Doing Business in Japan

Published 25 August 2026

In short

Choose between Kabushiki Kaisha (KK) for credibility or Godo Kaisha (GK) for speed. Deposit at least 30 million yen capital for Business Manager visa. File incorporation documents with the Legal Affairs Bureau. Registration completes in one to two weeks and grants legal personality.

Key facts

Capital: Tokyo
Currency: Japanese Yen (JPY)
Trade with India: US$ 27.48 billion in FY 2025-26 (India's exports US$ 6.04 billion, imports US$ 21.44 billion) and US$ 25.17 billion in FY 2024-25 (exports US$ 6.25 billion, imports US$ 18.92 billion), per the MEA India-Japan Bilateral Brief as on 30 June 2026, citing Ministry of Commerce data.
Indian community: Around 59,000 Indians live in Japan, per the MEA India-Japan Bilateral Brief as on 30 June 2026. The composition has shifted in recent years towards IT professionals and engineers, alongside an established community of Indian jewellery merchants in cities such as Kobe.

The market

Japan is the world’s fourth largest economy but India’s trade with it is modest and lopsided. Total trade was US$ 25.17 billion in FY 2024-25 and US$ 27.48 billion in FY 2025-26, with India’s exports at only US$ 6.04 billion against imports of US$ 21.44 billion, per the MEA bilateral brief as on 30 June 2026 citing Ministry of Commerce data. India ranked eighteenth in Japan’s trade with a 1.4 percent share in 2024-25, while Japan ranked seventeenth in India’s trade with a 2.1 percent share. India’s exports to Japan have barely moved in five years, from US$ 4.43 billion in 2020-21 to US$ 6.04 billion in 2025-26.

Why Indian businesses go there

Margins and validation. A Japanese customer pays a premium for consistent quality and, once you are in, stays for decades. Winning a Japanese account is also the strongest quality signal you can carry into Korea, Taiwan and Southeast Asia. Japan is India’s fifth largest source of FDI with cumulative equity inflows of about US$ 48.14 billion from April 2000 to March 2026, around 1,500 Japanese companies are registered in India with nearly 5,000 business establishments, and more than 100 Indian companies operate in Japan. Japanese outward FDI to India was US$ 3.7 billion in FY 2025-26. The two governments have set a target of 10 trillion yen, about US$ 67 billion, of Japanese investment into India.

The diaspora and business community

Around 59,000 Indians live in Japan, per the MEA bilateral brief as on 30 June 2026. That is small compared with any other market on this list. The composition has shifted towards IT professionals and engineers, alongside a long established community of Gujarati and Maharashtrian jewellery merchants in cities such as Kobe. Practically, this means you cannot rely on a diaspora distribution network the way you can in Dubai or London. You will need a Japanese partner, a Japanese speaking employee, or a distributor, and you should assume most business will be conducted in Japanese.

Sector strengths

India’s primary exports are organic chemicals, vehicles other than railways and trams, nuclear reactor and machinery items, aluminium and articles thereof, and fish and other aquatic invertebrates. Growing areas are IT services, generic pharmaceuticals and API, and speciality chemicals. Japan sells back machinery and nuclear reactor parts, copper and articles thereof, electrical machinery and equipment, inorganic chemicals and iron and steel.

The honest difficulties

Language and process are the first barrier. Contracts, tax filings, labour registrations and most buyer communication are in Japanese, and technical documentation is expected in Japanese. Second, the visa position hardened significantly. From 16 October 2025 the Business Manager residence status requires capital of at least 30 million yen, at least one full-time employee, either three years of management experience or a master’s degree in business management or accounting, and Japanese language ability in either the applicant or the employee. Existing holders have a three year grace period and face stricter renewal checks including tax and social insurance payment. Third, the total corporate tax burden is high once local taxes are added, roughly 31.5 percent in Tokyo for larger companies and around 35.4 percent for smaller ones, and a 4 percent defence surtax on base corporate tax applies for fiscal years beginning on or after 1 April 2026. Fourth, sales cycles are long. Japanese buyers audit, sample, trial and only then commit, and rushing that process is read as unreliability. Fifth, quality tolerance is unforgiving. A defect rate acceptable elsewhere will end the relationship. Sixth, CEPA has been in force since 2011 but India’s export growth under it has been weak, partly because non-tariff standards, certification and distribution access matter more than duty in Japan.

