FAQ

Audit requirement in Japan

Question

Does the government need Kabushiki-Gaisya (similar to C/S corporation) submit audited financial statement regularly?

Answer

Annual audit report is mandatory for following entities in Japan.

• Companies with JPY 500 million or more capital OR JPY 20 billion or more total liabilities
• Companies which provide to set “auditing committee” defined under corporate law by the articles in corporation.
• Companies set internal auditors on voluntary basis

If you plan to establish an entity such as Kabushiki-Gaisya with JPY 500m or more initial investment, your corporation need to be audited from the first iscal year.

You can incorporate with JPY 1 capital only under current Japanese Corporate Law, but actually need JPY 1-2million to start your business including registration fee and tax, rent an address, make corporate stamp (which is mandatory for Japanese corporations) and fees for specialists such as lawyers.