and outside of Japan.

14 Make the necessary tax payments
To engage in business as a going concern, you have the obligation to pay taxes in accordance withyour income. Figure18 summarizes the major taxes that are levied on business income. In addition tothese, there are also the consumption tax, revenue stamp duty, fixed asset tax, and other such taxes thatare not levied on the business income of sole proprietorships or corporations (information about thesetaxes are omitted in this edition).
In Japan, taxpayers themselves calculate the amount of national taxes they ought to pay based on
their income, and pay that amount at their own will upon filing a tax return declaring the amount(called “self-assessed taxation system”). It should be noted that, under this system, people who mustfile a tax return but do not, or people who file a tax return after the specified date will be required to
pay additional tax or an overdue tax. Normally, sole proprietorships must file a tax return between
February 16 and March 15 every year, and corporations within two months from the day following theending day of each business year, to the taxation office having jurisdiction over the location of thecompany (in the case of corporations, the address of the head office specified in the certified copy of
the register). Local taxes are to be paid to the relevant prefecture and municipality.
Figure 18(Taxes levied on sole proprietorships)
Tax

Description

Income tax

Levied in accordance withincome amountDue date:
The final tax return must be
filed between February 16 andMarch 15 of the following year.
Where to file the tax return:
Tax office having jurisdiction
over the address of thebusiness.

<Residence tax>
- Prefecturalresidence tax- Municipal residence
tax

Both consist of two parts:
1) Per capita levy
(levied uniformly for all
residents)
2) Per income levy
(levied in accordance withthe amount of income)Filing a final income tax returnsuffices; no other procedures
are necessary.

Enterprise tax

Levied in accordance with theamount of income

National
tax
Local tax
36

Filing a tax return

(Taxes levied on corporations)

Other

Local tax

National tax

Tax

Description

Filing a tax return
Due date:
The final tax return must be
filed within two months fromthe day following the ending
day of the business year.
Where to file the tax return:
Tax office having jurisdiction
over the head office address.

Corporate tax

Levied in accordance withincome amount<Corporate residencetax>- Prefecturalresidence tax- Municipal
residence tax

Both consist of two parts:
1) Per capita levy
(levied in accordance withthe size category of thecompany)2) Per corporate tax levy
(levied in accordance withthe amount of corporate tax
for the relevant term)Corporate enterprisetax

Levied in accordance withincome amountDue date:
Same as corporate tax.
Where to file the tax return:Prefectural tax office, etc.

Special local
corporate tax(national tax)

A portion of the corporate
enterprise tax is re-distributed
to the relevant prefecture aftercollection as special local
corporate tax.

Due date:
Same as corporate tax.
Where to file the tax return:Prefectural tax office, etc.

Due date:
Same as corporate tax.
Where to file the tax return:Prefectural tax office forprefectural residence tax;
municipal office for municipal
residence tax.

(Note) I n addition to the above, consumption tax, revenue-stamp duty, fixed asset tax, and other suchtaxes are also levied on both sole proprietorships and corporations.
Reference

“Inquiries regarding national taxes in general (consultations via phone, face-to-facemeeting, email, fax for the hearing impaired, etc.)” National Tax Agency
https://www.nta.go.jp/taxes/shiraberu/sodan/denwa-sodan/index.htm
Tax Payment Call Center
https://www.nta.go.jp/english/taxes/call_center/index.htm

Acquiring knowledge about the tax system and knowing the breakdown of the taxes you pay will
help you save taxes and prevent overpayments. In particular, a variety of tax incentives are available
to sole proprietorships and small and medium enterprises that file a tax return, so it is important toknow the requirements and conditions for receiving these benefits. For example, some tax deductions
may require you to prepare a business plan. The tax system is modified almost every year. Be tax wiseby deepening your understanding about taxes and consulting with the chamber of commerce andindustry or a tax accountant opportunely, as necessary.

37

Ⅲ
1

Reference Materials on Starting a Business

Items to consider when creating a business plan (example)
Items for consideration<Sales plan>
WhoWill sales representatives be family members only?
Will you need to hire employees?

To whom

What kind of customers do you envision? What needs do they have?

What

What are the characteristics of the products, services, or technology you
will provide? What kind of lineup will you have?

How

How will you sell your products, services, or technology (in-store, online,etc.)?

Sales terms

Will you sell for cash or on credit? Define other sales terms as necessary.

Business days/
hours

Will you have regular holidays? What will be your business hours?

<Purchasing plan>
What

Will you be able to procure products that accord with your sales strategy
and top selling products?

