Kabushiki Kaisha vs. Godo Kaisha: Which Company Structure Should Entrepreneurs in Japan Choose? (2025 Update)

When starting a business in Japan, the first difficult decision is often not what kind of business to run, but rather: what kind of company to set up.

Should you choose a Kabushiki Kaisha (株式会社, KK) or a Godo Kaisha (合同会社, GK)? Most people have heard both terms, but many do not fully understand how they differ or which one is more advantageous in practice.

In this guide, I will break down the two structures from every major angle: incorporation costs, procedures, taxation, visa implications, and day-to-day operations. By the end, you should be able to choose the one that fits your situation.

For the full process of setting up a company in Japan, see our complete company setup guide. This article focuses specifically on choosing the right company structure.

What Company Structures Exist in Japan?

Japan’s Companies Act (会社法) provides for four types of companies:

Kabushiki Kaisha (株式会社, KK): similar to a stock corporation
Godo Kaisha (合同会社, GK): similar to a U.S.-style LLC
Gomei Kaisha (合名会社): all members have unlimited liability
Goshi Kaisha (合資会社): some members have unlimited liability and some have limited liability

Realistically, you can ignore Gomei Kaisha and Goshi Kaisha. Why? Because they require at least some investors to assume unlimited joint liability, meaning that if the company runs into trouble, your personal assets may be used to pay company debts. That is too risky for most founders, so these two forms are now rarely used.

Among newly incorporated companies in Japan, Kabushiki Kaisha and Godo Kaisha together account for well over 99%. In practice, your decision is almost always between those two.

It is also worth noting that the Godo Kaisha was only introduced after the new Companies Act took effect in 2006. It is relatively new, but it has grown rapidly. In recent years, Godo Kaisha registrations have made up more than 30% of newly established companies, and the number is still rising. Apple Japan, Amazon Japan, and Google Japan all operate in Japan as Godo Kaisha entities.

Kabushiki Kaisha vs. Godo Kaisha: Key Differences at a Glance

Here is the big-picture comparison first, then we will go through each point in detail.

Comparison Item	Kabushiki Kaisha	Godo Kaisha
Statutory incorporation cost	About ¥200,000-¥250,000	About ¥60,000-¥100,000
Time to incorporate	2-3 weeks	1-2 weeks
Articles notarization	Required	Not required
Highest decision-making body	Shareholders’ meeting	Members’ meeting
Representative title	Representative Director (代表取締役)	Representative Member (代表社員)
Operational flexibility	More constrained by company law	Very flexible, with broad freedom in the articles
External credibility	High	Moderate, but improving
Profit distribution	Based on capital/shareholding ratio	Can be agreed freely
Financial statement publication	Required	Not required
Transfer of ownership interests	Possible, subject to restrictions	Requires unanimous consent of all members
Can go public?	Yes	No

Incorporation Cost Difference Is Significant

This is the biggest reason many people choose a Godo Kaisha: it can save more than ¥100,000. I will show the exact numbers in the next section.

Incorporation Procedure: Godo Kaisha Is Simpler

A Kabushiki Kaisha requires notarization of the articles of incorporation (定款 / ていかん) by a notary public. That means booking an appointment with a notary office, preparing the paperwork, and often spending up to a week just on this step. A Godo Kaisha does not require notarization, so you can file directly with the Legal Affairs Bureau.

Management Flexibility: Godo Kaisha Clearly Wins

A Godo Kaisha gives you far more freedom in the articles of incorporation. How profits are allocated, who makes decisions, and how management authority is structured can largely be agreed among the members and written into the articles.

A Kabushiki Kaisha, by contrast, has a more formal governance framework: directors’ terms, shareholders’ meetings, and procedural requirements for various resolutions. A small KK can simplify some of this, but it is still more structured than a GK.

External Credibility: Kabushiki Kaisha Has the Edge

In Japan, the words “Kabushiki Kaisha” still carry a built-in sense of legitimacy. Recognition of Godo Kaisha is improving, but some Japanese companies, especially in traditional industries or larger corporations, still view GKs with a degree of hesitation.

If your business mainly serves Japanese corporate clients (B2B), this factor deserves serious attention. If you run a consumer-facing business (B2C), an IT service, or cross-border e-commerce operation, most customers will not care what type of entity you use.

Profit Distribution

In a Kabushiki Kaisha, profits are distributed strictly according to shareholding ratio. If you invested 60% of the capital, you receive 60% of the dividends.

In a Godo Kaisha, profit allocation can be freely defined in the articles. For example, Member A may contribute 80% of the funds but receive 50% of the profits, while Member B contributes 20% of the funds but receives 50% because they provide the core technology. That arrangement is not possible in a KK, but it is fully lawful in a GK.

