BusinessJapan3 Reasons Why You Should Register Business In Japan

December 1, 2021by Tetra Consultants0

Japan has always been seen as a sort of anomaly in today’s global, interconnected economy. Whilst many countries like Singapore have managed to build an economy centred on trade or foreign investments, Japan has always had a low level of exports relative to the size of its GDP. It also receives much less foreign investment as compared to other similarly sized developed countries, and even receives less foreign direct investments than smaller countries. Despite this, they were still the world’s second-largest economy until they were overtaken by China in 2010. They are currently the third-largest economy in the world. While economic growth was previously largely driven by keiretsus that were born in the Japanese post-war economic miracle, these structures became outdated as they lacked the flexibility of smaller corporate structures. Hence, many bureaucratic barriers to register business in Japan for foreigners were removed, and they were now allowed to register company in Japan in “non-sensitive industries”.

However, certain industries of strategic importance such as the defence, cybersecurity and telecommunications and aerospace industries continue to have ownership limits for foreigners, and also require pre-screening for foreign investors purchasing a stake of 1% or more. Fortunately, the introduction of the godo kaisha or Japanese limited liability company by the Companies Act 2006 made it even easier and cheaper for foreign entities to register company in Japan. Apart from this, there are also several other reasons why you should register business in Japan.

3 top reasons to register business in Japan


#1 Favourable macroeconomic environment

  • Japan has a highly favourable macro-economic environment in place which makes it easy to do business. It ranked 29th on the World Bank’s 2020 Ease of Doing Business Index, which is the 6th highest score in Asia. As previously mentioned, Japan has made it significantly easier for companies to be incorporated and managed, which has also contributed to this. This is due to the fact that there are low minimum requirements to setting up a business in Japan, as there is no minimum capital requirement, and only 1 director and shareholder is needed. Unlike certain countries, there are no residency requirements for directors or shareholders, and applications do not need to be submitted through a registered agent. This business structure is also easy to manage with minimal compliance costs, whilst providing liability protection.
  • In addition to being easy to set up a business, Japan also possesses one of the most complex and well-developed economies in the world. The Atlas of Economic Complexity is a data visualization tool based on research from Harvard University’s Growth Lab which released an Economic Complexity Index that provides an indication as to the knowledge present in an area. This is evaluated based on the knowledge accumulated by the population or present in the economic activities of the country. Japan has consistently topped this index since its release in 2000, exemplifying the strength of their economy and the availability of expertise for your business to tap on, should you choose to start a business in Japan.

#2 Well-regulated and strong financial sector

  • The financial sector in Japan is regulated by the Financial Services Agency of Japan (JFSA) but is unique in the sense that there are multiple layers of regulators which work together to ensure the compliance of the Japanese financial sector to international standards, the comprehensiveness of standards in offering adequate protection to users and responsiveness to new developments without bureaucratic delays. They work alongside the Japan Financial Intelligence Center (JAFIC), the Japanese financial intelligence unit, to track and monitor suspicious transaction reports to flag out possible money laundering or terrorist financing activities. Both these organizations then serve as the link between the international regulatory bodies and the Japanese financial sector. These bodies are the Financial Action Task Force and Egmont Group respectively. Holding the Japanese financial market accountable to international standards is one of the ways that the JFSA maintains the reputation of Japan as a financial hub, and this makes carrying out business activities more simple and convenient for foreign investors. 
  • The JFSA also administers self-regulated organizations which help to implement and enforce regulations for the individual financial services within the sector. These organizations are usually made up of industry experts within these specific fields and would be more attuned to the needs of their individual industries. This gives these organizations both the ability and mandate to be able to nimbly enact meaningful legislation. This is one of the main reasons why the individual Japanese financial markets can be so much more responsive as compared to other international competitors that often get slowed down by bureaucratic barriers. 
  • In the case of the Japan Virtual and Crypto Assets Exchange Association (JVCEA), they also help potential licensees to meet the necessary requirements for registration, making these markets more accessible to new entrants as well.

#3 Strong culture of innovation

  • As previously mentioned, Japan has one of the most complex economies in the world. This can be largely attributed to the strong culture of innovation in the country which has allowed it to be one of the biggest research and development (R&D) centres of the world, with numerous patent filings in the country. The country is also one of the world leaders in high-tech manufacturing and precision manufacturing, with special regions such as the Kanto region or the Kansai region specifically geared towards such activities. They are also currently the largest manufacturer of electronic goods, and the third-largest manufacturer of automobiles. In particular, efforts by Japanese automobile manufacturers to introduce hybrid vehicles alongside their traditional fuel-powered variants have allowed the Japanese automobile industry to sustain its dominance even as consumers become increasingly environmentally aware. 
  • The country is also making a push to Society 5.0, the data-driven economy, or as defined by the Japanese Cabinet Office, “A human-centered society that balances economic advancement with the resolution of social problems by a system that highly integrates cyberspace and physical space.” With this, the government hopes to integrate many of Society 4.0’s achievements, such as artificial intelligence, the Internet and big data into the everyday lives of citizens, in order to maximize the quality of everyday life and formulate more improved solutions. The Japanese Government has backed up these ambitious plans with calls for greater data governance which would better facilitate sharing of non-personal, non-sensitive information between countries, and thus greater advancements in Society 5.0. This would surely continue the strong culture of innovation that is already present in Japan.

How can Tetra Consultants assist you to register business in Japan?

Japan company registration is straightforward if you are familiar with the process. With Tetra Consultants leading the engagement, you will be able to channel your time and energy into other more important aspects of business.

With our lean-and-mean mentality, you can rely on our experienced team to provide you with a seamless experience throughout the whole process of Japan business set up. Our ultimate goal is for you to conduct business with your Japan company within the stipulated time frame.

Our service package includes everything you will require for Japan company registration:

  • Company registration with the Japan Registry Office (Houmukyoku)
  • Local company secretary and registered office in Japan
  • Opening local or international corporate bank account
  • Provision of Japanese nominee director
  • Tax registration
  • Annual accounting and tax services

Contact us to find out more about how to register business in Japan. Our team of experts will revert within the next 24 hours.

Tetra Consultants

Tetra Consultants is the consulting firm that works as your advisor and trusted partner in your business expansion. We tell our clients what they need to know, instead of what they want to hear. Most importantly, we are known for being a one-stop solution for our valued clients. Contact us now at for a non-obligatory free consultation. Our team of experts will be in touch with you within the next 24 hours.

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