Running a small business - Kojin Jigyo

[Sarutaro]

Anyone here have any experience running a Kojin Jigyo type of company, the simplest form of company? I am doing business and thinking about what form of company to register. For me, the "status" or having K.K. or Y.K. after my company name is not a requirement. I just want a legal way of making money, sending bills, and of course deduct various expenses. Do I even NEED to register a company?
I also want to minimize all adminstration and keep things as easy to maintain as possible so I can focus on the core business, which in my case is a kind of consultant agency.

Any advice and recommendations are highly appreciated.

Thank you.

[IkemenTommy]

Anyone here have any experience running a Kojin Jigyo type of company, the simplest form of company? I am doing business and thinking about what form of company to register. For me, the "status" or having K.K. or Y.K. after my company name is not a requirement. I just want a legal way of making money, sending bills, and of course deduct various expenses. Do I even NEED to register a company?
I also want to minimize all adminstration and keep things as easy to maintain as possible so I can focus on the core business, which in my case is a kind of consultant agency.

Any advice and recommendations are highly appreciated.

Thank you.
Yes you will have to register. Whether it's KK or YK depends on how much the company grosses.. 5M yen or something along that.. Sorry, not much of a help but all I know from the people who have done it is that it's not really that difficult.

[Hanakuso]

I wonder if there are any japanese small business courses that you can take? id say thatd be a great start...

Anyone know of one?

[FG Lurker]

Yes you will have to register. Whether it's KK or YK depends on how much the company grosses.. 5M yen or something along that.. Sorry, not much of a help but all I know from the people who have done it is that it's not really that difficult.
YK or KK has nothing to do with how much a company grosses.

http://www.mobil1.jp/

Yes, ExxonMobil YK.

Sarutaro -- Lots is changing in April with regards to forming companies in Japan. As it is already mid-March I'd wait until everything has changed before making decisions about what type of company you want. There are two new types becoming available, a LLP and a LLC. There'll no doubt be lots of info about them after the laws officially change.

[drpepper]

I have been a kojin jigyou for more than 10 years, basically when you file your personal taxes you simply add that you have an office and there is a place for you to put that office/business name. voila. you are registered... deduct away.. I have not paid more that 5,000yen in taxes in the last 8 years... :-)

[kamome]

My knowledge is probably out-of-date, but you should think about registering an entity that will allow you both to limit your liability and to lower your taxable income. If you are a sole proprietorship, you will have unlimited liability and your income/expenses will be reportable on your personal tax return. Probably not a wise choice.

At one point, the YK would have been the best vehicle for your type of business and did not cost much to set up. However, the last I heard, the law allowing natural persons to establish YK's was to be repealed and all existing YK's were to be converted to KKs. I am not sure if that has happened yet - but if enacted, these legal reforms would be effective April 1, 2006.

A new entity, known as a Godo Kaisha (GK) will be available that will function like a US limited liability company. Under the proposed regs, a GK would allow you to check-the-box as to the tax status of the company (i.e., taxed as a partnership or as a corporation). Thus, you would get the limited liability of a corporation but pass-through taxation as a partnership.

You should speak to a Japanese lawyer about setting up your business as a GK. Find out what it would cost and what the maintenance requirements are. Also see if you can still use the YK form and whether it would be more advantageous from a tax perspective. In any case, if you're a small business, it probably wouldn't make sense to form a KK given the larger costs of compliance.

You can find much of this information on-line. Probably best to do your homework before speaking to a lawyer/accountant.

[Mike Oxlong]

The SOHO (http://www.gaijinpot.com/bb/forumdisplay.php?f=28) section of GaijinPot may have something...

[Sarutaro]

I have been a kojin jigyou for more than 10 years, basically when you file your personal taxes you simply add that you have an office and there is a place for you to put that office/business name. voila. you are registered... deduct away.. I have not paid more that 5,000yen in taxes in the last 8 years... :-)

How are the requirements for bookkeeping with this form of company? Also, do you have to prepare a formal annual report at the end of the fiscal year to accompany your blue return?

[drpepper]

How are the requirements for bookkeeping with this form of company? Also, do you have to prepare a formal annual report at the end of the fiscal year to accompany your blue return?

Requirements? What are those? Never heard of them never seen them have no use for them :-)

Basically it is for a personal business.. you keep your normal type records of where you spent the money and if they ever ask to see it then you show them.. I have not needed to show anything to them. Also note that I am a poor fuck and am not grossing several senman in sales so as a real small SOHO they could'nt give a shit about me.. My guess is if you are going to be grossing over say 20 mill then you may want to look into something more formal.

[Sarutaro]

Requirements? What are those? Never heard of them never seen them have no use for them :-)

Basically it is for a personal business.. you keep your normal type records of where you spent the money and if they ever ask to see it then you show them.. I have not needed to show anything to them. Also note that I am a poor fuck and am not grossing several senman in sales so as a real small SOHO they could'nt give a shit about me.. My guess is if you are going to be grossing over say 20 mill then you may want to look into something more formal.

That sounds great, DrPepper. Just the type of business I am looking for. Thank you for your invaluable help.

[homesweethome]

Let me preface this by saying I am not recommending you do anything illegal.

That said, the common Japan business person keeps two sets of books, one for the tax people and the other for yourself.

This is just common survival sense!

But if you don't need to do it, then just don't!

[Hanakuso]

I wonder if there are any japanese small business courses that you can take? id say thatd be a great start...

Anyone know of one?


I sincerely apologise for this lame half advice half hijacking attempt... It will not happen again, and I will say no less than 300 hail marys and attempt no less than five summersaults for my foolishness..

Sincerely,

Kuso

[Mels]

YK or KK has nothing to do with how much a company grosses.

http://www.mobil1.jp/

Yes, ExxonMobil YK.

Sarutaro -- Lots is changing in April with regards to forming companies in Japan. As it is already mid-March I'd wait until everything has changed before making decisions about what type of company you want. There are two new types becoming available, a LLP and a LLC. There'll no doubt be lots of info about them after the laws officially change.

That is great news FG..

I would look into the LLC or LLP. If Japan introduces these forms of business registration, it generally offers liability protection similar to that of a corporation but is taxed differently.

I registered my company here in California as a LLC. It is still a fairly new type of business set up for the US, but it has been working well for me.

As a comparison for you, in california, I only pay the state $800 a year for registration fees. I hope Japan will make this type of business registration affordable and easy to use.

Additionally, as a comparison, you can read up on LLC's and LLP's here. http://www.ss.ca.gov/business/filings.htm#LLC

Japan usually approaches things differently, but at least you may have a starting point to ask certain questions.


good luck and keep us posted..

[IkemenTommy]

The problem with setting up business in Japan, especially for foreigners, is that they have very little subsidies or incentives so that is why you have less and less foreign investments here, compared to elsewhere like Hong Kong or Singapore.