Which type of a company is the best for my business?


Kabushiki-Kaisha vs Godo-Kaisha

“Kabushiki-Kaisha” (K.K.) and “Godo-Kaisha” (G.K.) are the most common type of company in Japan.  Over 95,000 K.K. and over 37,000 G.K. were newly established in 2021, according to the Japanese Government Statics.

G.K. is a company that is established by a relatively new law.  So, compared to Kabushiki-Kaisha, it is not so familiar to some Japanese people. 

There are legal differences between them as you may check detailed explanation in JETRO’s HP (https://www.jetro.go.jp/en.html).

From tax perspectives, K.K. and G.K. are both domestic companies, and there is no difference in calculating the corporate tax. A Japanese domestic company is subject to its worldwide income.

If you already have a company in foreign country, then starting a business as a “Branch” can be another option. A branch of a foreign company is treated as a “foreign company”, and basically only income attributable to the permanent establishment in Japan is subject to Japanese corporate taxes under the domestic tax laws.   

A quick reference to the difference between Kabushiki-Kaisha, Godo-Kaisha and Branch are as follows:

* There might be other restrictions on the minimum amount of capital under the regulation of Japanese visa.