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Japan - DOING BUSINESS


Local business incentives


Prefectures are likely to grant to companies setting up on their territory, diverse exemptions and/or tax reductions and local land tax, especially for land purchase in order to build a factory.
Companies setting up in Japanese free trade zones can benefit from customs duties and consumption tax exemptions and reduced tax rates. For further information about investment incentives, foreign investors should contact the METI (Ministry of Economy, Trade and Industry) and the JETRO.


Legal forms of companies


Form Number of partners/shareholders Minimum and/or maximum capital Liability Registration fee Release of financial documents
Kabushiki Kaisha (KK) is a Public Limited Company.   No minimum since the reform of the Trade Code. At least 3 administrators, with no condition of residence   Minimum YEN 10 million, no maximum   Liability is limited to the amount contributed.   0.7% of the capital with a minimum of YEN 150,000   Only companies quoted in the stock-exchange have to publish their accounts  
Yugan Kaisha (YK) is a Private Limited Company.   Maximum 50 shareholders.   YEN 3 million   Liability is limited to the amount contributed by each partner.   YEN 60,000   Only companies quoted in the stock-exchange have to publish their accounts  
Gomei Kaisha is a General
Partnership.  
Minimum 2 partners.   No minimum capital.   Liability is unlimited.   YEN 60,000   Only companies quoted in the stock-exchange have to publish their accounts  
Goshi Kaisha is a Limited Partnership.   No minimum. 2 types of partners: active partners and sleeping partners.   No minimum capital.   Active partners have an unlimited liability. Sleeping partners have a limited liability depending on the amount contributed.   YEN 60,000   Only companies quoted in the stock-exchange have to publish their accounts  


Registration and licensing procedures


Status must be drawn up in Japanese and guaranteed in a deed drawn up by a solicitor. Otherwise, the investor has to carry out the notification required by the Law on exchange controls with the Bank of Japan.


Legal framework


The Laws regulating foreign investments in Japan are the following:
- Foreign Exchange and Foreign Trade Control Law (December 1st 1949) revised in April 1991 and 1998
- The Statement on Openness of Japan's Foreign Direct investment Policy of June 1990.
- The Import and Inward Investment Promotion Law, coming into force in June 1992 and which application has been extended, on April the 1st of 1995, up to 2005.


Foreign exchange control


Currency exchange controls have been liberalised since April 1998. Consequently, free conversion of currencies is carried out as well as the right to transfer profits and capital at an applicable ruling exchange rate.


Regulations concerning equity investment


A majority holding interest in the capital of a local company is legal. However, the Finance Ministry must be informed as well as the other competent Ministries, according to the expected activities. Beforehand, The Bank of Japan must receive notice to this operation.  


FDI inflows in Japan




FDI inflows (millions US$) 2000 2001 2002 World rank
Foreign Direct Investments (F.D.I.) 9239   6324   7816   16 / 196
Sources : UNCTAD Database FDI/TNC


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Last modified in December 2003
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