How to Set Up Business in JapanCost Estimation

Basic Premises of Model Case[More details]

  • 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 establish a corporation or branch office, and then moves into a permanent office (rented).
  • Japan representative to stay at a hotel or a monthly-contract apartment during the preparation period, then move to a permanent residence upon completion of company registration.
  • Applications and notifications completed by professional service providers.
The following is an example case. You start setting up a company with two - person staff a staff of two people: a foreign national who is a managing director and a Japanese who is a manager recruited through a staff agency. After staying at a temporary office for three months,the company relocates to a permanent office in central Tokyo. Approximate floor space of the office is 50 sq.m. After a temporary stay at an extended-stay apartment for three months,the foreign managing director relocates to permanent housing in central Tokyo. Approximate floor space is 60 - 70 sq.m.

Initial Costs in Tokyo

Subsidiary company: About US$121,000~US$131,000
Branch: About US$70,000~US$80,000

For the establishment of a Japanese corporation or a branch, the costs are generally as follows. See below for details.

1. Company establishment and tax notices[More details]

Subsidiary company: About US$7,500 , Branch: About US$ 5,000(unit: $US; 1US$ =JPY105.14)

Company establishment and tax notices
Details Subsidiary Company
(Kabushiki Kaisha)
Branch Criteria/Remarks
Costs to register company 2,380 950 Registration and license tax, stamp tax for article of incorporation, obtaining official copy etc.
Name seals for company and personal use 290 290 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.
Professional fees for company registration and notifications (through proxy) 2,380 1,900 Includes fees to prepare affidavit(s).
Stock acquisition report to the Bank of Japan (through proxy) 480 N/A
Tax and social insurance notices (through proxy) 1,900 1,900
Subtotal 7,420 5,040

2. Paid-in capital[More details]

Subsidiary company: About US$48,000 , Branch: N/A(unit: $US; 1US$ =JPY105.14)

Paid-in capital
Details Subsidiary Company
(Kabushiki Kaisha)
Branch Criteria/Remarks
Paid-in capital 47,560 N/A Although establishment with a capital of 1 yen is possible under the Companies Act of Japan, you need to invest 5 million yen or more if you are entitled to a "Business Manager" visa status.
*The Tokyo Metropolitan Government, Fukuoka City, Niigata City, etc. have started accepting applications for the "Startup Visa Program" (Entrepreneurial Incentives for Foreigners). (For more information, see “How to Set Up Business in Japan:Section 2. Promoting acceptance of foreign entrepreneurs.”)
Subtotal 47,560 N/A

3. Obtaining visas[More details]

About US$2,000(unit: $US; 1US$ =JPY105.14)

Obtaining visas
Details Cost for subsidiary company and branch Criteria/Remarks
Temporary visitor visa (short-term stay visa) 0 Japan has taken measures concerning the Visa Exemption Arrangements with 68 countries and regions (as of November 2020). But currently, in some countries/regions, visa exemption measures have been suspended for the time being, as a border measures against novel coronavirus (COVID-19). Please see theMinistry of Foreign Affairs websiteExternal site: a new window will openfor details.
Certificate of eligibility through proxy (work or long-term stay visa) 1,900 Commission to professional (proxy) varies depending on type of visa.
Subtotal 1,900

4. Setting up an office [More details]

About US$38,000~US$48,000(unit: $US; 1US$ =JPY105.14)

Setting up an office
Details Cost for subsidiary company and branch Criteria/Remarks
Rent (3 months) for temporary office
(includes security deposit)
0~9,510 Assuming the use of a temporary office until finding an official location, for a period of up to three months.
Rental fees and required deposits vary among private companies and public organizations that offer such facilities. JETRO IBSCs provide free temporary office space (for up to 50 business days).
Monthly rent 3,160 A typical rent for a 50 sq.m office in Tokyo's Minato ward. SeeComparative Survey of Investment-Related Costsexternal linkfor details. Security deposit is equivalent to ten months' rent.
Security deposit (approximately 10 months of rent) 31,610
Real estate brokerage fee (equivalent to one month's rent) 3,160
Subtotal 37,930~47,440
  1. *

    In addition to the above, it costs about 0.5 million yen to purchase office furniture and office automation equipment, communication expenses, etc

5. Hiring local personnel[More details]

About US$20,000(unit: $US; 1US$ =JPY105.14)

Hiring local personnel
Details Cost for subsidiary company and branch Criteria/Remarks
Fee paid to recruiting agency for hiring a manager 20,830 Equivalent to 35% of expected first year salary (Manager class in the non-manufacturing sector). SeeComparative Survey of Investment-Related Costsexternal link for details.
Subtotal 20,830

6. Setting up housing (for foreign national) [More details]

About US$6,000(unit: $US; 1US$ =JPY105.14)

Setting up housing (for foreign national)
Details Cost for subsidiary company and branch Criteria/Remarks
Monthly rent (includes maintenance fee) 1,540 Based on average rent for 50 sq.m apartment in Tokyo's Bunkyo ward. SeeComparative Survey of Investment-Related Costsexternal link for details.
Deposit two month's rent, key money two month's rent. 3,080 There has been a trend towards reduced or no deposit and key money in recent years.
Real estate brokerage fee (equivalent to one month's rent) 1,540
Subtotal 6,160

Reasonable business costs of Japan compared to major cities of the world

Comparison of business costs in major cities(Tokyo = 100)

office Rent

office Rent
Tokyo Yokohama Nagoya Osaka Hong Kong Seoul Singapore New York San Francisco London Paris
100 58 65 78 195 87 127 219 131 187 105

Parsonnel Expenses(Engineer In Manufacturing)

Parsonnel Expenses(Engineer In Manufacturing)
Tokyo Yokohama Nagoya Osaka Hong Kong Seoul Singapore New York San Francisco London Paris
100 105 105 95 73 71 87 226 245 129 176
  1. *

    You can download investment-related cost data from 111 cities worldwide from JETRO’s Comparative Survey of Investment-Related Costs

(As of November 2020)

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