INFORMATION PURPOSE ONLYJAPANMARKETENTRY
Co-published by JIAM, and Atsumi & Sakai

SECTION ONE

THIS SECTION PROVIDESMARKET ENTRY GUIDANCE FOR
GENERAL BUSINESSES. FOR
SPECIFIC PROCESS FORFINANCIAL BUSINESS, PLEASEJUMP TO SECTION 2.

About Japan Market Entry

Establishment> Preliminary matters> Setting up an entity> Visas and Employment Law

Post Establishment> Employment matters> Corporate secretarial and changes
to registrations and ﬁlings> Other legal matters(Contracts, Licensing, etc.)

Establishment | Preliminary matters - 1> Preliminary matters

1. Selecting the type of entity and ownership structure
2. Regulatory issues
3. Cultural considerations
Branch Oﬃce

・Easy and fast to establish
・A branch oﬃce is viewed by potential employees
and business counterparties as a stable type of entity
・Not separate legal entity from parent

Kabushiki Kaisha (KK)・Most popular type of company
・Highest credibility

Godo Kaisha (GK)・New type of company
・Less time and cost to establish than KK

Establishment | Preliminary matters - 2> Preliminary matters

1. Selecting the type of entity and ownership structure
2. Regulatory issues

3. Cultural considerations
Branch Oﬃce

Subisidary Company
Kabushiki-Kaisha(Joint-Stock Corporation)

Godo-Kaisha(Limited Liability Company (LLC))

CapitalNo capital

1 yen or more

1 yen or more

Liability

Liability of parent

Limited to amount ofequity participation

Limited to amount ofequity participation

Executives
required

1 or more* individual
representative in Japan

Depending on type of KK may
require Representative Director,
Board of Directors, Statutory Auditor /At least one individual director is required

No legally stipulated minimum.
In principle, all members are executive members,
but a representative member may be appointed;
Executive member could be a corporation

Distribution ofproﬁts and losses−Allocated according to equity
participation ratio

May be allocated at a diﬀerent ratefrom equity participation if speciﬁedin articles of association

Taxation

Income arising
within Japan is taxable

Taxed according to proﬁts of KK
and proﬁts allocated to shareholders

Taxed according to proﬁts of LLC
and proﬁts allocated to participants* At least one representative must have an address in and be resident in Japan.

Establishment | Setting up an entity - 1 (Formation Procedure for a KK)> Setting up an entity
Decision to establish a KK
Name search at Legal Aﬀairs Bureau for same corporate names

Approx. 1 - 2 months

Order the Company Seal
Preparation of documents (Some documents, such as signature certiﬁcate of directors, need to be notarized in the home country of the individual signatory )Notarization of Articles of Incorporation by Japanese notary public
Transfer the capital to local bank accountExamination by directors and auditors of legality of estabishment procedures and execution of documents
Apply for registration ( formation is eﬀective at this point )Obtain commercial registry and certiﬁcate of company seal ( 1 or 2 weeks following the application )Establishment | Setting up an entity - 2 (Formation Procedure for a KK)> Setting up an entity

Post - Incorporation
Submit Government notices (national tax authorities, prefectural and municipal tax authorities, labor standards inspection
authorities, public employment security authorities, and pension authorities)

Opening of bank accountPreparing the shareholdersʼ registry

Notiﬁcation of the share acquisition to the Bank of JapanEstablishment | Visas - 1> Visas and Employment Law[ Major residence visa categories ]Residence

Activities authorized to engage inExamples

Period of Stay

Investor / Business
Manager

Activities of operating international trade or some other businessof a public or private organization in Japan or of managing
such business

Investor, manager oradministrator ofa company, etc.

5 years,
3 years,
1 year,4 months or
3 months

Engineer / Specialistin Humanities /International Services

Engaging in services which require skills or knowledge
pertinent to physical science, engineering or other natural scienceﬁelds, or engaging in services which require knowledge pertinent
to jurisprudence, economics, sociology or other human scienceﬁelds, or engaging in services which require speciﬁc ways ofthought or sensitivity based on experience of foreign cultures,
based on a contract with a public or private organization in Japan

Engineer, such asmechanical engineer,interpreter, designer,
language instructor at a
private company, ormarketing specialist