Publication of Financial Results

A Kabushiki Kaisha must publish an official financial announcement (決算公告 / けっさんこうこく) each year. The most common method is publication in the Official Gazette (官報), which costs roughly ¥60,000 per year.

A Godo Kaisha has no such obligation. ¥60,000 a year is not huge, but over several years it becomes a recurring compliance cost.

Detailed Comparison of Incorporation Costs

This is the part most people care about, so here is the breakdown in table form.

Cost Item	Kabushiki Kaisha	Godo Kaisha
Articles notarization fee	¥30,000-¥50,000 ※	Not required
Stamp tax on articles	¥40,000 (waived for electronic articles)	¥40,000 (waived for electronic articles)
Registration tax	¥150,000 (or 0.7% of stated capital, whichever is higher)	¥60,000 (or 0.7% of stated capital, whichever is higher)
Company seal	¥5,000-¥15,000	¥5,000-¥15,000
Registry certificate copies, etc.	¥2,000-¥3,000	¥2,000-¥3,000
Total statutory cost	About ¥202,000-¥248,000	About ¥67,000-¥118,000

※ Since 2022, the notarization fee for articles has been charged on a sliding scale based on capital: ¥30,000 for capital of up to ¥1 million, ¥40,000 for ¥1 million to ¥3 million, and ¥50,000 for over ¥3 million.

Difference: roughly ¥100,000-¥150,000.

Some additional notes:

Electronic articles: If you prepare the articles electronically, the ¥40,000 stamp tax can be waived. Most judicial scrivener offices now offer this service, and it is usually the better option.
Judicial scrivener fees: If you hire a judicial scrivener to handle the incorporation, fees are typically around ¥80,000-¥150,000 for a KK and ¥50,000-¥100,000 for a GK.
Capital: Capital itself is not an “expense.” It is operating money you inject into the company and must be prepared separately. If you are applying for a Business Manager Visa, capital generally needs to be at least ¥5 million.

Using the cheapest possible approach, a Godo Kaisha with electronic articles and self-filing can be incorporated for as little as about ¥60,000 in statutory costs. A Kabushiki Kaisha will still usually cost around ¥200,000 at minimum.

Does the Company Type Affect a Business Manager Visa Application?

This is one of the biggest concerns for Chinese-speaking entrepreneurs in Japan, so here is the direct answer:

Japan’s Immigration Services Agency treats Kabushiki Kaisha and Godo Kaisha equally. There is no rule that says a KK is easier for obtaining a visa.

What Immigration Actually Reviews

The main review points for a Business Manager Visa (経営・管理ビザ) are:

Whether the business is real and sustainable
Whether there is an appropriate business premises (office)
Whether the capital or total investment meets the required standard
Whether you will genuinely engage in business management activities

None of those factors depends on the company form. Whether you establish a KK or a GK, the review standard is the same.

For a detailed breakdown of the requirements, see full eligibility requirements for the Business Manager Visa.

What We See in Practice

Based on many real cases, there is no meaningful approval-rate difference between KKs and GKs for Business Manager Visa applications. Immigration officers care about whether your business plan (事業計画書) is credible, whether your financial projections are reasonable, and whether your intent to run the business is genuine. The company type itself is not the deciding factor.

For help preparing the business plan, see our business plan writing guide.

Capital Requirement

Whether you choose a KK or a GK, the capital requirement for a Business Manager Visa is the same:

Traditional standard: at least ¥5 million in capital
Alternative standard: employ at least two full-time employees

In practice, most applicants rely on the capital route. One important point is that from October 2025, the new standard increased the minimum capital requirement to ¥30 million (previously ¥5 million), and the funds must be genuinely in place. Immigration will verify the source of funds. For the latest requirements, refer to this detailed requirements guide.

For a full explanation of visa-related costs, see Business Manager Visa costs explained.

Is There Any Difference in Tax Treatment?

Almost none. This is a common misunderstanding and worth addressing directly.

Corporate Tax: Exactly the Same

Japan’s corporate tax (法人税 / ほうじんぜい) is based on company profits, not company type. Whether you use a KK or a GK:

The portion of annual profit up to ¥8 million: 15% (reduced rate for small and medium-sized corporations)
The portion above ¥8 million: 23.2%

Once local corporate inhabitant tax and enterprise tax are added, the effective overall burden is usually about 22%-36%, depending on profit levels. The two company types are treated exactly the same. See our tax basics guide for more detail.

Consumption Tax: Exactly the Same

The rules for consumption tax (消費税 / しょうひぜい) also do not depend on company type. In principle, a newly established corporation with capital below ¥10 million may be exempt from consumption tax for its first two fiscal years, although the invoice system introduced in October 2023 created important exceptions.