How to apply

Choose the entity. A Kabushiki Kaisha (KK) is the traditional joint stock company and carries more credibility with Japanese customers and banks. A Godo Kaisha (GK) is the simpler limited liability company, cheaper and faster to form.
Appoint a representative director. Japan no longer legally requires a Japan resident representative director, but banks and landlords in practice expect a resident representative or at least a resident contact with an address in Japan.
Decide the capital. There is no statutory minimum, but the Business Manager visa now requires at least 30 million yen of capital, so if a founder needs that visa the capital must be set accordingly.
Have a company seal (inkan or jitsu-in) made and register it, since it is used to execute almost every official document in Japan.
Prepare the Articles of Incorporation. For a KK these must be notarised by a Japanese notary; a GK does not require notarisation.
Deposit the share capital into the bank account of a founder or the representative director and obtain proof of payment, since the company cannot open its own account until it is registered.
File for company registration with the Legal Affairs Bureau (Homukyoku) of the district. Registration usually completes in one to two weeks and the company acquires legal personality on that date.
Obtain the certificate of registered matters (tokibo tohon) and the seal registration certificate, which every counterparty and bank will ask for.
Submit the inward direct investment report to the Bank of Japan on behalf of the Minister of Finance under the Foreign Exchange and Foreign Trade Act. Some sectors require prior notification rather than a post facto report, so check before remitting capital.
File notification of company establishment with the district tax office of the National Tax Agency and with the prefectural and municipal tax offices, and elect blue return status for loss carry forward benefits.
Register for consumption tax with the National Tax Agency if you exceed the threshold or elect to register, and obtain a qualified invoice issuer registration number, which Japanese customers now require to claim input credit.
Register the company with the Japan Pension Service for health insurance and employees' pension, and with the Labour Standards Inspection Office and Hello Work for labour and employment insurance.
Open a corporate bank account, which is often the hardest step for a foreign owned company and normally needs a physical office, a resident representative and a face to face meeting.
Use the JETRO Invest Japan Business Support Center for free temporary office space, consultation with specialists and help with sector approvals, and obtain any product approvals needed such as Pharmaceuticals and Medical Devices Agency approval or Japanese Industrial Standards certification.

What the trade actually looks like

→ India sells

Organic chemicalsNamed first among India's primary exports to Japan in the MEA bilateral brief.
Vehicles other than railway and tramwayIncludes automobiles and components supplied into Japanese supply chains.
Nuclear reactors, boilers and machineryListed by MEA under India's primary export categories, covering general machinery under the HS chapter.
Aluminium and articles thereofA significant metals line in India's basket to Japan.
Fish and other aquatic invertebratesMarine products, particularly shrimp, for the Japanese food market, subject to strict residue and quality standards.
Pharmaceuticals and IT servicesGrowing but still small. Japan's generic substitution policy and regulatory approvals have been the constraint rather than tariffs.

← India buys

Nuclear reactors, boilers and machineryNamed first among India's primary imports from Japan, covering industrial machinery and capital equipment.
Copper and articles thereofA major metals import line from Japan.
Electrical machinery and equipmentIndustrial automation, control systems and electronic components.
Inorganic chemicalsFeedstock and intermediates for Indian manufacturing.
Iron and steelHigh grade steel for Indian automotive and engineering industries.

Treaties and agreements with India

India Japan Comprehensive Economic Partnership Agreement (CEPA) Signed 16 February 2011, in force 1 August 2011

Japan liberalised 92 percent of its tariff lines to zero duty on implementation, while India offered 17.4 percent immediately with a further 66.32 percent phased over ten years. India kept an exclusion list of 12.84 percent of lines against Japan's 8 percent. In practice most Indian goods already face low or zero Japanese duty, so the binding constraint is standards and distribution, not tariffs.

Double Taxation Avoidance Convention Signed 7 March 1989, in force 29 December 1989

Prevents double taxation, caps withholding tax on dividends, interest, royalties and technical service fees, and sets the permanent establishment threshold. Important for Indian IT and engineering firms placing engineers at Japanese client sites, since extended on-site presence can create a Japanese taxable presence at an effective rate above 30 percent.

Japanese investment target for India Announced at the annual summit level and recorded in the MEA brief

A target of 10 trillion yen, about US$ 67 billion, of Japanese investment into India, supported by a human resource exchange plan. For an Indian business this matters mainly as a signal of where Japanese corporate attention will go, and as a reason Japanese trading houses and banks are actively looking for Indian partners.