When & from
where

Will you be able to procure the necessary quantities in a timely mannerfrom suppliers?

Purchasing terms

Will you pay in cash or by credit? Define the terms for settlement by credit
or bill as necessary.

<Expense plan>

How

What

Mainly take into account personnel expenses, rent, depreciation, andpayment of interest.

Personnel
expenses

Can personnel expenses be reduced by streamlining operations such as byintroducing IT equipment?

Rent & office
expenses

Can the workplace or office be made as small as possible by thoroughly
rationalizing lines of traffic and work processes?

Depreciation

Can recycled items be utilized or items be leased?

Payment ofinterest

If you must rely on loans, first consider borrowing from institutions thatoffer low interest rates, such as Japan Finance Corporation. Also consider
utilizing subsidies, grants and incentives offered by the national
government, local governments, chambers of commerce and industry, andother such organizations.

 reated based on “Business Startup Guidebook” Tokyo Chamber of Commerce andSource▶ C
Industry38

2Business startup plan (example)

Business startup plan

Prepared on _____(yyyy)/__(mm)/____(dd)Your name
1. Your motivation for starting a business (Why are you starting a business? What prompted you to start a business?)
Office use only

2. Brief personal history (Include not only your work history, but also your duties, the posts you have held, skills you have acquired, etc.)
Office use only
Year/MonthContents□You have never managed a business before.
□You have managed a business before and continue to manage the same business today.
Business manage(⇒Description of business)ment experience□You have managed a business before, but have already closed the business.
(⇒Date of business closure: ____(yyyy)/__(mm))
Qualifications□ None in particular□ Yes (
No., code, etc.
)
□ Yes (
□ Pending□ Registered )Intellectual property rights, etc. □ None in particular
3. Products/services①(Share of sales%)
Details of
products/services ②(Share of sales%)
handled
③(Share of sales%)
Office use only
Selling point

Sales target/
strategyCompetitors, market
conditions, environment
surrounding your company

Suppliers

Sales destinations

4. Business partners, relations, etc.
(Notation in katakana)Business partner(address, etc. (municipality))
（

）

（

）
____ other companies

（

）

（

）

Subcontractors____ other companies（

Payment of the payroll）____ other companies
Cut-off date

Rate oftransactions Collection and payment conditions
on account

Share
%

% Cut-off date

Collection date%

% Cut-off date

Collection date%

% Cut-off date

Collection date%

% Cut-off date

Payment date%

% Cut-off date

Payment date%

% Cut-off date

Payment date%

% Cut-off date

Payment date%

% Cut-off date

Payment date

Office use only

Payment date (bonus months: ________, __________)

39

☆ This document will be used to shorten your interview time as much as possible.

Please note that it will not be returned to you.

☆ Please complete this form as much as you can, and attach it to your loan application.
☆ In place of this document, you may also submit a plan you have drawn up yourself.

5. Personnel

No. of full-time board members(for corporations only)____ people

No. of personnel(to be employed continuously for more than 3 months*)____ people(No. of family members included in the figure at left)____ people(No. of part-time workers included in the figure at left) ____ people* Write the number of personnel who you plan to employ continuously for more than 3 months from the startup of your business.

6. Loans (in the case of a corporation, loans borrowed by the representative)
LenderBalance

PurposeAnnual repayment amount□Business

□Home

□Car

□Education□Credit card

□Otheryen

yen□Business

□Home

□Car

□Education□Credit card

□Other□Business

□Home

□Car

□Education□Credit card

□Other

yen
yen

yen
yen

7. Amount of required capital and procurement method
Required capital

Estimate requested fromAmountStore, factory, machines,
vehicles, etc.
(Breakdown)

Procurement method

Operating funds

Equipment fundsyenPersonal funds

yenLoans from parents, siblings, acquaintances,friends, etc.
(Breakdown and repayment method)yen

Loan from Japan Finance Corporation’s MicroBusiness and Individual Unit

Product purchases, payment of expenses, etc.
(Breakdown)

yen

Total

yen

Amountyen

Loans from other financial institutions, etc.
(Breakdown and repayment method)

yen

Total

yen

8. Business prospects (monthly average)
At time of startup
Sales (1)

1 year later or after
the business gets on track
Basis for your calculation of sales, cost of sales (purchase amount), and expenses(around ___(yyyy)____(mm)

yen

yen

yen

yen

yen

yen

Rent

yen

yen

Interest expenses

yen

yen

Other

yen

yen

Total (3)

yen

yen

Profit(1) – (2) – (3)

yen

yen

Expenses

Cost of sales (2)(Purchase amount)
Personnel
expenses (note)(Note) In the case of a sole proprietorship, do not include the personnel
expenses of the business owner.

