If you already export goods overseas as a sole proprietor, in regards to saving on taxes, you need to also consider when to incorporate.

”Corporation” or “Limited Liability Company”?

If you’re in the business of providing goods or services to foreigners, and factors such as keeping initial costs to a minimum are priorities, then there is an option of a “limited liability company”. On the other hand, if you’re focused on Japanese customers, you might have to concern yourself with the name value of being established as a “corporation”.

”Company” or “branch”?

It’s necessary to consider what types of companies there are, along with their respective merits & demerits. Depending on those, there are differences in the tax system, application procedures, and more. Care must be taken, as there may be regulations for the form of business entry according to whether a company or branch, depending on the type of business.

You need to confirm as well whether the business requires permits and/or licenses, depending on the objectives. For exporting, some goods require approvals by both the exporting and importing nations. Besides, about naming, you need to consider whether a Japanese name or English one is preferable, and if it is appealing to Japanese consumers.

Needless to say, it is necessary to pay attention to regulations on foreign capital. On the other hand, there are cases where investment promotion organizations and preferential treatment are prepared for investments of foreign capital. Therefore, it is wise to make the most of arrangements which are useful.

When you decide your business objectives, it is necessary to be aware that there may be restrictions on the products and services that can be provided, depending on the content.

When a foreigner invests money as an executive officer, depending on conditions, an investment amount of more than 5 million yen may be necessary to obtain an investment management visa or business management visa.

There are cases in which limits are placed on investment amounts. Also, there are situations where approval is required for investment.

It is probably a good idea to confirm if a month other than December (i.e., a fiscal year) would be possible for the accounting period. As the accounting years for many foreign-owned subsidiaries end in December, in some cases the amounts paid to accounting offices may be less if one shifts to another settlement term.
It is also important to know whether articles of incorporation are required not only in Japanese but also in your native language, and if so, what kind of contents they should contain. Furthermore, even if articles are not required, one needs to know what should replace them. Depending on the type of business, it may take a long time to complete the incorporation process, and there may be a risk of not being able to start the business at the scheduled time, so it is important to prepare articles of incorporation and other documents that will pass examination as easily as possible.

It is necessary to have sufficient knowledge about the documents to be submitted and registration taxes, such as whether registration is required in countries other than Japan, and if so, what kind(s) of registration is required, and even if it is unnecessary, whether an alternative is required.

It is necessary to check what kind of government offices there are in Japan, where they have jurisdiction, and where/what you need to notify (about). In some cases, because it takes a long processing time at the government office, there is a risk of not being able to start your business at the scheduled time. Therefore, it is important to have plenty of preparation time.