Per Capita Corporate Inhabitant Tax: Also the Same

Even if the company earns no profit at all, there is still a fixed annual per capita corporate inhabitant tax (均等割 / きんとうわり), which starts at around ¥70,000 per year in Tokyo. This applies equally to both KKs and GKs.

The Only Real Difference: Financial Announcement Obligation

As noted above, a Kabushiki Kaisha must publish its financial results, usually at a cost of around ¥60,000 per year in the Official Gazette. A Godo Kaisha does not. Strictly speaking, that is not a tax difference, but it is a recurring compliance cost.

Bottom line: from a tax perspective, choosing a KK or a GK does not meaningfully change your tax burden. For a fuller overview of startup taxes in Japan, see our Japan business tax guide.

When Should You Choose a Kabushiki Kaisha?

In the following situations, I generally recommend giving priority to a Kabushiki Kaisha:

1. You Plan to Raise Investment

If you intend to bring in outside investors in the future, such as venture capital or angel investors, a KK is the practical choice. Only a KK can issue shares, which is the standard way investors contribute capital in exchange for equity. A GK can also increase capital, but because it does not have a share structure, investor rights are not handled in the same well-developed way.

In Japan, most VC funds do not invest in GKs.

2. You Run a B2B Business and Need Stronger Credibility

If your customers are mainly Japanese companies, especially medium-sized or large enterprises, having “Kabushiki Kaisha” on your business card is often more effective. Some large companies even treat KK status as an internal procurement preference. This is not a legal rule, but it is a real feature of Japanese business culture.

3. You May Want to Go Public

A GK cannot be listed on a stock exchange. A KK can. If you have a long-term IPO ambition, starting as a KK avoids the trouble of a later organizational conversion.

4. You Expect to Work With Major Japanese Companies

For bank financing, government subsidies (補助金 / ほじょきん), and large project tenders, a KK often has an advantage. There is no formal legal discrimination against GKs, but the practical difference in perceived reliability is real.

5. You Have Multiple Co-Founders and a Complex Equity Structure

If you are launching with several partners, a KK provides a clearer and more standardized way to define each person’s rights through shareholding. If someone exits later or transfers ownership, the legal framework for share transfer is also more established.

When Should You Choose a Godo Kaisha?

In the following situations, a Godo Kaisha may be the smarter choice:

1. Solo Founder or Small-Scale Business

If you are setting up the company alone, or with only two or three people, the low cost and simplicity of a GK are very attractive. The money you save on incorporation is often better spent on marketing or equipment.

2. You Are Sensitive to Startup Costs

This matters especially for founders who have just arrived in Japan or have limited funds. A GK lets you get the company off the ground at the lowest cost. If the business grows later, you can always convert to a KK.

3. IT, Consulting, Freelance, or Service-Based Work

If you provide website development, design, translation, consulting, or cross-border e-commerce, your clients, especially overseas clients, usually do not care what corporate form you use. A GK is often more than sufficient.

Apple, Amazon, and Google all use the Godo Kaisha structure in Japan. If anyone asks, that is a perfectly respectable comparison.

4. You Want to Incorporate Quickly

The incorporation process for a GK is shorter because there is no need for notarization of the articles. From preparation to completed registration, it can often be done in 1-2 weeks. If time is tight, that can matter.

5. You Need Flexible Profit Allocation

If the founders want to distribute profits based on contribution rather than capital contribution, the flexibility of a GK’s articles can accommodate that.

Can You Convert a Godo Kaisha Into a Kabushiki Kaisha Later?

Yes, absolutely. In Japan, this is called an organizational conversion (組織変更 / そしきへんこう), and it is expressly permitted under the Companies Act.

Conversion Procedure

The rough steps are:

Prepare an organizational conversion plan (組織変更計画書)
Obtain unanimous consent from all members
Complete creditor protection procedures (Official Gazette notice plus individual notices, with at least one month required)
File the conversion registration with the Legal Affairs Bureau
Registration is completed: the GK is extinguished and the KK comes into existence

Cost

Item	Amount
Registration tax (dissolution of GK)	¥30,000
Registration tax (establishment of KK)	¥30,000
Official Gazette publication fee	About ¥30,000-¥40,000
Judicial scrivener service fee	About ¥80,000-¥150,000
Total	About ¥170,000-¥250,000

Timeline

From start to finish, the process usually takes 1.5-2 months, mainly because the creditor protection notice period alone requires at least one month and cannot be shortened.