9. Comments (Anything you wish to add, concerns about conducting business, request for advice, etc.)

Please submit any other materials that would be of reference.
(Japan Finance Corporation’s Micro Business and Individual Unit)

Source▶ “ Business startup plan” Japan Finance Corporation
http://www.jfc.go.jp/n/service/pdf/kaigyou00_190507b.pdf
40

3

Loan application procedure
Loan application procedure
Example of applying for a loan from Japan Finance Corporation

Consultation

Application

Call the Business Finance Consultation Line (0120-154-505).

Where to apply
Corporations: Branch office in charge of the location of the head office
Sole proprietorships: Branch office nearest the location where the business isplanned to be started
Necessary documents· Business startup plan
· Cost estimate (if applying for equipment funds)· Certificate of registration information or certified copy of the register (in thecase of a corporation)· Certified copy of the real estate register or certification of registered matters (ifproviding collateral)· Letter of recommendation from the prefectural governor, etc. (in the case of anenvironmental health business; but not required if applying for a loan of lessthan 5 million yen)
Other
· Receive an interview about your business plan, asset and liability situation, etc.
· Store/factory visit

Interview· Determination of whether you are qualified to receive a loan

Screening

Repayment

Reference

Pay in monthly installments, as a rule.
Repayment method: equal monthly payment of principal, equal monthly
payment of principal and interest, stepped repayment, etc.

https://www.jfc.go.jp/n/finance/flow/tetsudukij_c.html

41

4

Institutions, associations and professionals to consult about starting or managing a business

Even if you have an idea, it is often difficult to move forward from a state of vagueness. At times
like this, consult an expert in corporate management to clarify issues and problems, and solve them
one by one based on the expert's advice regarding what you lack and what kinds of measures areavailable to you. In Japan, the Small and Medium Enterprise Agency, Chambers of Commerce andIndustry, and various other public and private institutions and organizations provide support toentrepreneurs, such as by imparting management know-how, holding seminars on how to prepare
business plans and other relevant topics, facilitating match-ups between venture companies andinvestors or business partners, providing individual counseling, and offering business financing.
A series of procedures also need to be completed when starting a business, including procedures foracquiring a proper status of residence, registering the company at the Legal Affairs Bureau, filingdocuments with the tax office and social insurance office, and acquiring authorization from relevant
government offices. You may be able to handle some of these procedures yourself, but they may take aconsiderable amount of time if you are not familiar with them. In such cases, administrative attorneys,
judicial scriveners and other professionals in their respective fields can help. Based on the thinking
that time is money, it is one option to leave all procedures up to professionals and dedicate yourself toyour main business duties.
I. Public support agencies and organizations
Regional Head Offices of the Organization for Small & Medium Enterprises and Regional Innovation, Japan
Eligibility: Entrepreneurs, SME managers taking a new step forward, etc.
Services: Dispatch of experts, startup consultation, provision of information on incubation facilities, etc.
Location: 	10 locations nationwide (1 in each regional administrative unit, 1 in Okinawa)
Inquiries: https://www.smrj.go.jp/regional_hq/index.html
https://www.smrj.go.jp/english/about/network.html
https://www.smrj.go.jp/venture/index.html
https://www.smrj.go.jp/english/index.html
Prefectural SME Support Centers
Eligibility: SME managers who have inquiries concerning management, funds procurement, etc.
Services: Business diagnosis, dispatch of experts, etc.
Location: All prefectures and ordinance-designated cities
Inquiries: “Support center locations”
https://zenkyo.or.jp/association/index.htm
Startup Support Center, Tokyo Chamber of Commerce and Industry
Eligibility: 	SME managers who have inquiries concerning business startup, business succession, newbusiness establishment, funds procurement, etc.
Services: 	Procedures for starting a business, consultation regarding startup issues such as concerning publicfinancing systems that are available when starting a business.
Location: Marunouchi Nijubashi Bldg., 3-2-2 Marunouchi, Chiyoda-ku, Tokyo 100-0005
Inquiries: 	“Tosho Business Support Desk”
Tel. 03-3283-7767
https://www.tokyo-cci.or.jp/entre/
https://www.tokyo-cci.or.jp/english/
https://www.tokyo- cci.or.jp/english/our_main_missions_and_commitments/business_support/

