Do you see business opportunities around every corner, but dread the thought of tackling the Japanese bureaucratic system to launch your idea? In reality, there are few barriers keeping you from getting started. Jeffrey Strain explains the basics of starting your own company.

For those who have entertained the idea of starting their own business in Japan, but have refrained from trying because they thought it would be next to impossible, the truth is that there are few obstacles in your way. In fact, according to the Japan External Trade Organization, foreign investment is welcome with no additional restrictions placed on foreigners when setting up a company than their Japanese counterparts.

While extra bureaucratic restrictions for foreigners don't exist, getting a company started in Japan is still not a walk in the park. You'll need to do the same extensive preparation and research you'd need to do in your native country before undertaking the task if you want to make your company a success. That would include making a business plan, doing market research, securing financing for your venture, etc. While the additional challenges of setting up a company in Japan are manageable for those with superior Japanese skills, those who lack them or who don't have business backgrounds will probably need to seek help from experts to get their company started.

Once you've completed the preliminary preparations to get your business off the ground, then the legal and administrative work to make the company a reality begins. These tasks range from doing a name search to make sure the company name you want to use is available, to finding out what government permits, licenses and approval you'll need for the particular business field you've chosen. For example, companies which want to conduct activities deemed to be in the national interest, or of national security, must give prior notification to the Finance Ministry as well as any other relevant ministries which have a connection with that particular field. While it's true that these restrictions would not apply to the average person wanting to start a company, it's also true that diverse activities such as agriculture and leather product manufacturing fall under these headings.

After doing the appropriate searches and completing the needed documents, it'll be necessary to complete your company's articles of incorporation (teikan). These articles must contain the company's name, the company's objectives, the amount of authorized share capital, as well as any other fundamental matters relating to the proposed business. Once completed, the articles must be notorized by a public notary before being submitted to the Legal Affairs Bureau to register the company.

There are two types of companies you can choose from when submitting your articles of incorporation; a joint stock corporation (kabushiki kaisha), or a limited liability corporation (yugen kaisha). While there are a variety of differences between the two types of companies (see table), the main difference which tends to influence most individual foreigners wanting to start a company is the amount of capital required. Joint stock corporations have a minimum capital requirement of more than JY10 million, while limited liability corporations only require JY3 million in capital. Thus, limited liability corporations are favored for financial reasons by most wanting to start a company in Japan.

There are several types of working visas available for those starting a company in Japan (Investor/Business Manager, Engineer, Specialist in Humanities/International Services, Intra-company Transferee), but the most common for individuals is the Investor/Business Manager visa. The requirements for this visa include having a business facility in Japan, two or more employees living in Japan engaged in the business, experience in business management and a sufficient salary for the applicant. Still, the largest obstacle to starting a business in Japan for many is the language.

In most cases it makes sense for even those individuals with top Japanese language skills to hire a legal agent (shihoshoshi) to handle and prepare the required Japanese documents and paperwork. For those looking for a challenge, a number of "How To" books in Japanese are available at most bookstores on starting up a business. The Japanese External Trade Organization's website (www.jetro.go.jp) also provides a large amount of basic downloadable information in English on this subject. In the end, the process will provide those considering starting up a company in Japan a number of challenges, yet it's probably a lot easier than commonly thought for those ready to launch their perfect idea.

Reproduced by permission of Kansai Time Out.