Expand Business in Japan

Global Upside helps businesses expand into Japan by providing talent acquisition, human resources, accounting, payroll, tax, incorporation, and professional employer organization (PEO)/employer of record (EOR) services. Our comprehensive offerings create an end-to-end solution that helps you establish your business and optimize your operations, all while maintaining compliance with Japanese laws and regulations.

The hiring and incorporation processes in Japan are often complex, time-consuming, and involve numerous legal and compliance challenges. Global Upside simplifies these processes and lifts the compliance burden from your business. Our teams have the experience and expertise required to help you establish a legal entity in Japan. We also offer PEO/EOR solutions to companies interested in hiring employees quickly, without setting up a legal entity in the country.

Capital City



Japanese Yen (¥)




Constitutional Monarchy

Country Overview

Set in the northwest Pacific Ocean, Japan is an island nation in East Asia with a population of 126.2 million. Japan is culturally rich and famous for its animation, art and craft, cuisine, music, and many other industries. Major export industries here include consumer electronics, automobiles, computers, metals like iron, steel, copper, and semiconductors.

  • The service sector dominates the economy in terms of GDP and employment.
  • Japan is one of the world’s largest producers of high-technology manufactured goods, steel, and motor vehicles.
  • Japan’s main imports include petroleum oils and gas, transmission apparatus for radiotelephony coal and solid fuels, and electronic integrated circuits.

Legal Entity Setup

Options for setting up a legal entity in Japan include:

Registered Branch

A registered branch is the most commonly used setup by overseas corporations that are interested in expanding their business in Japan without forming a subsidiary. The company must appoint at least one delegate in Japan.

Kabushiki-Kaisha (KK)

A kabushiki-kaisha (KK) is a legal entity setup that closely resembles a C-corporation. The obligations of the stockholders in a KK are limited and it is a well-established arrangement irrespective of the presence of a board of directors.

Godo-Kaisha (GK)

A Godo-Kaisha (GK) is a legal entity set up that closely resembles an LLC. This form of setup permits extra flexibility concerning management choices and corporate laws. Since there are fewer formal corporate laws that must be maintained, the requirement set-up costs are usually lower.

It takes a minimum of 4 weeks to set up a legal establishment in Japan.

Human Resources

The three most impactful labor laws in Japan are:

  • Trade Union Law (TUL)
  • Labor Relations Adjustment Law (LRAL)
  • Labor Standards Law (LSL)

Workers who are covered by the Japanese Employment Act can be divided into the below-mentioned categories:

  • Regular or non-fixed term employees
  • Fixed-term employees (employment term 3 years or less)
  • Part-time employees (working hours are less than those of regular staff)
  • Temporary employees (governed under the Temporary Staffing Services Law and are employed by the temporary staffing firms)

With reference to the labor law of Japan, the following information needs to be included in all employment contracts:

  • Duration of the employment agreement
  • Job description and location
  • Working hours, breaks, and overtime and shift changes
  • Salary calculation and bonus
  • Termination and notice period

The national holidays set by the government each year are as follows:

  • Jan. 1: New Year’s Day
  • Second Monday in January: Coming of Age Day
  • Feb. 11: National Foundation Day
  • Vernal Equinox (date in March varies)
  • April 29: Showa Day
  • May 3: Constitution Memorial Day
  • May 4: Greenery Day
  • May 5: Children’s Day
  • Third Monday in July: Marine Day
  • August 11: Mountain Day
  • Third Monday in September: Respect for the Aged Day
  • Autumnal Equinox (date in September varies)
  • Second Monday in October: Health and Sports Day
  • Nov. 3: Culture Day
  • Nov. 23: Labor Thanksgiving Day
  • Dec. 23: Emperor’s Birthday


Salaries are paid once a month, usually on the 25th of each month.


Accounting Standards in Japan are established by the Accounting Standards Board of Japan (ASBJ) and are designated as Japanese GAAP by the Financial Services Agency of Japan.

Tax & Compliance

Corporate Tax

The tax rate in Japan is 23.2%. This rate is applicable to companies with business share capital that exceeds JPY 100 million.

Value Added Tax (VAT)

The VAT rate, also known as Consumption Tax in Japan, is 10%. A reduced rate of 8% is applied to food, drinks, and tabloid subscriptions.

Data Privacy

The Act of Protection of Personal Information (APPI) regulates the purposes for which an employer uses personal information of the employee. It is pivotal that all practical steps to govern the security of employee personal data be taken care of by the corporation.

Anti-Bribery & Anti-Corruption Law

There are two significant anti-bribery laws in Japan:

  • Act No. 47 of 1993 of the Unfair Competition Prevention Act (UCPA)
  • Act No. 45 of 1907 of the Japanese Penal Code

Corruption and bribery of Japanese public officers are governed by the Penal Code.

  • 1. Bribery of Public Officials:
  • For Individuals:
    • i) Imprisonment for up to 3 years
    • ii) A fine of JPY 2.5 million

    For Businesses:

    • i) Cancellation of business license
    • ii) Monetary fine

    The Penal Code does not identify bribery of private sector officials as a crime, though the presence of the Companies Act does punish both of the parties involved.

  • 2. Bribery of Private Officials
  • For Individuals:
    • i) Imprisonment of up to 5 years
    • ii) A fine of JPY 500,000