Using Your Home as an Office When Setting up a Company

[dreg]

[color="Silver"]Sorry, I am unable to correct the typos in the thread title.[/color]

I am going to be running a business from my apartment, can someone explain the legalities of doing this to me?

Do I have to register one of my rooms as being office space? What does this imply?
Can I run a business without it being registered as a KK?
If not, what are the costs involved, this will be a very small operation, a one man band (printing and designing business cards).

If I do a register as a KK, how much does it cost. I sometimes hear that this can be done for one yen, other times I hear it is several million.



Thank you

[FG Lurker]

I am going to be running a business from my apartment, can someone explain the legalities of doing this to me?

Legalities? No idea. Lots of people do it though, it is unlikely that you will have problems. Perhaps if you try to run a noisy business your neighbours will complain, but otherwise you should be fine.

Do I have to register one of my rooms as being office space? What does this imply?

Your contract probably says something about you not being allowed to run a business from the premises... If you pay your rent on time though and don't make noise/problems for other people then it is unlikely that you will have troubles with the landlord. If you're a PITA tenant and they are looking for a way to boot you out then this could be the way if they find out about it.

Can I run a business without it being registered as a KK?

Sure, you can be a sole proprietor here. No registration necessary. Also no legal protection if someone sues your ass, but this is less of a problem in Japan than many other countries.

If I do a register as a KK, how much does it cost. I sometimes hear that this can be done for one yen, other times I hear it is several million.

Capital requirements are gone now as far as I know. Setting up a KK is still expensive though as registration is reasonably complex. There are other company types that are a lot simpler but I don't have solid information to post.

If it was me I would start it as a sole proprietor and then decide what to do about registration at some point down the road if the business goes well. That might not be the smartest thing to do, but it is what I would do.

[dreg]

Thank you so much.

[Catoneinutica]

[color="Silver"]Sorry, I am unable to correct the typos in the thread title.[/color]

I am going to be running a business from my apartment, can someone explain the legalities of doing this to me?

Do I have to register one of my rooms as being office space? What does this imply?
Can I run a business without it being registered as a KK?
If not, what are the costs involved, this will be a very small operation, a one man band (printing and designing business cards).

If I do a register as a KK, how much does it cost. I sometimes hear that this can be done for one yen, other times I hear it is several million.



Thank you

I can definitely offer some first-hand info on this, having recently formed a Kabushiki Gaisha. I used a "judicial scrivener" (roughly equivalent to a paralegal?) to do the footwork. The total amount I had to pay was about 600,000 yen, about half of which went to the paralegal (money well spent, IMHO). The various fees for setting up the KK amounted to about 200,000, plus I had to apply for an "antique dealer's license," which cost about 100,000 in fees. For a KK only, then, you would be looking at about 200,000, plus any legal assistance costs. If you have time and speak some Japanese - and have a high bureaucrat-tolerance threshold - you could do the filing yourself.

As for capitalization, any amount is okay under the current revised requirements, but my paralegal seemed to imply that more was better.

We're renting now, and didn't have to obtain the consent of the owner to register the KK. We did, however, have to his consent for the antiques license. And he turned me down. So now we're planning to use the address of the house we're building from Feb.

Which leads to a question of my own: If I have a web page on which I list an inventory of pricey antiques and art for sale, would it be dangerous to use our home as the registered business address? Any chimpira could see the web page, oogle the high prices, look up the business registration info for my company, and pay our house a visit. I'm wondering whether I should rent a crappy little 1DK to use as the business address, or just use my mother-in-law's. Am I succumbing to paranoia in my dotage?

(PS: PM me if you have any questions about the KK registration process)

[American Oyaji]

I'd say rent that crappy 1DK

[kamome]

If you just want to educate yourself about the various forms of business entities available to you in Japan, you should explore the websites of the "Big 4" tax/audit companies - Deloitte, KPMG, E&Y and PricewaterhouseCoopers. Their Tokyo offices all publish articles and newsletters explaining the legal and tax background of Japanese corporate and non-corporate business vehicles. The latest regulatory changes that I know of occurred in May 2006, when the law abandoning Yugen Kaisha and creating a new type of business vehicle, Godo Kaisha (which are similar to US LLC's) came into effect. There should be articles covering this development on the Big 4 websites.

I also recall vaguely that you may be able to deduct some portion of your housing costs in Japan if you use your personal residence for business purposes. You would need to speak to a zeirishi (licensed Japanese tax accountant) or a kaikeishi (Japanese CPA) to confirm what the current rules are.