Setting up a Subsidiary Company in Japan, Establishing a domestic company in Japan

To establish a subsidiary company in Japan you may choose either a Joint-stock corporation (KK) or a Limited Liability Company (GK). Other options such as Gomei-Kaisha or Goshi-Kaisha are rarely chosen because equity participants burden is unlimited.
TOKYO, Japan - Nov. 2, 2013 - PRLog -- Establishing a Subsidiary Co in Japan

Joint-stock corporation
(Kabushiki-Kaisha)  KK Co (Kabushiki Joto Seigen Kaisha – If No Committee is Established)


Limited Liability Co / LLC (Godo-Kaisha) GK Co

For incorporation of either a KK or GK company the minimum common criterias are as follows: -

1.    A local address for branch or local co Registered Office address (physical address not PO Box)

2.    A local resident (Japanese or foreigner) as a "Resident Director" (in case of a foreigner his / her Visa status need to be verified and if required change of status may need to be applied at the immigration bureau)

The following features applies to both KK and GK company:

1.    Minimum Number of Directors: 1(one) (But in case of one or several one must be resident of Japan)

2.    Resident Director Required: Yes, at least one must be resident.

3.    Minimum Number of Shareholders: 1(one) {Note in case GK investors are called members [shain]}

4.    Corporate Shareholder Allowed: Yes (In case of corporate shareholding procedure is lengthy & complex)

5.    Resident Shareholder (Member) Required: No.
[For incorporation procedure it is necessary to allocate 1(one) share in the name of the local resident director and use his / her personal bank a/c to transfer the capital amount from abroad as foreign co nor a foreign resident can hold a local bank a/c in Japan. Upon completion of registration this share is transferred back {through internal co doc stating the transfer}. The actual share position need notification to tax office and the name of the promoter & actual share position reflects on tax return docs.]
P.S. The above-procedure is adopted both for KK & GK. But in case of GK the director of a co must be a shareholder (members). In case of GK all members are representatives by default.
(However, if GK promoter(s) decides to stay outside of Japan then there is no other alternative but to hold a amount investment remain in the name of the local resident director.)

6. Liability of equity participants/parent company toward creditors: Limited to amount of equity participation

7.    Company Secretary: Not required

8.    Registered Office: Yes, physicall address is required and P.O. Box address is not allowed.

9.    Minimum Registered Capital: 1 (one) yen

10.  Timeframe for registration: Depends on the type of entity, the way the client wants to form the legal business establishment, i.e. Shareholding, Directors, forming structure, etc. and the client's response time in the whole process. Once all documents are ready / prepared and applied at Legal Affairs Bureau for registration it takes about 2(two) weeks to obtain company registration certificate and company seal registration certificate; and our approx. timeframe for our preparation of documents and procedure are indicated in the flowchart.

11.  Yearly Auditing of accounts: Not mandatory

Basic difference between KK and GK (LLC) company:

In case of Joint-stock corporation
(Kabushiki-Kaisha)  KK Co (Kabushiki Joto Seigen Kaisha – If No Committee is Established)

1. Transfer of equity participation share: May be transferred freely in principle. May be stipulated in articles of incorporation that approval of Board of Directors is needed for transfer of shares.

2.  Number of executives required:  Appointment of 1 or more required. Representative director with right to execute business. If no representative director is appointed, executive officers each have the right of representation.

3.  Legally stipulated term of office for executives: 2 (two) years in principle. Extendable up to 10 (ten) years.

4. Possibility of a Company to be a Director: Not possible

5. Director must be from shareholder / investor (members): Not necessarily

6.  Regular general meeting of shareholders (members): In principle, must be held every year

7. Possibility of public offer of stock (equity participation share): Possible

8.  Possibility of reorganization: A joint-stock corporation (KK) may be reorganized into a limited liability company (LLC) (GK).

9.  Distribution of profits and losses: Allocated according to equity participation ratio

In case of Limited Liability Co / LLC (Godo-Kaisha) GK Co

1.  Transfer of equity participation share: Unanimous approval of equity participants (members) required.

2.   Number of executives required: No legally stipulated minimum. In principle, all members (shareholders) are executive officers, but a representative / executive member may be appointed (shikko shain).

3.   Legally stipulated term of office for executives: No legally stipulated term

4. Possibility of a Company to be a Director: Possible. However, the co should appoint an individual as functional manager (gyomu shikko shain) from the co. to perform management duties. On registration both Co & individual name will appear.

5.  Director must be from shareholder / investor (members): Mandatory

6.   Regular general meeting of shareholders (members): Not required.

7. Possibility of public offer of stock (equity participation share): Not Possible

8.   Possibility of reorganization: A limited liability company (LLC) (GK) may be reorganized into a joint-stock corporation (KK)

9.   Distribution of profits and losses: May be allocated at a different rate from equity participation rate if specified in articles of association

The above info re KK & GK is for illustration

For further details please visit us at

Sarkar Office Japan KK
+81(03) 5631-9127
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