Different Types of Companies in Japan

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Choosing the Type of Company to Establish in Japan

Kabushiki Kaisha (KK)Godo Kaisha (GK)
StructureLimited liability company by shareUsed by small and medium sized companies and functions more like a partnership
CredibilityWidely known, the most credible form of company in JapanNewly introduced in 2006 to replace Yugen Kaisha. Still not very well known
Setting up costsAround 500,000 yen
including our fees and relevant costs
Around 300,000 yen
including our fees and relevant costs
GovernanceInvestors / owners (shareholders) and managers of the company (Directors) are separated (a shareholder can become a director at the same time)Owned and managed by partners. Necessary to invest (regardless of the amount) in order to manage the company.
Minimum number of people requiredAt least one shareholder and one Representative Director (can be the same person)At least one partner
Publication of financial statementsNecessaryNot necessary
Directors term of office1 to 10 years with possibility of re-election (which needs to be registered)No fixed term
Profit sharingTied to the investment rate (number of shares held)Possible to decide freely without being bound to the investment rates
AdvantagesEasily recognized or trusted when working with big Japanese companies. Possible to appoint directors who don’t hold shares.Useful when you have partners who can contribute by providing their knowledge, skills or network without making large financial contribution.
DisadvantagesMore expensive when setting upLess credible

It is possible to change from GK to KK, or from KK to GK, after the company is registered. The costs of the transformation is about the same as the difference in the setting up costs between KK and GK (around 200,000 yen).

Which should I choose, KK or GK?

  • If you have sufficient funds for and will work regularly with Japanese companies: KK
  • If you budget is limited and the main clients/customers will most likely be individuals or foreign companies: GK
  • If you intend to have other investors or to transfer/sell shares in the future: KK
  • If you wish to divide the profit (dividends) with different percentage than the actual investment rate (for having partner(s) who will provide workforce, skills or know-how rather than contributing financially): GK
  • If you are the sole investor/manager of the company and wish to set up a company in the easiest and fastest way: GK
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