How to Start Your Own Business in Kansai

Feb 24, 2023

How to Start Your Own Business in Kansai

Self-employment is a fantastic way of earning money while at the same time engaging in a pursuit you like and being your own boss. Japan welcomes entrepreneurs and those wanting to benefit the national economy by setting up their enterprises, and the Kansai region offers excellent money-making opportunities. In fact, Osaka has been identified as one of the country’s startup hotspots for 2023. Here are a few tips on how to go about starting up your own business in Kansai.

Research the market

Before you do anything else, you’ll need to have a good idea. This means researching the market, finding out what’s doing well and what gaps for new opportunities might be. Kansai is one of Japan’s tech hotspots, and the region has a gross regional product (GRP) of just over US$800 billion. Osaka, which will host the World Expo in 2025, thrives in areas such as biotechnology and manufacturing. Kyoto is a hub for electronics and healthcare. Kobe does great in energy and engineering. Find out what opportunities align with your skills and where might be the best location to set up.

Sort out your visa requirements

This may not be an issue if you already live in Japan. However, if you are in the country on a temporary visa, you will need to check the visa conditions as you may need to change to a business-related visa. The three main business visas for Japan are:

• Business manager visa – 4-month visa to either manage an existing business or set up a new business. It can be extended to one year once the company is established.
• Startup visa – 1-year visa for entrepreneurs available in certain cities/prefectures, including Osaka, Kyoto, Kobe, and Mie.
• Investor visa – for one, three, or five years if you have money to invest in a Japanese business

To get any of these visas, you must submit a good business plan to the Japanese authorities. This may include demonstrating that you have the necessary skills, experience, or qualifications to make the business succeed.

Choose a business structure

The legal structure you choose is important as it determines how you administrate your business, for example, taxes paid, reporting requirements, and setting up processes. The main business types in Japan are:

• Corporation (Kabushiki Kaisha) – a limited business that exists as a separate legal entity, has tradable stock/shares, and pays business tax. Business owners are employed as directors, and personal liability is limited to what you invest in the business.
• Limited Liability Company (Goudou Kaisha) – a more straightforward form of company that’s easier to set up. It exists as a separate legal entity, with owner liability limited, but it doesn’t have shares.
• Partnership (Gomei Kaisha) – an unlimited company with two or more owners who split profits as personal income and are personally liable for any business debts.
• Sole trader (Kojin Jigyo) – similar to a partnership but with a sole business owner

Other considerations

Other things you will need to consider if setting up a business in Kansai are:

• Business address – unless you are running your business from home, you’ll need commercial space for an official business address.
• Business bank account – a legal requirement for incorporated businesses but also a good idea for sole traders and freelancers to help keep track of finances.
• Articles of incorporation – you’ll need notarized copies of these if you’re a corporation. This also involves registering your business name. All of which come at a cost.
• Funding requirements – the estimated requirement for setting up a business in Japan is around 5 million yen. You’ll need to prove you have this to get an Investor visa.
• Registering your business – once you have all the necessary documents, you’ll have to register your details at the business registry office (homukyoku).
• Registering for tax and social security payments with the relevant authorities.
• Employees – if you take them on, you’ll have to follow Japanese labor laws and take responsibility for staff tax/social security payments.
• Marketing your business – once the formalities are sorted, it’s time to promote your products and services to bring in revenue.

Useful resources

SUGEE Kansai – business and startup support
METI-Kansai – startup portal for entrepreneurs
Osaka Innovation Hub
Osaka Business and Investment Center
Kyoto Research Park
Kyoto Chamber of Commerce
Kobe Startup Ecosystem

DXR, CC BY-SA 4.0, via Wikimedia Commons