The out-of-pocket cost of setting up a company is about ¥200,000 and up for a stock company, and about ¥60,000 and up for an LLC. The difference comes from "whether articles-of-incorporation notarization is required" and "the minimum registration license tax." This article organizes, with sources, the breakdown of setup costs, a comparison of stock companies and LLCs, three ways to cut costs, and the money you pay after setup. Consider it together with the timing of incorporation.
① Stock company: articles-of-incorporation notarization (¥15,000–¥50,000) + registration license tax (capital × 0.7%, minimum ¥150,000), which comes to about ¥170,000–¥200,000 with electronic articles of incorporation[NTA No.7191].
② LLC: articles-of-incorporation notarization is not required, so only the registration license tax (minimum ¥60,000). With electronic articles of incorporation, about ¥60,000.
③ How to cut costs: electronic articles of incorporation (the ¥40,000 stamp fee becomes ¥0) / if capital is under ¥1 million, the notarization fee is ¥15,000 / with certification as a specified startup-support business, the registration license tax is halved (stock company ¥75,000, LLC ¥30,000).
④ After setup, the per-capita portion of corporate residence tax (minimum about ¥70,000 a year) applies even in the red. Enrollment in social insurance (health insurance and employees' pension) is also mandatory even for a one-person company.
Breakdown of setup costs (stock company vs LLC)
| Cost item | Stock company | LLC |
|---|---|---|
| Articles-of-incorporation notarization fee (notary) | Capital under ¥1 million: ¥15,000 and up / under ¥3 million: ¥25,000 and up / above that: ¥50,000[Japan National Notaries Association] | Not required (¥0) |
| Stamp fee for the articles of incorporation (paper version) | ¥40,000 (¥0 with electronic articles of incorporation) | ¥40,000 (¥0 with electronic articles of incorporation) |
| Registration license tax | Capital × 0.7% (minimum ¥150,000)[NTA] | Capital × 0.7% (minimum ¥60,000)[NTA] |
| Other (actual costs) | Roughly ¥several thousand to ¥10,000 for creating the company seal, seal registration certificates, certificates of registered matters, etc. | |
| Minimum total (electronic articles of incorporation) | About ¥170,000 and up | About ¥60,000 and up |
Stock company or LLC — which should you choose?
An LLC suits you if
- You want to keep setup costs down (about ¥60,000 and up) and your aim is tax saving or asset management
- You value practical benefit over external credibility (a micro corporation also mostly takes this form)
- You want to avoid the burden of running one: no financial-results public notice required, and no term limits for officers
A stock company suits you if
- You value credibility and brand with clients and in recruiting
- You are considering outside investment or raising funds through shares in the future
- You are in an industry or supply chain where the title "Representative Director" is needed
The tax treatment (corporate tax, consumption tax, and the mechanism of officer compensation) is the same for both. You can also later convert an LLC into a stock company (a separate registration license tax, etc., applies).
Three ways to cut costs
- ① Use electronic articles of incorporation: The ¥40,000 revenue stamp affixed to paper articles of incorporation becomes unnecessary. Because doing it yourself requires an electronic-signature setup, using an incorporation-support service or a professional is the realistic approach.
- ② Keep capital under ¥1 million (stock company): The notary's notarization fee drops to ¥15,000[Japan National Notaries Association]. * Capital also affects credibility and license/permit requirements, so don't decide on cheapness alone.
- ③ Obtain certification as a specified startup-support business: If you take a municipality's startup seminar, etc., and obtain the certificate, the registration license tax is halved (stock company ¥75,000, LLC ¥30,000). Check with the startup-support desk of your local government.
Money you pay after setup (don't overlook this)
- Per-capita portion of corporate residence tax: minimum about ¥70,000 a year (applies even in the red).
- Social insurance (health insurance and employees' pension): mandatory even for a one-person company. Premiums (the company's share plus your own share) apply according to your officer compensation.
- Tax accountant fees and accounting software: A corporation's filing is more complex than an individual's; the going rate for a tax accountant is about ¥200,000–¥400,000 a year.
- Notifications after setup: the tax office (there are deadlines, such as the establishment notification and the application for approval of blue-return filing within three months of establishment), the prefecture and municipality, and the pension office.
If you incorporate looking only at the "¥60,000 setup cost," the per-capita levy, social insurance, and filing costs can become an unexpected burden. The way to think about the break-even point is explained in detail in the timing of incorporation. For the option of starting as an individual, see the guide to starting as a sole proprietor.
FAQ
What is the minimum cost to set up a company?
Using electronic articles of incorporation, an LLC comes to around ¥60,000 (registration license tax ¥60,000 + actual costs), and a stock company to about ¥170,000 and up (articles-of-incorporation notarization ¥15,000 and up + registration license tax ¥150,000). With paper articles of incorporation, the ¥40,000 stamp fee is added.
Can I set up a company with capital of ¥1?
It is legally possible. However, the minimum registration license tax (stock company ¥150,000, LLC ¥60,000) applies, so it does not get cheaper, and you are at a disadvantage in terms of opening a bank account and credibility for loans and transactions. It is common to put in a realistic amount, using your near-term working capital as a guide.
What are the downsides of an LLC?
It may rank below a stock company in name recognition and credibility, it cannot raise funds through shares, and the representative's title becomes "Representative Member." For small corporations aimed at tax saving or asset management, there is little practical hindrance, and you can later convert it into a stock company.
What costs arise every year after setup?
Even in the red, the per-capita portion of corporate residence tax costs a minimum of about ¥70,000 a year. In addition, if you pay officer compensation, budget for social insurance premiums (including the company's share) and for tax accountant fees and accounting software for filing.
Data sources
- Registration license tax (stock company 0.7%, minimum ¥150,000 / LLC minimum ¥60,000): NTA No.7191 Registration license tax rate table (in Japanese)
- Articles-of-incorporation notarization fee (¥15,000 for capital under ¥1 million, etc.): Japan National Notaries Association — Articles-of-incorporation notarization (in Japanese)
* The content of specified startup-support businesses and the requirements for certification differ by municipality. This article is general information; for individual procedures, please confirm with the Legal Affairs Bureau, the notary's office, or a professional.