Stock Company (KK) or LLC (GK) in Japan? Sort the Pros and Cons

Who makes the decision in your company?

A quick review as to what KK and GK are:

  • Kabushiki Kaisha (KK) — Stock Company
  • Godo Kaisha (GK) — Limited Liability Corporation without stock
  • ¥50,000 to the Notary Office
  • ¥40,000 for the revenue stamp
  • ¥150,000 to the Legal Affairs Bureau
  • additional documentation fees
  • investors prefer to invest in KK because they can invest based on the share purchase agreement.
  • to change GK to KK, it takes at least 1.5 months in order to list the change of entity on an official gazette and to register it at Legal Affairs Bureau.
  • the decision-making power in the company is based on share distribution among the shareholders, and it’s much easier to visualize the decision-making structure in a KK.

Can we trust the members around us?

If I co-found a GK with some of my friends, and if all of us invest at least ¥1 to launch the GK, basically all of us will have equal decision making power.

Side notes

  1. According to several “immigration specialists”, the Business Manager visa acceptance rate does not change based on whether the business is set up as a GK or KK.
  2. The one paying the initial capital during incorporation can be a company. If you have a company outside of Japan and if you appoint the company to pay the initial capital on your behalf and launch a GK in Japan, the decision making power of the GK will follow the structure of the company in abroad.
  3. As far as I know, most investors prefer to use A-type stocks for seed-round funding. In other words, KKs are the only entity that can accept the investment.
  4. The tax system works exactly the same for GK and KK. No tax benefit for LLC like in the US. All GK and KK owners need to pay at least ¥70,000 Corporate Residence Tax (法人住民税), regardless of whether or not they make profit.

Learn More About Setting Up a KK or GK Business in Japan

Startup Work Inc. based in Tokyo, leads in supporting Shibuya’s Startup Visa. With bilingual support staff and extensive, practical experience working with startups, Startup Work Inc. provides a leading source for supporting individuals and startup businesses in Japan.

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