Choose a KK (Kabushiki Kaisha (株式会社)) if you need bank credibility, plan to raise investment, or intend to apply for a Business Manager visa; choose a GK (Godo Kaisha (合同会社)) if you are a wholly-owned subsidiary or testing the market and want lower cost and less administrative overhead. Both permit 100% foreign ownership and cost as little as ¥1 in legal minimum capital, and the real difference is banking perception, governance burden, and long-term cost, not legal capability. Full details on incorporating either structure from overseas are in our Japan Company Incorporation guide.
What Is the Difference Between a KK and a GK?#
| Feature | 🏢 KK (株式会社) | 🏠 GK (合同会社) |
|---|---|---|
| English equivalent | Corporation / Co., Ltd. | LLC |
| Legal basis | Companies Act, Part II | Companies Act, Part III |
| Ownership unit | Shares (株式) | Membership interests (持分) |
| Foreign ownership | ✅ 100% permitted | ✅ 100% permitted |
| Minimum capital | ¥1 (legal minimum) | ¥1 (legal minimum) |
| Market perception | Gold standard - expected by banks, enterprise clients, government | Acceptable - Amazon Japan & Apple Japan operate as GK |
| IPO / fundraising capable | ✅ Yes | ❌ No (must convert to KK) |
📌 Legal Source: Companies Act (会社法) - English Translation
How Much Does It Cost to Set Up a KK vs. a GK?#
| Cost Item | KK | GK |
|---|---|---|
| Registration tax (Legal Affairs Bureau) | ¥150,000 | ¥60,000 |
| Notary fee (Articles of Incorporation) | ¥30,000–50,000 | ¥0 (not required) |
| Stamp duty (paper filing) | ¥40,000 (waived if e-filed) | ¥40,000 (waived if e-filed) |
| Corporate seal (法人印鑑) | ~¥10,000–30,000 | ~¥10,000–30,000 |
| Total government fees | ||
| Professional service (bilingual) | From ~$3,000 | From ~$1,700 |
💡 The KK costs roughly 3× more than a GK at incorporation. But the cost gap narrows quickly once you factor in ongoing operations - both pay the same taxes, same social insurance, same accounting fees.
How Do KK and GK Governance Structures Differ?#
KK - Formal Structure
GK - Flexible Structure
Ongoing Administrative Burden
| Obligation | KK | GK |
|---|---|---|
| Annual shareholders' meeting | ✅ Required within 3 months of FY-end | ❌ Not required |
| File financial statements with registry | ✅ Required | ❌ Not required |
| Public notice of financials (決算公告) | ✅ Required by law (often ignored by SMEs) | ❌ Not required |
| Corporate tax return | ✅ Same | ✅ Same |
| JCT return | ✅ Same | ✅ Same |
| Minimum inhabitant tax (even if ¥0 profit) | ¥70,000/year | ¥70,000/year |
Which Structure Gets a Bank Account Approved Faster?#
🏦 This is where KK's extra cost pays for itself.
Japanese corporate banks - particularly the Big Three (MUFG, SMBC, Mizuho) - have strict internal risk-assessment criteria for account opening. Foreign-owned companies face additional scrutiny under post-2016 AML/KYC rules. Bank account approval is the single biggest operational risk for a newly incorporated foreign-owned entity regardless of structure; our corporate bank account guide covers the approval-rate reality and how to improve your odds on either structure.
| Banking Factor | KK | GK |
|---|---|---|
| Perception by major banks | ✅ Familiar, credible | ⚠️ Less established perception |
| Account opening success rate | Higher | Lower (but improving) |
| Investor / partner confidence | ✅ Expected for B2B | ⚠️ May raise questions |
| Government contract eligibility | ✅ Standard | ⚠️ May face limitations |
💡 Practical reality: While a GK can open bank accounts, the process is smoother and faster with a KK. If banking is critical for your operations (and it almost always is), the extra ¥100,000–150,000 in setup costs is well worth it.
Do You Need a Japan-Resident Director for a KK or GK?#
Legal Position (2026)
Since March 2015, the Companies Act does not require a Japan-resident director for either KK or GK. All directors and shareholders may reside overseas.
