How Much Capital Do You Need to Set Up a Company in Japan?

The answer

A company can be registered in Japan with capital of JPY 1, as JETRO's cost guide notes. If a founder will live in Japan and run the company on a Business Manager visa, the company needs capital of JPY 30 million, among other conditions. A new company with capital of JPY 10 million or more is liable for consumption tax from its first year. In Tokyo's special wards, the local per-capita levy goes up once the capital is over JPY 10 million. The registration tax stays at its minimum up to about JPY 21.4 million for a KK and about JPY 8.57 million for a GK.

What counts as capital

For a kabushiki kaisha (株式会社, KK), the capital is the amount the shareholders pay in for their shares at formation or on a later share issue (Companies Act, 会社法 Kaisha-hō, Art. 445(1)). Up to half of that amount can be booked as capital reserve instead (Art. 445(2) and (3)). The articles of incorporation state the value of the assets to be contributed at formation, or its minimum (Art. 27(iv)), and the amount of capital is recorded on the company register (Art. 911(3)(v)).

Once the company is registered, the capital is the company's own money, and it can be spent on running the business.

A Business Manager visa: JPY 30 million

Since 16 October 2025, the Business Manager (経営・管理 keiei kanri) status of residence requires capital of JPY 30 million or more, and at least one full-time employee who is a Japanese national, a permanent resident or holds another qualifying status. For a KK, the Immigration Services Agency counts the stated capital and not the capital reserve. The applicant or a full-time employee must also have Japanese at B2 level or above, such as JLPT N2, and the applicant needs a doctoral, master's or professional degree in a relevant field, or at least three years of experience in managing a business. The JPY 30 million is a condition of the status of residence, not of the company's registration.

Consumption tax: the JPY 10 million line

A new company has no base period for consumption tax in its first fiscal years, normally the first two. If its capital at the start of such a year is JPY 10 million or more, it is liable for consumption tax for that year (Consumption Tax Act, 消費税法 Shōhizei-hō, Art. 12-2(1)).

With capital under JPY 10 million, the company can be exempt in those years (Arts. 9(1) and 12-2(1)), but other rules can still make it liable. A rule aimed at subsidiaries makes a new company liable if another party holds more than 50% of its shares and that party, or a company related to it, had taxable sales over JPY 500 million or total revenue over JPY 5 billion in the corresponding period (Art. 12-3(1)). Registering as a qualified invoice issuer also takes the company outside the small-business exemption (Art. 9(1)). For a subsidiary of a large group, keeping the capital under JPY 10 million may not change its consumption tax position.

The local per-capita levy

The local corporate inhabitant tax includes a per-capita levy, which is based on the company's capital and number of employees rather than its profit. For a company with offices only in Tokyo's special wards and 50 or fewer employees, it is JPY 70,000 a year with capital of up to JPY 10 million, and JPY 180,000 with capital over JPY 10 million and up to JPY 100 million, according to JETRO's tax overview.

The levy is measured by the company's "capital etc." (資本金等の額 shihonkin-tō no gaku). Where that figure is lower than the capital and the capital reserve added together, the combined amount is used instead (Local Tax Act, 地方税法 Chihōzei-hō, Arts. 52(4) and 312(6)). So for this levy, moving part of the payment into capital reserve makes no difference.

The registration tax

The registration tax on formation is 0.7% of the capital, with a minimum of JPY 150,000 for a KK and JPY 60,000 for a godo kaisha (合同会社, GK). The minimum covers capital of up to about JPY 21.4 million for a KK and about JPY 8.57 million for a GK. The tax is calculated on the capital, so an amount booked as capital reserve is not counted.

Setting the figure

The capital appears on the company register, which anyone can obtain, so banks and business partners can see it. A very small figure can raise questions when the company opens a bank account or signs its first contracts. We usually suggest an amount that covers the first months of costs and stays under JPY 10 million, unless a visa requires more.

References

• JETRO, How to Set Up Business in Japan: Cost Estimation.
• JETRO, Section 3. Taxes in Japan: 3.3 Overview of Corporate Income Taxes.
• JETRO, Section 3. Taxes in Japan: 3.6 Overview of Consumption Tax.
• Immigration Services Agency, 在留資格「経営・管理」に係る上陸基準省令等の改正について (Japanese).
• National Tax Agency, Tax Answer No. 7191, 登録免許税の税額表 (Japanese).
• Companies Act (Act No. 86 of 2005), Arts. 27, 445 and 911; Consumption Tax Act (Act No. 108 of 1988), Arts. 9, 12-2 and 12-3; Local Tax Act (Act No. 226 of 1950), Arts. 52 and 312 (e-Gov, Japanese).

This article is for general information only and is not legal or tax advice.

To compare the two company types, see GK or KK?. If you are setting up from outside Japan, you can see how our fixed-fee company incorporation works.