Not really difficult. If you are looking at that kind of thing, my biggest advice is to talk to a tax accountant before you do anything. I would have saved a lot of money if I'd done that. Instead I waited until I actually set up the company.

Setting up a company in Japan is fairly expensive. The rules have changed in the last few years and there are some cheaper alternatives, but there are a lot of tax implications, so it's important to weigh the options. I went for 株式会社 (or a corporation), which is the most expensive option. My main reason is because I originally intended to do contracts in Japan and a corporation was much more normal when I started the company. Also, I had a buddy that was going to work with me and I might have needed to sponsor a visa for him. But life got in the way and that didn't end up happening... So I've ended up with a more flexible, but slightly more expensive situation. In the end I think I spent about 40万円 (about $4K) setting up and I think the accountant costs me about 15万円 ($1500) per year (which is an incredible bargain -- he easily pays for himself).

I'm in a good situation in that my wife is both CEO and chairman of the board for my company. In truth, I'm not even an officer of the company. My wife has no other job and handles all the business for the company. I can concentrate completely on programming. This was a serendipitous situation which I didn't actually plan.

In Japan, for a family business, family members can only work full time and have to be paid market rate for their work. My wife didn't want to continue her previous job (care worker in a retirement home), so we wanted her to work for the company. The problem was what job... I was going to train her to be a web designer and then take some small contracts making web pages in the area, etc. However, it turns out that the job of CEO has no defined duties and no defined pay range. So we made her that and it's been a godsend. She deals with all the filling in of forms and talking with the city hall, etc, etc, etc. Probably it would be good for me to be doing that stuff from the perspective of learning Japanese, but I think it would be stressful.

So, my second advice if you want to do that and you don't have a similar situation, and you aren't confident of your Japanese is to hire a business manager. In truth, if (for example) you don't have a visa for Japan and want to sponsor your own visa as a business person, you need to hire a Japanese resident as a business manager anyway.

But anyway, the actual process of setting up the company wasn't too bad. You need to talk to a lawyer that specialises in setting up businesses (I forget the name, sorry). They tell you exactly what you need to do. There is a fair amount of paperwork and you have to buy some expensive hanko (stamps that you use instead of signatures), but not so bad. After that a tax accountant can tell you all of the things you need to do. Like I said, though, talk to the tax accountant first because which options you go for when setting up the company can have pretty far reaching effects with money (especially what you can and can not deduct, or how much you have to pay for retirement and health insurance funds).

If you need to sponsor your own visa, then you also need to talk to immigration. There is a website somewhere on the government pages. When I was thinking of sponsoring my buddy, they bent over backwards to help me on the phone. If you aren't in Japan now, you can talk to the embassy where you are and they will put you in touch with someone. It may cost some money to have them consult with you, but I don't know how much (in some cases they waive the fee and I don't know what the rules are). You need a minimum of 500万円 (about $50K) in capital to sponsor your own visa, but it depends on salaries, etc, etc. Basically the company needs to prove that it can provide for you. Also, you might need to keep in mind that there is a surtax on capital in a company (0.1% IIRC), so you will actually need slightly more than they say, because the payment of tax is not counted in the capitalisation of the company (and I don't even think it's an expense :-P).

Ah, the other headache is getting bank account, believe it or not. Banks do not like setting up accounts for new businesses. We went to a couple of banks and they turned us down. Eventually a local bank that my wife had an account with previously accepted us. But don't think you'll get any credit. We asked to get a corporate credit card and they actually laughed in our faces (in Japan!) Years later we still don't have one.

We've come up with a series of hacks to save money with the banks. One of the internet banks has a really good rate on currency exchange (incoming only) for personal accounts. So we set up a personal account just for the company and all the money is funnelled through there. I think it costs us about 1 yen per GBP on the exchange rate, which is practically free. We then do all of our banking in cash -- take all the money out from the ATM, walk over to the other bank, deposit the money. Stupid, but you do what you have to do. Banks are crazy here.

That's about all I can think of right now. I guess the only other thing if you decide to set up a company is to allocate enough time. It took us about a month to get everything done and I think that was fairly quick. YMMV.