Investing in Japan
Initial Cost Estimation
Basic Premises of Model Case
- The model case is based on the most common type of new business operation established by foreign firms entering the Japan market with an initial staff of two: one person from the foreign firm (who typically serves as managing director) and a Japanese national (manager-level person).
- The company makes use of a temporary office to complete incorporation procedures to set up joint-stock company or branch office, and then moves into a permanent office (rented).
- The foreign national (managing director) lives in an extended-stay apartment or hotel, then moves to permanent housing in a residential area after completing incorporation procedures.
- The company engages licensed professionals with publicly administered qualifications for a kind of procedures.
Initial Costs (in Tokyo)
(All figures shown in $US; 1 $US=JPY122.45)
Preparation ( Pertinent information )
|Rent (3 months) for temporary office (includes security deposit)||0 - 8,170||
Rental fees and required deposits vary among the private companies and public organizations that offer such facilities.
JETRO IBSCs provide free temporary office space (for up to 50 business days).
|Rent (3 months) for temporary housing (in extended-stay apartment)||3,760||20 to 30 sq.m|
|Subtotal||3,760 - 11,930|
Obtaining visas ( Pertinent information )
|Temporary visitor visa||-||Not required for citizens of countries with which Japan has visa exemption agreements; View list of 67 countries (as of December 2014) on Ministry of Foreign Affairs website.|
|Certificate of eligibility (through proxy)||1,220||Commission to professional (proxy) varies depending on type of visa.|
Company establishment and tax noticess ( Pertinent information )
|Costs to register company||2,040||820||Registration and license tax, stamp tax for article of incorporation, obtaining official copy etc.|
|Paid-in capital||40,830||-||Although establishment with capital of 1 yen is possible under the Companies Act of Japan, you need to invest 5 million yen or more if you are in receipt of an "Business Manager" visa status.|
|Name seals for company and personal use||240||Price for standard kit (4 company seals: registered seal, square seal, seal used for bank transactions, a rubber stamp) at major seal chain store in Japan.|
|Company registration and notifications (through proxy)||2,040||1,630||Includes fees to prepare affidavit(s).|
|Notification of stock acquisition to the Bank of Japan (through proxy)||240||-|
|Tax and social insurance notices (through proxy)||1,630|
Hiring local personnel ( Pertinent information )
|Fee paid to recruiting agency for hiring a manager||28,580||Equivalent to 35% of expected first year salary (JPY 10 million)|
Setting up a permanent office ( Pertinent information )
|Monthly rent (do not include maintenance fee)||2,140||Based on rates for a 50 sq.m office in one of Tokyo's five major districts (Source: "MIKI OFFICE REPORT 2015 June," Miki Shoji). Security deposit is equivalent to ten months' rent.|
|Real estate brokerage fee (equivalent to one month's rent)||1,220|
|Basic office furnishings (desks, chairs, etc.)||990||New items bought at major office equipment stores.||Cost-savings is possible through leasing equipment or buying items second hand. Rental serviced offices are generally furnished with desks, chairs and equipment such as telephones.|
|Basic office equipment (computers, printers, phones, Internet initial cost etc.)||4,490||New items bought at major electronics retail stores.|
|Communication costs (basic monthly fee for Internet and telephone)||200||Same provider for fixed telephone, cell phone and Internet service. Subscription fee for fixed telephone is not included.|
|Fire and accident insurance (one-year policy)||240||Covers costs for damage to building/office equipment due to fire, lighting/flood and theft.|
Setting up permanent housing (for foreign national) ( Pertinent information )
|Monthly rent (includes maintenance fee)||2,190||Based on average rent for 60 to 70 sq.m apartment in Tokyo's Minato district.|
|Deposit two month's rent, key money two month's rent||8,760||There has been an increasing trend towards properties that reduce the deposit and key money amounts or do not require them at all.|
|Real estate brokerage fee (equivalent to one month's rent)||2,190|
<Comparison of initial start-up costs for subsidiary company in major business areas>
* Comparison chart of initial start-up costs in Japan's major business areas.(245KB)
* For more information on the business environments of Japan's regions .
This model case is meant to be only a "guide". The actual costs of setting up a business in Japan vary from company to company (and depend on current economic and business conditions).
(as of June, 2015)