Japan is becoming a more welcoming place for foreign entrepreneurs, thanks to government-backed programs and simplified startup procedures. Cities like Tokyo, Osaka, and Fukuoka are actively building ecosystems that support expats looking to start a business in Japan—from startup visa programs to funding accelerators. According to recent Japan entrepreneurship stats from JETRO and METI, there’s been a steady rise in foreign-owned businesses since 2020, especially in tech and services. With global founders tapping into niche markets and regional demand, Japan’s startup scene is becoming one of Asia’s most promising for international talent.
Why Japan? Business Climate in 2025
Japan remains one of the most stable economies in the world, with strong consumer trust, a reliable infrastructure, and consistent demand across industries. For entrepreneurs, especially foreigners, it offers a unique mix of challenges and untapped potential. One of the biggest opportunities in 2025 is Japan’s aging population. As more citizens retire, gaps continue to open in healthcare, elder care, logistics, and consumer tech—sectors where innovation is urgently needed.
To attract international talent, the Ministry of Economy, Trade and Industry (METI) and local governments have rolled out targeted Foreign Direct Investment (FDI) incentives. These include subsidies, grants, and low-interest financing for foreign founders in priority industries.
Recent reforms have also made it easier to start a business in Japan. Processes for incorporating a company, acquiring a business manager visa, and securing a legal address have become more streamlined—particularly in startup-friendly zones like Fukuoka and Tokyo. With dedicated one-stop business centers and English-language support expanding, Japan’s business climate in 2025 is more accessible than ever for global entrepreneurs.
Startup Visa Overview (2025 Update)
Japan’s Startup Visa offers foreign entrepreneurs a pathway to stay and prepare a business before needing the full Business Manager Visa. Eligible individuals must submit a solid business plan and receive local government endorsement. The initial visa lasts up to six months, with options to renew for an additional six months—totaling one year in most municipalities.
2025 Updates: As of January 2025, the program expanded nationwide, extending stays to two years and reducing administrative burdens. This is part of METI’s effort to simplify procedures for global founders.
City Comparisons:
- Tokyo (incl. Shibuya): Part of the National Strategic Special Zone; structured application with broad industry focus; good English-language support.
- Fukuoka: Offers a fast-track startup route—receive a six-month startup residency and support via city-run Global Business Support; monthly check-ins and co-working office access included.
- Osaka: Launched its program in 2019; provides one-year preparation period with official support desk and mentoring.
Common Challenges: Entrepreneurs often struggle to secure sponsorship from municipalities, demonstrate sufficient funds (typically ¥5 million or office hire), and arrange housing. While the Startup Visa eases capital/employee thresholds initially, transitioning to a full Business Manager Visa still needs proof of compliance.
Optionally, anecdotal surveys show a surge in Startup Visa applications following the 2025 reforms—a promising sign in Japan entrepreneurship stats, albeit full numbers are awaited.
Types of Business Entities Foreigners Can Register
When choosing how to start a business in Japan, foreign entrepreneurs typically select between a Kabushiki Kaisha (KK) or a Godo Kaisha (GK). A KK is most comparable to a corporation, offering strong credibility with banks, clients, and investors—though it comes with higher administrative requirements. A GK, on the other hand, is more like a limited liability company (LLC), easier to manage and popular among solo founders or small teams.
Alternatively, some international companies establish a Branch Office (with full business operations) or a Representative Office (limited to research or liaison activities, not revenue-generating).
2025 Update: Legally, the minimum capital requirement for KK or GK remains just ¥1, but in practice, most founders invest ¥500,000–¥5 million to demonstrate business credibility—especially when applying for a Business Manager Visa.
Every company must also list a registered office address. For foreign founders, shared offices and coworking spaces like WeWork or Regus Japan are popular, cost-effective solutions that meet this legal requirement while offering local presence.
Understanding the right entity type is one of the most important decisions when planning to start a business in Japan.
Success Rates & Industry Breakdown
Foreign entrepreneurs in Japan have found success across a range of industries, including:
- Tech: software development, artificial intelligence, SaaS
- Tourism: boutique travel agencies and guide services
- Food & Beverage: cafés, specialty imports, health-focused eats
- Education: language schools and emerging edtech solutions
- Import/export: leveraging Japan’s demand for foreign goods
Industry data from METI shows that in fiscal 2019, 82.6% of foreign-affiliated companies operated in non-manufacturing sectors—information, communications, wholesale, and services are dominant. Within these, IT/data services accounted for roughly 30.9%, and general trade firms made up about 37.9%.
