Joint Ventures

Joint ventures are another way for foreign companies or individuals to expand their business operations in Japan and enter the Japanese market. Although there are four types of corporate entities available when establishing a subsidiary, Kabushiki Kaisha (KK, Joint Stock Company) and Godo Kaisha (GK, Limited Liability Company) are the most suitable ones for small and medium enterprises. The main reason is that both the KK and the GK are limited companies, so foreign investors cannot be held personally responsible for the subsidiary’s debts. The other two forms of subsidiary companies are Gomei-Kaisha and Goshi-Kaisha. However, being unlimited partnerships, they are rarely chosen.

Japan Law, Types of Business Organisations Recognised in Japan
Juridique, Yoko Majima, Incorporation, Setting Up an Office/Business in Japan
JETRO, Incorporating Your Business, Types of Operation in Japan

Since 2006, a series of legislative reforms in the new Company Law have made joint ventures more easily accessible to foreign investors thanks to the lowering of the minimum initial capital requirements and the introduction of one-person companies. It is now possible to set up a KK or a GK with an initial capital of 1 yen. Nevertheless, to manage and operate a business in Japan, a foreign investor will need to obtain a working visa which requires a minimum initial investment of 5 million yen. Another change under the new Company Law is that the Yugen Kaisha (YK, Limited Liability Company) has been abolished. While existing YK can remain as they are or change into KK, no new Yugen Kaisha can be established.

RIETI, Traditional Approaches to Legal Reforms: The New Company Law, 2006 (p 20)

Table of Contents

  • Kabushiki Kaisha and Godo Kaisha
    • General Information
    • Pros and Cons of Kabushiki Kaisha and Godo Kaisha
    • Main Differences Between Kabushiki Kaisha and Godo Kaisha
    • Setting Up a New Business
      • Incorporation Process
      • Business Licenses and Permissions
      • Work Visas
  • International Joint Ventures
    • Main Factors Contributing to the Success of International Joint Ventures
      • Case Study: Display Technologies Inc.
    • Main Factors Contributing to the Failure of International Joint Ventures
      • Case Study: AirAsia Japan
  • Expert Report
  • Annual Report
  • Further Reading
  • Relevant Organisations and Trade Fairs