42

Mirasapo Plus
Eligibility: Small and medium enterprise businesses, small businesses
Services: 	Introduction of support systems, such as subsidies and grants, stimulus payments, loans, tax
incentives, etc.
Inquiries: 	“Small and Medium Enterprise Agency”
Tel. 03-3501-1511 (main number)
https://mirasapo-plus.go.jp/
Chushokigyo 119
Eligibility: 	SME managers, small businesses, etc.
Services: 	Introduction of appropriate support agencies to help solve various issues
Inquiries: 	“Office for expert dispatch services”
Tel. 03-5542-1685
https://chusho119.go.jp/
Remark: 	Operated under the commission of the Small and Medium Enterprise Agency.
Japan Finance Corporation (JFC)
Eligibility: Entrepreneurs, etc.
Services: 	Consultation about starting a business, financing support for startup companies experiencing
difficult in funds procurement, etc.
Location: 	Comprehensive Support Desks (152 locations nationwide), Startup Support Centers (15 locations
nationwide), Business Support Plazas (6 locations nationwide), etc.
Inquiries: “Startup support in general”
https://www.jfc.go.jp/n/company/national/initiation.html
https://www.jfc.go.jp/n/english/“Business Support Plazas”
https://www.jfc.go.jp/n/finance/sougyou/ijuusougyou/location/index.html“Business pension fund consultation”
Tel. 0120-154-505
Japan Federation of Credit Guarantee Corporations (JFG)
Eligibility: Small and medium enterprises, small businesses
Services: 	Serving as public guarantors to enable companies to borrow business funds from financial institutions
Location: 2-1 Kanda Tsukasa-machi, Chiyoda-ku, Tokyo 101-0048
Inquiries: https://www.zenshinhoren.or.jp/
https://www.zenshinhoren.or.jp/english/“List of nationwide credit guarantee corporations”
https://www.zenshinhoren.or.jp/nearest/
Tokyo One-Stop Business Establishment Center (TOSBEC)
Eligibility: People considering starting a business in Tokyo
Services: 	Various procedures that are necessary to establish a company or start a business, such as thenotarization of the articles of incorporation, company registration, tax affairs, pension affairs,social insurance, immigration matters, etc.
Location: 	Japan External Trade Organization (JETRO) Headquarters
Ark Mori Bldg. 7F, 1-12-32 Akasaka, Minato-ku, Tokyo 107-6090
Inquiries: Tel. 03-3582-4934
https://www.startup-support.metro.tokyo.lg.jp/onestop/jp/
https://www.startup-support.metro.tokyo.lg.jp/onestop/en/
Japan External Trade Organization (JETRO)
Eligibility: People considering engaging in international business
Services: 	Advice on imports/exports and investment (how to begin engaging in trade, overseas market
information, investment related information, etc.)
Location: Ark Mori Bldg., 1-12-32 Akasaka, Minato-ku, Tokyo 107-6006
Inquiries: “General information about JETRO”
Tel. 03-3582-5511
https://www.jetro.go.jp/
https://www.jetro.go.jp/en/“JETRO offices in Japan”
https://www.jetro.go.jp/jetro/japan/list.html
https://www.jetro.go.jp/en/jetro/worldwide/japan/
Manufactured Imports and Investment Promotion Organization (MIPRO)
Eligibility: People considering starting a business
Services: Consultation about company establishment and business startup procedures
Location: 6th Floor, World Import Mart Bldg., 3-1-3, Higashi-Ikebukuro, Toshima-ku, Tokyo 170-8630
https://www.mipro.or.jp/
https://www.mipro.or.jp/english/index.html
Inquiries: Tel. 03-3989-5151
https://www.mipro.or.jp/advisement/
https://www.mipro.or.jp/english/advisement/investment/index.html
43