5 years,
3 years,
1 year or
3 months

Intra-company
Transferee

Activities of a staﬀ member transferred to a business oﬃce inJapan for a limited period of time from a business oﬃce establishedin a foreign country by a public or private organization which has
its head oﬃce, branch oﬃce or other business oﬃce in Japan,
which are to be conducted at such business oﬃce in Japan andwhich are listed in the row "Engineering/Specialist in Humanities/
International Services" of this Table

Transferee from anoﬃce abroad

5 years,
3 years,
1 year or
3 months

Establishment | Visas - 2 (Application Procedure)> Visas and Employment Law

Approx. 1 - 3 months[ Visa Application Procedure ]1

Application for Certiﬁcate of Eligibility (COE)2

COE issued by Japan Immigration Bureau→ Send it to the Applicant outside of Japan

3

The Applicant applies for a visa using the COEat the Japanese Embassy in his/her country by himself/herself

4Visa issued to the Applicant

5

Entry into JapanEstablishment | Employment Law> Visas and Employment Law[ Employment matters ]Independent contractor arrangements

Local hire employment agreements

Non-Japanese employee agreements

Director and manager agreements

Post Establishment
Employment matters>

Corporate secretarial
Changes to registrations and ﬁlings
Renewal of visa status, change of visa status

・Employment contract: A formal employment contract is not required, but an employee
must be given a written statement of certain terms of employment
・Work rules: Employers with 10 or more employees must adopt “work rules” which must ﬁlethem with the local Labour Standards Oﬃce (LSO)・36 agreement: If an employer wants employees to work on a statutory day oﬀ or for morethan statutory hours, it must ﬁle a notiﬁcation with its local LSO
・Advising on termination of employment, etc.

Regulatory advice
Commercial contracts
Licensing
Dispute resolution
Data protection

・Supporting preparing the documents such as shareholdersʼ meeting minutes, board ofdirectorsʼ meeting minutes
・Application for change of registry, such as re-appointment of oﬃcers, relocation of the oﬃce,
capital increase, etc.

SECTION TWOMARKET ENTRY TO JAPANFOR FINANCIAL BUSINESSOPERATORSBusiness registration: timeline, requirement, etc.

TIMELINE
GENERAL PROCESS GUIDANCE ON
COMMENCEMENT OF OPERATIONS IN JAPANIn order for foreign financial instruments business operators toenter the Japanese market, it is generally required to obtain aregistration from or file a notice with the Financial Service Agency.
STEP 1INITIAL
CONSULTATION
with local finance bureau / office

AVERAGE 3-4 MONTHS
STEP 2SUBMISSION OF
APPLICATION FORM

STEP 3

REVIEW
BY FINANCIAL
BUREAU, ETC.
STEP 4REGISTRATION
Registration tax costs JPY 150,000

STEP 5

MEMBERSHIPS
Self regulatoryorganizations membership
ADR measures
STEP 6DEPOSITDeposit for operation
Notification of deposits
STEP 7OPERATIONS
Commencement of operations inJapanAVERAGE 2 MONTHS

5-6 MONTHSIN TOTAL*ACTUAL PROCESSING TIME MAY BE SUBJECT TO
BUSINESS TYPE AND APPLICANTS' STATUS, ETC.

Copyrights© JIAM and Atsumi &Sakai

Type of Registration
Type of registration

Services oﬀered✓✓✓✓✓・Dealing, brokerage, underwriting, oﬀering

Type I Financial Instruments Business・Public or private oﬀering of interests in collective investment
scheme (funds)
・Dealing or brokerage of illiquid securities, including interestsin fundsType II Financial Instruments Business・Investment management pursuant to investment
management agreement
・Investment management of interests in funds
・Investment management of interests in investment trusts

Investment Management Business・Investment advisory/agency

Investment Advisory/Agency Business・Private oﬀering or investment management of interests incollective investment scheme (funds) for professional investors

Funds for Professional Investors(notiﬁcation only (registration not required))* The services above are the main services that typically need registrations and are not exhaustive.
Please note that it is necessary to conduct thorough research to decide what types of registrations are required for the services.

Registration Requirement[ Degree of Stringency of Registration Requirement ]STRINGENT> 121332445

LAX

Investment
Advisory/Agency
Business

Funds forProfessional
Investors(notiﬁcation)

No requirement

No requirement

A foreign juridical
person can beregistered

A foreign juridical
person can conduct
this business

Required
NOTE: In the case of a foreign juridical person,
a domestic representative needs to be speciﬁed.

