To K.K. or to G.K. your business in Japan

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So you have decided on starting a company in Japan. Congratulations!!! this is usually one of the most difficult decisions to make. So good on you for making the big leap forward.

K.K. or G.K.

Your next decision will be to start a K.K. (株式会社 – Kabushikigaisha) or G.K. (合同会社 – Goudougaisha) business entity.

The G.K. is a newer entity (replacing the 有限会社 – Yugengaisha), similar to an LLC (Limited Liability Company), and is a lot easier and cheaper to setup compared to the K.K. The setting up of a G.K. costs about 130,000 JPY, compared to ~240,000 JPY in tax and notification fees for starting a K.K.
(Note that both are Limited Liabilities, and can be started by one person, and can be started with a 1 yen capital).

We did not pursue the G.K., as most Japanese businesses tend to put more trust on traditional K.K.s rather than a G.K., as the G.K. entity is still less known.
(Do a search in Google to find more details in the difference between a K.K. and G.K. Try keywords ‘japanese entity kk  gk’.)

The estimated costs to starting a K.K company (as of Dec. 2012)

Article of Incorporation

Item Japanese name Cost (JPY)
Certification of articles of incorporation fee 定款の認証料 50,000
Revenue stamp fee * 収入印紙代 40,000
Transcript fee 謄本手数料 250

* There is an option for submitting the Articles of Incorporation electronically, saving 40,000 JPY.

Organizing Registration

Item Japanese name Cost (JPY)
Registration License Tax 登録免許税 150,000
Certified copy of register 登記簿謄本 1,000
Company seal registration certificate 会社印鑑証明書 500

Total is about 240,000 JPY (even though you could start a one yen company, it costs you much more to incorporate the company!).

Through this site, I will explain the costs in later posts, as well as decisions we made to minimize costs.

For professional advice, please consult a Licensed Tax Accountant (税理士 – zeirishi) 🙂

That’s all for today.