Japan company formation is difficult, due to its complicatedincorporation procedures. Conversely, Japan is positively ranked as the world's 15th easiest place to do business in the World Bank's Doing Business 2010 Survey. In addition, the Heritage Foundation's 2010 Index of Economic Freedom ranks Japan as the world's 19th-freest economy, a factor which encourages Japan company formation.

Additionally, Japan positively ranked the world's 17th least corrupt country in the 2009 Corruption Perceptions Index by Transparency International, a global measure of corruption amongst public officials and politicians.

Japan's economy has been growing for three decades, although not at the high growth rates experienced in emerging economies such as China and India. Investors pursuing Japan company formation enter a mature economy driven by the manufacturing and services sectors. However, the Japanese economy is negatively impacted by deflation, which restricts growth by dampening consumer spending.

Despite its sluggish economic growth, Japan is home to 291 of the companies listed on the Forbes Global 2000, a ranking of 2,000 international companies based on sales, profits, assets and market value. Japan is also listed as 8th on the World Economic Forum's Global Competitiveness Report 2009-2010.

However, Japan’s economy is vulnerable to soaring energy costs, including crude oil. Japan must import more than 80% of its energy needs. High energy costs inflate consumer prices.