No requirement

No requirement
NOTE: In the case ofa foreign juridical
person, a domestic
representative needs
to be speciﬁed.

50,000,000 yen

10,000,000 yen(If an individual, then abusiness security depositof the same amount)

50,000,000 yen

None (5,000,000yen businesssecurity deposit)

No requirement

Net assets

As for capital requirements

No requirement

As for capital requirements

No requirement

No requirement

Equity capital

Required

No requirement

No requirement

No requirement

No requirement

Type II Financial
Instruments
Business

Type ofbusinessType I Financial Instruments Business

Legal Form

A stock company (K.K.) (limited to those with a boardof directors and either a company auditor/auditors, an audit
or supervisory committee, or a nominating committee, etc.)OR,a juridical person of the same kind as a company with a boardof directors established in compliance with laws and regulationsof a foreign state

Requirement
fordomestic oﬃce

Required
NOTE: In the case of a foreign juridical person,
a domestic representative needs to be speciﬁed.

Required
NOTE: In the case of
a foreign juridicalperson, a domestic
representative needs
to be speciﬁed.

Capitalrequirements,etc.

No requirement
A foreign juridical
person can beregistered

Investment Management BusinessA stock company (K.K.) (limited to those with a boardof directors and either a company auditor/auditors, an audit
or supervisory committee, or a nominating committee, etc.)OR,a juridical person of the same kind as a company with a boardof directors established in compliance with laws and regulationsof a foreign state5Registration Requirement[ Degree of Stringency of Registration Requirement ]Continued from the previous page>

STRINGENT
1

Type ofbusinessType I Financial Instruments BusinessType II Financial
Instruments
Business

Personnel
requirements

Required (strict)Businessmanagement
structure

23

13

24
45

LAX

Funds forProfessional
Investors(notiﬁcation)

Investment Management Business

Investment
Advisory/Agency
Business

Required

Required

Required

No requirement

Self-regulatory organization membership
OR
Internal regulations should be established andcompliance structure arranged.

Self-regulatoryorganization
membership
OR
Internal regulations
should be establishedand compliancestructure arranged

Self-regulatory organization membership
OR
Internal regulations should be established andcompliance structure arranged

No requirement

No requirement

Concurrent
businessrequirements

Required

No requirement

Required

No requirement

No requirement

Trade namerequirements

Required

No requirement

No requirement

No requirement

No requirement

Major
shareholders

Required

No requirement

Required

No requirement

No requirement

5

NOTICES
1. ABOUT ATSUMI & SAKAI
Our ﬁrmʼ s name is Atsumi Sakai Horitsu Jimusho Gaikokuho Kyodo Jigyo; we are a partnership organized in accordance with the Japanese Civil Code,and we are a foreign law joint enterprise regulated by the Bengoshi Law, the Law on Special Measures concerning the Handling of Legal Services byForeign Lawyers and regulations of the Nichibenren (Japan Federation of Bar Associations) and bar associations to which our lawyers belong.
We are authorised in Japan to advise on the laws of Japan, England & Wales, Germany (in association with Janssen Foreign Law Oﬃce), India, the PRC,
the States of New York and California, United States federal law, the States of Queensland and Victoria (Australia) and Australian Federal law.
For further information, please see our website, www.aplaw.jp.
2. JAPANESE LAW ADVICE
Advice on Japanese law will be provided under the supervision and authority of a Bengoshi (Japanese lawyer) Partner or Partners, as identiﬁed to you
above and/or in correspondence. We will not be liable for any comments or views on Japanese law made by any member of our ﬁrm other than aBengoshi; any such comments or views do not constitute advice on Japanese law and you act on them at your own risk.
3. FOREIGN LAW ADVICE
Advice on any foreign law referred to above will be provided under the supervision and authority of a Registered Foreign Lawyer registered to advise that
law in Japan, as identiﬁed to you above and/or in correspondence. We will not be liable for any comments or views on such a foreign law made by any
member of our ﬁrm other than a Registered Foreign Lawyer as referred to in this paragraph; any such comments or views do not constitute advice onthat foreign law and you act on them at your own risk.

This material only provides general overview of requirements and steps for entry into the Japanese market and does not consist legal advice;details of process and speed thereof vary depending on factors and preparation by relevant market entrants in each matter.

QUESTION?

THANK YOUFOR YOUR
TIME.
Point of Contact:
contact@jiamconsortium.org