Part 2: Preparations for Establishing an LLC (Godo Kaisha) in Japan
office-babaakiraEstablishing a Limited Liability Company (Godo Kaisha, GK) in Japan requires careful preparation to ensure a smooth registration process. This article will cover essential preparations, including basic decisions to make before starting the registration, and key points that foreigners should consider when establishing an LLC in Japan.
1. Key Decisions to Make Before Registration
Before setting up a GK, you’ll need to finalize the following key elements.
(1) Deciding the Company Name
The company name, or trade name, must be determined before registering your GK. The name must include “Godo Kaisha” as part of it, but beyond that, you have significant freedom in choosing the name. The name can include alphabets, numbers, and other characters. However, the name must be unique within the same registered address to avoid confusion with other businesses.
(2) Defining the Business Purpose
The business purpose defines the scope of activities for the GK, and it must be clearly stated in the Articles of Incorporation. It is essential to be specific, as vague descriptions may lead to issues when applying for certain permits or licenses. Clearly defining the business purpose can facilitate smoother interactions with authorities.
(3) Deciding the Head Office Location
Your GK’s head office must be located in Japan. Many startups use virtual or rental offices, but if you plan to apply for a Business Manager Visa, having a physical office is often recommended. Securing an office address in advance can streamline later steps in the registration.
(4) Choosing Members and Managers
In a GK, members also function as the managers (executive members) of the company, meaning they are both investors and active participants in managing the business. Decide who will be contributing capital and taking part in management from the start. Foreign members are not required to reside in Japan, but appointing a reliable partner or representative in Japan can help operations proceed more smoothly.
2. Deciding on and Preparing the Capital Amount
Determining the amount of capital and ensuring it is prepared and accessible are key steps before registering a GK.
(1) Setting the Capital Amount
Although there is no minimum capital requirement for setting up a GK in Japan, ¥5 million or more is generally recommended if you intend to apply for a Business Manager Visa. The capital will also serve as the GK’s operational funds, so setting an appropriate amount based on the business plan is crucial.
(2) Capital Payment Process
Once decided, the capital must be deposited into a member’s bank account. If foreign members do not have a Japanese bank account, they may need to open one in Japan or arrange for a transfer from a foreign account. In the case of a foreign transfer, it’s essential to verify with the bank and the tax office in Japan that this arrangement will meet the requirements.
3. Arranging a Local Address and Contact Information
For foreign nationals not residing in Japan, arranging a local address and contact information is essential for smooth communication and business operations.
(1) Securing an Address
To establish the GK’s head office, many choose to use virtual or shared office spaces. If you are applying for a Business Manager Visa, a physical office space is typically required. If finding an office is challenging, consider consulting a local business service provider or using a rental office provider with options for foreigners.
(2) Setting Up Contact Information
To operate a business in Japan, you must have a reliable way to be contacted locally. This means establishing a Japanese phone number and email address to maintain effective communication with clients and business partners. Designating a representative in Japan who can handle daily communication and serve as a point of contact can also be highly beneficial.
Summary
Before establishing a GK, it is important to prepare and finalize key decisions, such as the trade name, business purpose, capital, head office location, and contact information. For foreign nationals, understanding Japan-specific requirements and visa considerations is crucial for successful setup.
In the next article, Part 3, we will go through the specific procedures and documentation required to officially register a GK in Japan.
Follow me!
