How Much Capital Do I Need to Prepare to Start a Business in Japan?

When Taiwanese entrepreneurs consider starting a business in Japan, one of the most critical questions is: how much cash is needed? In reality, the required capital varies depending on the type of company, business model, operating scale, and visa requirements. In our previous article, we introduced the general procedures for establishing a company in Japan. In this article, we will focus on the capital requirements and practical recommendations for setting up a business in Japan.

Types of Companies in Japan

The most common types of companies established by foreign nationals in Japan are:

• Kabushiki Kaisha (KK) – equivalent to a corporation or joint-stock company in Taiwan.

• Godo Kaisha (GK) – similar to a limited liability company.

According to the Japanese Companies Act, there is no legal minimum capital requirement—a company can technically be incorporated with just 1 yen. However, in practice, if the investor intends to apply for a Business Manager Visa (経営・管理ビザ), the capital amount must meet the immigration standards.

Capital Requirements and Business Manager Visa

If you plan to reside in Japan and serve as a company executive, you will need to apply for a Business Manager Visa. According to the Immigration Services Agency of Japan, applicants must meet one of the following conditions:

• Invest at least 5 million yen and establish a physical office in Japan.

• Hire at least two full-time employees who are either Japanese nationals or have legal residency status (excluding the applicant).

For most Taiwanese entrepreneurs, the standard approach is to invest 5 million yen as capital and apply for the Business Manager Visa.

Additionally, to comply with visa requirements, the company must have a physical office. Virtual offices or co-working spaces without private rooms are not acceptable for visa purposes.

Other Required Funds

Besides capital, starting a company in Japan involves additional initial and operational costs:

1. Company Registration and Setup Fees

• Kabushiki Kaisha: Approx. ¥200,000–¥250,000 (includes notary fees and stamp tax)

• Godo Kaisha: Approx. ¥60,000–¥100,000 (no notary required)

• Professional Service Fees: If you hire a legal service provider, expect to pay around ¥100,000–¥200,000.

2. Office Rent

As the Business Manager Visa requires a physical business location, renting an office is mandatory. Rental costs vary widely based on location and office size. Generally, monthly rent ranges from ¥50,000 to ¥150,000. In cities like Tokyo or Osaka, a small private office suitable for one person usually starts around ¥50,000 per month.

3. Staff and Operational Expenses

If you plan to hire employees or manage the company in Japan yourself, consider the following costs:

• Employee salary: At least ¥250,000–¥300,000 per month

• Insurance and taxes: Approximately 15–30% of salary

4. Accounting and Tax Services

Monthly bookkeeping and annual tax filing fees vary depending on revenue. For small businesses with annual sales under ¥10 million, accounting and tax services may cost around ¥250,000 or more annually.

Recommended Startup Capital

Based on the above, the recommended initial capital for setting up a company in Japan is summarized as follows:

Item	Amount (in ¥10,000)	Notes
Capital	500	Minimum for visa application
Setup fees	20–50	Varies by company type
Office rent (3 months)	15–45	Must be a private, physical office
Basic operations (3 months)	300	For day-to-day business needs
Accounting & tax services	25	Based on revenue under ¥10M/year
Total recommended	920	Approx. NT$1.9 million

Please note that the estimate only covers the essential costs. You should also consider additional personal and family-related expenses, such as:

• Living expenses in Japan

• Housing rental or mortgage

• Schooling costs for children

• Additional business working capital

Final Thoughts

For Taiwanese, setting up a company in Japan is relatively straightforward in terms of legal procedures. However, the real challenges lie in navigating unfamiliar regulations, tax laws, language barriers, and cultural differences in business practices.

To improve your chances of success, it's wise to consult professionals early, carefully plan your budget, and fully understand visa and legal requirements before launching your business in Japan.