Which company type to use

Kabushiki Kaisha (KK)	The joint stock company. Higher formation cost because the Articles must be notarised, and it must publish financial statements, but it carries far more credibility with Japanese customers, banks and staff. The usual choice for a serious operating business.
Godo Kaisha (GK)	The Japanese limited liability company, similar to a US LLC. Cheaper and faster to form, no notarisation of Articles, no obligation to publish accounts. Widely used by foreign subsidiaries where the customer is another business rather than a consumer.
Branch office (shiten)	Registered with the Legal Affairs Bureau. Can conduct business and open a bank account, but the Indian parent carries liability and its details are on the Japanese register. Faster to establish than a subsidiary.
Representative office (chuzaiin jimusho)	No registration required for most activities. Can conduct market research, advertising and liaison only. It cannot sell, sign contracts or open a bank account in its own name.
Godo Gaisha with a Japanese partner as a joint venture	Common where market access depends on an established Japanese distributor. Simpler governance than a KK joint venture but harder to exit cleanly, so the operating agreement needs careful drafting.

Visas and tax

Getting yourself there

The Business Manager residence status is the founder route and was tightened with effect from 16 October 2025. It now requires capital of at least 30 million yen, at least one full-time employee, either three years of management experience or a relevant master's degree, and Japanese language ability in the applicant or that employee. Existing holders get three years of grace. Staff use Engineer or Specialist in Humanities status, Intra-company Transferee, or Highly Skilled Professional.

What you will pay

National corporate tax is 23.2 percent for fiscal years beginning on or after 1 April 2026. Once local corporate tax, enterprise tax, special corporate business tax and inhabitants' tax are added, the effective statutory rate is about 31.52 percent in Tokyo for companies with paid-in capital above 100 million yen and about 35.43 percent for smaller companies. A special corporation tax for defence, calculated at 4 percent of base corporate tax after a 5 million yen deduction, applies for fiscal years beginning on or after 1 April 2026 and adds roughly 0.93 percent. Consumption tax is 10 percent. A Double Taxation Avoidance Convention with India exists, signed on 7 March 1989 and in force from 29 December 1989.

Indian government support for this market

Basic Chemicals, Cosmetics and Dyes Export Promotion Council (CHEMEXCIL)

The Department of Commerce council covering organic chemicals, India's single largest export line to Japan. It helps members with Japanese chemical regulatory requirements under the Chemical Substances Control Law, arranges buyer meets at Japanese chemical exhibitions, and takes up standards and registration barriers through official channels.

Marine Products Export Development Authority (MPEDA)

A statutory body under the Department of Commerce. Japan is a demanding buyer of Indian shrimp and other marine products, with residue and quality standards among the strictest anywhere. MPEDA registers exporters, approves processing plants, runs the residue monitoring programme Japanese importers rely on, and funds cold chain and traceability upgrades.

Federation of Indian Export Organisations (FIEO)

The apex export body under the Department of Commerce. It issues Registration cum Membership Certificates, organises Japan focused delegations and buyer seller meets, and coordinates with the Embassy of India in Tokyo. Given how relationship driven Japanese procurement is, a government backed introduction carries real weight.

Market Access Initiative (MAI) Scheme, Department of Commerce

A central scheme that reimburses part of the cost of participating in international trade fairs, market studies, product registration and testing charges abroad, and setting up warehouses and showrooms. It is how most Indian MSMEs fund the repeated Japanese trade fair presence and product testing that Japanese buyers expect before placing a first order.

Frequently asked questions

What is the minimum capital required to start a business in Japan?

There is no statutory minimum, but the Business Manager visa requires at least 30 million yen of capital. If a founder needs that visa, capital must meet this requirement.

Do I need a Japan resident representative director?

Japan no longer legally requires it, but banks and landlords in practice expect a resident representative or at least a resident contact with a Japan address.

What is a Kabushiki Kaisha versus Godo Kaisha?

KK is the traditional joint stock company carrying more credibility with Japanese customers and banks. GK is a simpler limited liability company that is cheaper and faster to form.

How long does company registration take in Japan?

Registration with the Legal Affairs Bureau usually completes in one to two weeks. The company acquires legal personality on the registration date.

What documents do I need for company registration in Japan?

You need Articles of Incorporation (notarised for KK), proof of capital deposit, company seal registration, and inward direct investment report to Bank of Japan under the Foreign Exchange Act.

What is the corporate tax rate in Japan?

Total corporate tax burden is roughly 31.5 percent in Tokyo for larger companies and around 35.4 percent for smaller ones. A 4 percent defence surtax on base corporate tax applies from 1 April 2026.

Before you apply: confirm every date, fee and eligibility rule on the official website linked on this page. Public and Policy is an independent portal, not a government body, and details change without notice.