Starting a business in Japan is popular among international entrepreneurs who value its market potential as well as its continued reputation for economic stability and transparent legal system, which helps protect intellectual property rights. The following is an overview of the legal and regulatory aspects of starting a business in Japan:

A key positive attribute for foreign investors starting a business in Japan is the country's low perceived corruption levels. Low corruption among Japanese public officials and politicians is a key factor in Japan's rank as the world’s 17th least corrupt country in the 2010 Corruption Perceptions Index by Transparency International.  

Every Japanese company must appoint at least one director, who need not be resident in Japan. When starting a business in Japan, there are no limits on the number of directors. Local and international, corporate and individual directors are allowed. Furthermore, a Japan company requires only one shareholder, who may be either an individual or company.

After starting a business in Japan, annual financial statements, complying with Japanese Financial Accounting Standards, must be prepared. The financial statements accompany an annual corporate tax return submitted to the National Tax Agency. Due to the complexity of Japan's tax system, most international entrepreneurs engage the services of a professional Firm to handle tax matters on their behalf.

After starting a business in Japan, the investor must raise its share capital from 1 Yen (at incorporation) to 10 million Yen (US$103,419.74) within five years.

Japan’s transparent legal system and constitution strongly supports the rule of law and protection of intellectual property rights (IPR). Japan is bound by the terms of the World Trade Organisation’s (WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, offering strong legal protection against IPR infringements.

For more detailed information on the legal and regulatory aspects of starting a business in Japan, purchase our Asia Business Setup book, contact email@healyconsultants.com or call us in Tokyo at +81 345 801 776.