Model case:

3-person office (of which 1 is an expatriate)

 One of the conditions to obtain an investment/management visa states that a company employ two or more Japanese nationals. Thus, the personnel make-up of the company in this model case is three people: two Japanese and one expatriate. Indeed, this is typical for an overseas company's initial entry into Japan.

Basic premises of the model case

 Having spent three months based at Japan Business Center preparing to open for business, the overseas company establishes either a "Kabushiki Kaisha" or a branch.

 The company rents a 50m2 office in Makuhari New City business district. The company buys office machinery and equipment, No decoration, renovation, or other construction work on the office is included in our calculation. One of the Japanese employees is manager-level, and is hired through a recruiting agency, while the other is a clerical worker employed directly though a job opening advertisement in the newspaper.

 The expatriate relocates to Japan alone, and stays in an extended stay hotel in Makuhari until s/he secures a place to live. The expatriate rents a 75m2 apartment in a residential area of Makuhari.
 The company generally engages a professional to carry out various procedures on its behalf related to the establishment of the company, tax, and other matters.

 The figures shown on the following list are in US$ at the exchange rate of 1JY/80 to US$/1.00(fractions are rounded out to the nearest whole number).

 Kabushiki KaishaBranch
Rent on temporary offices*1 2,7502,750
Deposits payable on temporary offices*1 10,75010,750
Long-term hotel stay*2 7,5007,500
Subtotal 21,00021,000
Obtaining visas
Certificate of eligibility*3 1,8751,875
Visa application*4 7575
Re-entry permit*3 312312
Subtotal 2,2622,262
Company establishment and tax notices
Expenses payable when registering a company*5 3,4751,262
Paid-up capital*6 (125,000)0
Having a name seal made*7 625625
Company registration and notices*3 3,1252,500
Tax notices*3 562562
Social insurance notices*3 1,6251,625
Personnel matters
Hiring a manager*8 39,37539,375
Hiring clerical staff*9 1,2501,250
Subtotal 40,62540,625
Setting up an office
Rent (monthly)*10 2,0002,000
Security deposits*11 20,00020,000
Broker's fees*12 2,0002,000
Buying office machinery and equipment*13 21,50021,500
Fire and damage insurance*14 500500
Subtotal 46,00046,000
Setting up a residence
Rent (monthly)*15 1,8751,875
Security deposits*16 9,3759,375
Broker's fees*17 1,8751,875
Subtotal 13,12513,125

*1 Assumes the company uses Japan Business Center in Makuhari New City. Separate communication charges apply.
*2 Assumes 60-night stay in a standard-class hotel in Makuhari.
*3 Assumes using administrative scrivener, accountant, legal offices, etc.
*4 Actual expense for two general entry visas.
*5 Actual expense for registration and licence tax, actual fee, and actual expense for obtaining an official copy, etc.
*6 The model case does not include paid-in capital, as paid-in capital amounts vary by business type. Therefore, the total initial cost for setting up business in Japan will be the above total plus the paid-in capital. The minimum requirement for paid-in capital was abolished under Japan's new Corporate Law (it was formerly JPY10 million), therefore new entrants are free to set the paid-in capital amount themselves. They must, however, take into consideration when setting up business in Japan various requirements (set forth in relevant rules and regulations), such as those in relation to visa eligibility and dividend distribution.
*7 Assumes company and personal seals are made.
*8 Assumes commission of 30% of annual income of ¥10 million (incl. consumption tax).
*9 Assumes recruitment advertisement placed in English-language newspaper.
*10 Assumes office building in Makuhari New Town (incl. common services fee).
*11 Assumes deposit of ten months' rent.
*12 Assumes commission of one month's rent.
*13 Assumes OA equipment, desks, chairs, etc., for three people were purchased.
*14 Assumes advance payment of insurance premiums for one year's coverage of general non-life insurance.
*15 Incl. administration fee.
*16 Assumes deposit of five months' rent.
*17 Assumes commission of one month's rent.