II. Professional organizations
Japan Federation of Certified Administrative Procedures Legal Specialists Associations(Administrative attorneys)
Services: 	Consultation on obtaining various authorization and licenses, such as the application
for the certificate of eligibility for residence status, application for change of status ofresidence, application for a business permit, etc., support for the creation of thearticles of incorporation, and other such support
Location: Toranomon Towers Office 10F, 4-1-28 Toranomon, Minato-ku, Tokyo 105-0001
Inquiries: 	“Japan Federation of Certified Administrative Procedures Legal Specialists Association”
Tel. 03-6435-7330
https://www.gyosei.or.jp/
https://www.gyosei.or.jp/about/language/english“Certified Administrative Procedures Legal Specialists Association in each prefecture”
https://www.gyosei.or.jp/about/disclosure/membership.html
Japan Federation of Shiho-Shoshi Lawyer's Associations (Judicial scriveners)
Services: Consultation regarding registration matters, agency for registration procedures, etc.
Location: 4-37 Yotsuya Honshio-cho, Shinjuku-ku, Tokyo 160-0003
Inquiries: Tel. 03-3359-4171
https://www.shiho-shoshi.or.jp/
https://www.shiho-shoshi.or.jp/global/english/“List of Shiho-Shoshi Lawyer's Associations throughout Japan”
https://www.shiho-shoshi.or.jp/association/shiho_shoshi_listh/“List of Shiho-Shoshi consultation centers”
https://www.shiho-shoshi.or.jp/activity/consultation/center_list/
Japan Federation of Certified Public Tax Accountants' Associations (Tax accountants)
Services: 	Consultation about tax matters, agency for the preparation of the final tax return andother tax documents, etc.
Location: Nihon Zeirishi Kaikan Bldg. 8F, 1-11-8 Osaki, Shinagawa-ku, Tokyo 141-0032
Inquiries: Tel. 03-5435-0931
https://www.nichizeiren.or.jp/
https://www.nichizeiren.or.jp/eng/“List of Certified Public Tax Accountant's Associations throughout Japan”
https://www.nichizeiren.or.jp/nichizeiren/location/
Japan Federation of Labor and Social Security Attorney's Associations (Labor and social security attorneys)
Services: 	Social and labor insurance procedures, consultation about labor management issues,
consultation about pension matters, etc.
Location: 	Shakai Hokenromushi Kaikan Bldg., 3-2-12 Nihonbashi Hongoku-cho, Chuo-ku,
Tokyo 103-8346
Inquiries: Tel. 03-6225-4864 (main number)
https://www.shakaihokenroumushi.jp/
https://www.shakaihokenroumushi.jp/en/tabid/296/Default.aspx“List of Labor and Social Security Attorney's Associations throughout Japan”
https://www.shakaihokenroumushi.jp/organization/tabid/238/Default.aspx
Japan Small and Medium Enterprise Management Consultants Association (Small andmedium sized enterprise management consultants)
Services: 	Providing management diagnosis, advice on business management, etc. to small andmedium enterprises
Location: Ginmatsu Bldg., 1-14-11 Ginza, Chuo-ku, Tokyo 104-0061
Inquiries: Tel. 03-3563-0851
https://www.j-smeca.jp/
https://www.j-smeca.jp/contents/018_english_contents.html
	“List of Small and Medium Enterprise Management Consultants Associations in eachprefecture”
https://www.j-smeca.jp/open/static/sibuindex.jsf
Japan Federation of Bar Associations (Attorneys)
Services: 	Legal consultation, reconciliation and settlement negotiation, lawsuit activities, filing
petitions against government authorities, and other such legal affairs
Location: Bengoshi Kaikan Bldg. 15F, 1-1-3 Kasumigaseki, Chiyoda-kyu, Tokyo 100-0013
Inquiries: Tel. 03-3580-9841 (main number)
https://www.nichibenren.or.jp/
https://www.nichibenren.or.jp/en.html“Himawari Hotline <for SME managers>”
Tel. 0570-001-240“Himawari SME Center”
https://www.nichibenren.or.jp/ja/sme/about_himawari.html“Online consultation office”
https://www.nichibenren.or.jp/ja/sme/contact.html
44

Trade and Business Startup Consultation Desk

MIPRO Consulting services for trade & starting business
TEL: 03-3989-5151
https://www.mipro.or.jp/
Consultation available weekdays from 10:30 A.M. to 4:30 P.M.

This document has been prepared based on the information as of April 30,
2021 and with the utmost care regarding accuracy. However, when actually
starting a business in Japan, please inquire with the relevant public offices
concerning necessary documents, matters, etc. or consult with anadministrative attorney or other specialists.
MIPRO shall not be liable for any direct or indirect damage arising from theuse of information and other materials presented in this document.

*Unauthorized reproduction of this document is prohibited.
This material has been prepared by receiving subsidies for FY2021 Promotion Business Expenses from the Foundation forInternational Trade and Industrial Co-operation, a general incorporated foundation.

The Mipro Guide toStarting a Business in Japan

Manufactured Imports and Investment Promotion Organization (MIPRO)

6th Floor, World Import Mart Bldg., 3-1-3, Higashi-Ikebukuro, Toshima-ku, Tokyo 170-8630, Japan
TEL.03（3971）6571 FAX.03（3590）7585
URL：https://www.mipro.or.jp/～Preparation for Startup～

The Mipro Guide to Starting a Business in Japan ～ Preparation for Startup ～外国人のための起業ガイドブック（起業準備編）外国人のための起業ガイドブック（起業準備編）MIPRO