Practical Reality
⚠️ While not legally required, having a Japan-resident director is strongly recommended - especially for banking.
| Scenario | Without JP Resident Director | With JP Resident Director |
|---|---|---|
| Incorporation | ✅ Possible | ✅ Possible |
| Corporate bank account | ❌ Very difficult - most major banks require in-person visit by a representative with JP address | ✅ Significantly easier |
| Business Manager visa | ❌ Cannot apply (no presence in Japan) | ✅ Required for visa |
| Day-to-day operations | ⚠️ Limited - signing contracts, receiving registered mail | ✅ Full operational capability |
| Tax authority correspondence | ⚠️ Need separate tax agent | ✅ Direct communication |
💡 Our recommendation: If you're incorporating remotely, consider appointing a qualified Japan-resident representative director. This doesn't mean giving up control - directorship arrangements can be structured to maintain your authority while satisfying banking and operational requirements.
When Should You Choose a KK?#
If a Business Manager (経営・管理) visa is part of the plan, a KK provides the strongest application foundation; see our Business Manager Visa reform guide for the current capital and staffing thresholds that apply regardless of entity type.
| Scenario | Why KK |
|---|---|
| 🏦 Need corporate bank account quickly | KK signals credibility to Japanese banks |
| 💼 Enterprise B2B clients | Japanese corporates expect 株式会社 on contracts |
| 📈 Plan to raise investment | Shares are the standard equity instrument |
| 🤝 Joint venture with Japanese partner | KK provides proper shareholder governance |
| 🏛️ Government contracts | KK is the expected form |
| 🛂 Business Manager visa planned | KK provides strongest visa application foundation |
| 🔮 Long-term Japan commitment | Structure that grows with you |
When Should You Choose a GK?#
| Scenario | Why GK |
|---|---|
| 💰 Budget-conscious setup | Saves ~¥150,000+ in government fees |
| 🏭 Wholly-owned subsidiary | No external shareholders = no need for KK governance |
| 🧪 Market testing | Fast setup (as little as 7 business days), easy to convert later |
| 🔧 Operational simplicity | No annual meeting obligations, no public disclosure |
| 🌐 Amazon / Apple model | Both operate major Japan businesses as GK |
| 📦 Import-only with ACP | Structure is secondary when ACP handles customs |
Can You Convert GK → KK Later?#
Yes. The Companies Act permits converting a GK to a KK (組織変更). However, it involves:
| Step | Cost / Time |
|---|---|
| Shareholders' (members') resolution | Internal |
| New Articles of Incorporation drafted | Professional fees |
| New registration tax (KK rate) | ¥150,000 |
| Notarization of new Articles | ¥30,000–50,000 |
| Legal Affairs Bureau re-registration | 2–4 weeks |
| Bank account / contracts updated | Administrative overhead |
| Total cost | ¥300,000–500,000+ |
⚠️ Conversion is possible but not free. If there's a reasonable probability you'll need KK-level credibility within 2 years, starting as KK is more cost-effective than converting later.
Founders coordinating entity choice, incorporation, and the registration filing as one engagement can review the full scope on the company incorporation service page.
✅ Quick Decision Framework#
Frequently Asked Questions#
Can a 100% foreign-owned company choose either a KK or a GK in Japan?
Yes. Both structures permit full foreign ownership with no local shareholder requirement, and both have a legal minimum capital of ¥1. The choice between them turns on banking perception, governance burden, and long-term cost rather than any restriction on foreign ownership.
Is a GK taken seriously by Japanese banks and enterprise clients?
A GK is a fully legitimate structure, used by major operators such as Amazon Japan and Apple Japan, but it carries a less established perception with major banks than a KK, and account opening tends to be slower. Enterprise B2B clients and government counterparties more often expect a 株式会社 on the contract, which is why B2B-heavy or investment-seeking businesses usually choose KK despite the higher setup cost.
Do I need a Business Manager visa to incorporate in Japan?
No. Since March 2015, the Companies Act has not required a Japan-resident director for either a KK or a GK, so incorporation itself does not depend on any visa. A Business Manager (経営・管理) visa only becomes relevant if a founder plans to relocate to Japan to run the company directly, and a KK provides the stronger foundation for that specific filing.
Official References#
| Source | Link |
|---|---|
| Companies Act (English) | japaneselawtranslation.go.jp |
| Commercial Registration Act (English) | japaneselawtranslation.go.jp |
| JETRO - Setting Up Business in Japan | jetro.go.jp |
| ISA - Business Manager Visa | moj.go.jp |
This article is informational only and does not constitute legal, tax, or regulatory advice. Consult a qualified advisor before acting on the content. Last updated: August 2026.