Comprehensive Guide to Starting a Business in Japan: Taxes, Accounting, and Compliance

Starting a business in Japan involves more than just registering a company. You also need to understand Japanese tax rules, social insurance, accounting obligations, and important tax elections that can significantly affect your future tax burden.This guide brings together the essential articles you should read before and after launching your

Business Essentials for All Entrepreneurs in Japan

■Consumption Taxes

• ・Basic Knowledge of Japanese Consumption Tax
  An Easy Explanation of Consumption Tax for Doing Business in Japan
• ・Should You Register as a Qualified Invoice Issuer?
  Japan’s Qualified Invoice System Explained: A Simple Guide for Foreign Business Owners
• ・Should You Elect the Simplified Consumption Tax System?
  Understanding Japanese Consumption Taxes: Simplified Consumption Tax System
• ・Consumption Tax on Real Estate Purchases for Private Lodging Businesses
  Consumption Tax on Real Estate Purchases for Private Lodging Businesses in Japan

■The Obligation of Keeping Ledgers and Documents

• ・Seven-year record-keeping obligation
  What Happens in Japanese Tax Audits if You Discard Ledgers and Documents?
• ・The Electronic Record-Keeping Law
  Japan’s Electronic Record Keeping Law: A Practical Guide for Businesses

■Blue Return Tax System

• Blue Form (Aoiro Shinkoku) in Japan: Benefits and Deadlines

■Tax Saving Strategies

• ・Mutual funds
  Effective Ways to Save Taxes When Running a Business in Japan

■Business Manager Visa Renewal

• Business Continuity During the Renewal of Management Visas in Japan

■Social Insurance

• ・You are obligated to enroll in social insurance.
  Is Social Insurance Mandatory for Foreign Entrepreneurs in Japan?

■International Tax Topics

• ・Foreign Tax Credit
  Foreign Tax Credit for Non-Permanent Residents in Japan
• ・Statement of Assets and Liabilities
  Japan’s Statement of Assets and Liabilities: Reporting Worldwide Assets
• ・Statement of Overseas Assets
  Do You Need to the Statement of Overseas Assets in Japan?
• ・Controlled Foreign Company (CFC) Rules
  Japan’s Controlled Foreign Company (CFC) Rules: A Guide for Foreign Business Owners

■U.S.-Specific Topics

• ・U.S. LLC Owners
  U.S. LLC Tax Issues for Japan Residents: PE Risk, Remittance Taxation, and Foreign Tax Credits
• ・How to File a Japanese Tax Return as a U.S. Non-Permanent Resident
  How to Prepare a Japanese Tax Return for U.S. Non-Permanent Residents
• ・How U.S. Income Is Taxed After Moving to Japan
  Moving to Japan? How Your U.S. Income Will Be Taxed

■Inheritance & Gift Tax

• ・Inheritance Tax in Japan
  Inheritance Tax in Japan: A Practical Guide
• ・International Inheritance and Gift Tax
  International Inheritance and Gift Tax in Japan: Who Pays Tax on Worldwide Assets?

■ Other Things You Should Know

• ・Understanding the Year-End Tax Adjustment
  Understanding Japanese Taxes: Year-end Tax Adjustment
• ・Withholding Income Tax Obligations
  Withholding Income Tax: Key Info for Starting a Business in Japan
• ・Property Taxes in Japan
  Essential Tax Information When Starting a Business in Japan: Property Taxes
• ・Tax Returns and Penalties
  The Penalty for Filing Late Tax Returns in Japan
• ・Exit Tax on Securities
  Japan Exit Tax on Securities: What You Need to Know Before Leaving Japan
• ・Remittance-Based Taxation for Non-Permanent Residents
  Non-Permanent Resident Tax Rules in Japan: What Foreign Residents Should Know
• ・Incorporation
  What Are the Advantages of Incorporation for Sole Proprietors in Japan?
• ・Individual tax status
  Non-Permanent Resident Tax Rules in Japan: What Foreign Residents Should Know

Additional Considerations for Corporations

■Corporate Tax Rates in Japan

• Japan Corporate Tax Rate Explained

■What You Should Decide Upon

• ・How much will your company’s paid-in capital be?
  Recommended Paid-In Capital for Starting a Corporation in Japan
• ・When will you set the end of the fiscal year?
  Choosing the Best Fiscal Year-End for a New Company in Japan
  How the Tax Office Selects Audit Targets in Japan
• ・How Much Should Directors’ Compensation Be?
  Director Compensation in Japan: When Can You Change It?
  Setting Director’s Compensation: A Key Step When Starting a Company in Japan

■Tax Saving

• ・Company house and travel allowance
  Effective Ways to Save Taxes When Running a Business in Japan part 2

■ Other Things You Should Know

• ・Per Capita Levy
  Per Capita Levy for Corporations in Japan: What to Know, Even with a Deficit
• ・The system of individual tax in Japan for salaried individuals
  Understanding Individual Income Tax in Japan for Salaried Employees
• ・Required documents for corporate tax filing in Japan
  Required Documents for Corporate Tax Filing in Japan

Need Professional Assistance?
Starting a business in Japan involves many important tax and accounting decisions. If you’re unsure which options are best for your situation, we’re here to help.
At Koshida Accounting and Tax Office, we support foreign entrepreneurs with company formation, bookkeeping, tax filing, social insurance, and ongoing business advisory services.
Feel free to contact us for a consultation.