Points to Watch

The corporate number stays the same: After the organizational conversion, the company’s corporate number remains unchanged, and the company is treated as the same legal entity for tax purposes.
Contracts and licenses must be updated: Even though the legal entity continues, the company name and legal form change, so bank accounts, contracts, and licenses all need change notifications. That can be cumbersome.
No direct impact on your visa: The conversion itself does not affect your Business Manager Visa, but it is wise to confirm with Immigration in advance and submit an updated company registry certificate when you next renew. For the renewal documents, see our Business Manager Visa renewal materials checklist.
Professional help is advisable: The legal documentation for organizational conversion is fairly technical, so it is usually best handled by a judicial scrivener.

Looked at another way, if you are unsure right now, you can start with a GK and convert later once the business has traction. The combined cost of forming a GK and later converting it is often similar to starting with a KK from the outset, but you gain the flexibility of testing the business first at a lower cost.

Frequently Asked Questions

Q1: Is a Godo Kaisha somehow “lower status” than a Kabushiki Kaisha?

No. A Godo Kaisha is a fully recognized company form under the Companies Act and has equal legal status to a Kabushiki Kaisha. Apple Japan, Amazon Japan, and Google Japan are all Godo Kaisha entities. The only real issue is that market familiarity is still catching up, and some traditional industries may still have outdated assumptions.

Q2: Will Immigration reject a Business Manager Visa application because the company is a Godo Kaisha?

No. Immigration reviews the substance of your business, capital, and ability to manage it. The company form is not the determining factor. For the detailed requirements, see Business Manager Visa eligibility requirements. For common reasons for refusal, see common reasons Business Manager Visa applications are denied.

Q3: Can one person set up a Kabushiki Kaisha alone?

Yes. Since the 2006 Companies Act reforms, one person can establish a Kabushiki Kaisha and serve as the sole director and Representative Director. No statutory auditor and no multiple directors are required.

Q4: What is the difference between a GK’s “Representative Member” and a KK’s “Representative Director”?

In terms of externally representing the company and signing contracts, the legal effect is the same. The difference is mainly the formal title. In a KK, the representative is a “Representative Director.” In a GK, the representative is a “Representative Member.” A GK cannot officially register titles such as “director” or “president” in the company registry, although using “CEO” or “Representative” on business cards is generally fine.

Q5: What is the minimum capital requirement?

Legally, both KKs and GKs can be established with capital as low as ¥1. But if you plan to apply for a Business Manager Visa, the new standard from October 2025 is ¥30 million (the old standard was ¥5 million, with transitional rules for existing visa holders). Also, very low capital can make bank account opening harder and reduce business credibility. For more on that, see our Japan corporate bank account guide.

Q6: Can a foreign national serve as the Representative Member of a Godo Kaisha?

Yes. A foreign national can serve as the Representative Member of a GK or the Representative Director of a KK. That said, if you do not have an address in Japan, some practical issues may arise, and in some cases the Legal Affairs Bureau may expect at least one representative with a Japanese address. Requirements can vary slightly in practice, so it is best to confirm in advance.

Q7: Can a Godo Kaisha hire employees?

Of course. A GK and a KK are treated the same when it comes to hiring employees. The obligations for social insurance and labor insurance are also the same.

Q8: After setting up the company, can I apply for dependent visas for my family?

Yes. If you hold a Business Manager Visa and have stable income, your spouse and children may apply for Dependent status (家族滞在 / かぞくたいざい). This has nothing to do with company type. See our Dependent Visa guide for details.

Q9: Can a Godo Kaisha apply for subsidies and grants?

Yes. Most Japanese subsidies (補助金) and employment grants (助成金) treat GKs and KKs equally. A small number of programs may have restrictions based on company type, but that is uncommon.

Q10: Does the company type affect permanent residence eligibility later?

No. Permanent residence (永住許可) is assessed based on factors such as your length of stay, tax payment record, social insurance compliance, and whether you have violated any laws. Whether your company is a KK or a GK does not matter. For the path from a Business Manager Visa to permanent residence, see our guide to moving from a Business Manager Visa to permanent residence.

Final Thoughts

To sum up:

Limited budget, solo founder, non-B2B business -> Godo Kaisha: cheaper and simpler
Need outside investment, targeting Japanese companies, long-term growth plan -> Kabushiki Kaisha: stronger credibility
Still undecided -> start with a Godo Kaisha and convert later if needed

Whichever structure you choose, the most important thing is building a real business. The company form is just the container. What you put into it is what determines whether the business succeeds.

If you are preparing to start a business in Japan, begin with our complete Business Manager Visa guide and visa application checklist so you can prepare properly before moving forward.

Disclaimer: This article is based on Japanese laws and regulations as of 2025 and is for general information only. It does not constitute legal advice. For company formation and visa applications, you should consult a qualified judicial scrivener (for incorporation) or administrative scrivener (for visa matters).