Regarding survival rates, while specific 5-year figures for foreigners aren’t separately published, METI data indicates stability trends on par with domestic firms. The non-manufacturing sector—home to most foreign entrepreneurs—has shown sustained operating presence over 5 years.
These findings align with broader Japan entrepreneurship stats: foreign-led startups in tech, tourism, F&B, and education showcase resilience and steady growth. With Japan’s domestic market large and demanding, niche innovations in these fields are gaining traction and long-term presence.
Gender & Nationality Demographics of Foreign Entrepreneurs
Foreign-led businesses in Japan are becoming more diverse, both in terms of gender and country of origin. While overall entrepreneur demographics still skew male, notable progress is underway:
- Women-run ventures: A Ministry survey found that 34.2% of Japanese entrepreneurs were women, though only 14.2% of CEOs were female. Initiatives like Startup Lady Japan, which supports over 1,000 entrepreneurs from more than 50 countries, are helping address this imbalance.
- Nationalities leading the charge: The most common foreign founders come from the U.S., China, Korea, India, and France, drawn by Japan’s strong market and supportive visa programs (JETRO data).
- Support for minority entrepreneurs: Organizations such as the Tokyo Women Entrepreneurs Center and Startup Lady Japan provide specialized workshops, mentorship, and networking to uplift women and underrepresented founders.
These demographic shifts mirror broader Japanese efforts to foster inclusion: from government “womenomics” policies to private accelerators focused on gender and cultural diversity.
Legal & Tax Considerations
To start a business in Japan, it’s essential to understand the legal and tax framework that governs company formation and operation. Employment laws require written contracts for all staff, outlining salary, hours, and duties. Employers must also comply with Japan’s labor standards regarding paid leave, health insurance, and pension contributions.
Corporate tax sits at an effective rate of 23.2%, but additional local taxes may apply depending on location and business scale. Protecting your brand is also critical—Japan operates a “first-to-file” system for trademarks, so registering your intellectual property early with the Japan Patent Office is strongly advised.
Setting up a company involves four main steps:
- Secure a physical or virtual office address
- Draft and notarize Articles of Incorporation
- Register with the Legal Affairs Bureau
- Complete tax registration at your local tax office
For foreign founders, using bilingual legal and accounting firms can greatly simplify this process. Many of these firms also offer guidance on visa compliance, company structuring, and ongoing tax obligations—crucial elements for anyone planning to start a business in Japan legally and successfully.
Helpful Resources and Communities to Start a Business in Japan
There’s a growing support system for foreigners starting a business in Japan, ranging from government programs to community-led initiatives.
JETRO’s “Invest Japan” program offers free consultation, legal guidance, and office space for early-stage entrants. Meanwhile, SMRJ (Organization for Small & Medium Enterprises and Regional Innovation) provides mentoring and funding support for foreign-owned SMEs across the country.
On the community side, groups like Startup Lady Japan, Venture Café Tokyo, and Founder Institute Japan host regular events, pitch nights, and founder meetups. For tech-focused entrepreneurs, Tokyo Dev is a trusted platform offering startup stories, hiring guides, and visa advice tailored to foreign developers.
Together, these networks offer practical tools and human connections that can help turn ideas into sustainable businesses.
Start a business in Japan: Final Tips for Success
While Japan welcomes innovation, cultural understanding remains essential for anyone hoping to start a business in Japan. Language is a major factor—many government forms, contracts, and negotiations are conducted in Japanese. Even with English support in major cities, learning key business terms or hiring a bilingual liaison can make a big difference.
Expect bureaucracy. Japanese administrative systems are known for their precision and paperwork, so patience and preparation are critical. Keeping organized records and understanding submission timelines will help avoid delays.
Above all, trust matters. Japanese business culture places high value on long-term relationships, reliability, and mutual respect. Building genuine connections with local partners, mentors, or even neighboring businesses can open doors that marketing alone won’t.
Entrepreneurs who respect both the legal and cultural landscape will have the best chance at long-term success—and turn their decision to start a business in Japan into a sustainable venture.
