# Japan

 Country code: JP · Currency: JPY · Language: Japanese

**Pros**
- Exceptional public safety and low crime rates protecting private property and personal security.
- World-class infrastructure and reliable logistics networks for efficient business operations and connectivity.
- High institutional transparency and minimal public sector corruption ensuring a predictable legal environment.

**Cons**
- High corporate tax burdens and complex fiscal regulations limiting capital retention and reinvestment.
- Rigid labor market regulations and bureaucratic hurdles hindering flexible employment and rapid scaling.
- Stagnant domestic market growth due to severe demographic decline and aging population trends.

Long story short: Starting a company in Japan feels like an initiation rite of stamps and paperwork: you'll grind for weeks before you bill your first client.

The flip side: zero corruption, a rock-solid banking system, infrastructure that runs like clockwork, and crime that's basically a non-issue in Tokyo's wealthier districts.

A few more things worth knowing: corporate tax bites hard, the food is a genuine joy, the scenery is worth the trip, and locals stay polite but keep their distance.

## Will your income be taxed?

Long story short: YES, A LOT.
On paper, **Japan** shears you at up to **45%**. In practice, the *territorial* regime only bites income sourced locally: foreign salary, foreign dividends, foreign gains walk through untouched. The sticker is there to scare; the machinery doesn't reach that far.

Earn your living abroad and the local taxman mostly waves at you from a distance.

**01.1 Income tax**

| Metric | Value | Detail |
| --- | --- | --- |
| Personal income tax | 5 → 45% | progressive · 7 brackets |

| Bracket (USD) | Rate |
| --- | --- |
| 0 – 12,240 | 5% |
| 12,240 – 20,714 | 10% |
| 20,714 – 43,625 | 20% |
| 43,625 – 56,493 | 23% |
| 56,493 – 112,986 | 33% |
| 112,986 – 251,080 | 40% |
| 251,080 + | 45% |

**01.2 Tax residence test**

_A single active rule is enough to make you tax-resident._

| Metric | Value | Detail |
| --- | --- | --- |
| 183-day rule | does not exist here |  |
| Economic interest | does not exist here |  |
| Family centre | does not exist here |  |
| Habitual abode | exists here |  |
| Extended-stay test | does not exist here |  |

## Will your wealth be taxed?

Long story short: YES, FAIRLY.
Capital gains in **Japan** cost **20.3%** on disposal, with no annual wealth levy. But *inheritance* comes back for seconds when assets pass down.

Same money, two tollbooths: the sale, then the succession.

**02.1 Investment income**

| Metric | Value | Detail |
| --- | --- | --- |
| Capital gains | 20.3% | progressive · +9% short-term capital gains on real property held for five years or less |
| Dividend tax | 45% | progressive · +2.1% applied to national income tax |

| Bracket (USD) | Rate |
| --- | --- |
| 0 – 12,240 | 5% |
| 12,240 – 20,714 | 10% |
| 20,714 – 43,625 | 20% |
| 43,625 – 56,493 | 23% |
| 56,493 – 112,986 | 33% |
| 112,986 – 251,080 | 40% |
| 251,080 + | 45% |

| Metric | Value | Detail |
| --- | --- | --- |
| Interest income | 45% | progressive |

| Bracket (USD) | Rate |
| --- | --- |
| 0 – 12,240 | 5% |
| 12,240 – 20,714 | 10% |
| 20,714 – 43,625 | 20% |
| 43,625 – 56,493 | 23% |
| 56,493 – 112,986 | 33% |
| 112,986 – 251,080 | 40% |
| 251,080 + | 45% |

**02.2 Wealth & estate**

| Metric | Value | Detail |
| --- | --- | --- |
| Wealth tax | NONE | no annual wealth tax · no real-estate wealth tax · no net-worth assessment |
| Inheritance system | APPLIES | heir-based · 5 heir classes |

| Heir | Top rate | Allowance |
| --- | --- | --- |
| Spouse | 55% | JPY 160,000,000 |
| Children | 55% | — |
| Siblings | 55% | — |
| Other relatives | 55% | — |
| Non-relatives | 55% | — |

**02.3 Crypto**

| Metric | Value | Detail |
| --- | --- | --- |
| Crypto · tax regime | PROGRESSIVE | Rate: 55% · Crypto gains are classified as Miscellaneous Income (Zatsu-shotoku) and taxed at progressive national rates (5% to 45%) plus a flat 10% local inhabitant tax, reaching a maximum of 55%. Swapping one cryptocurrency for another is a taxable event. Salaried employees with total miscellaneous income under 200,000 JPY are generally exempt from filing a national tax return, though inhabitant tax may still apply. A major tax reform proposing a 20% flat tax for specified crypto assets is currently under discussion for 2026. |
| Crypto-to-crypto | TAXABLE | each swap counts as a disposal — gains realised at every trade |
| FATF travel rule | SIGNED | committed but not yet enforced |

## Easy to run a company there?

Long story short: YES, BUT TAXED.
Corporate tax in **Japan** lands at a *moderate* **19%**, no IP-box to soften it. Standard accounting, VAT at **10**, the usual dose of paperwork. Nothing to celebrate, nothing to flee.

**03.1 Rates**

| Metric | Value | Detail |
| --- | --- | --- |
| Corporate tax | 19% | progressive · +10.3% National local corporate tax applied to corporate tax liability |

| Bracket (USD) | Rate |
| --- | --- |
| 0 – 50,216 | 19% |
| 50,216 + | 19% |

| Metric | Value | Detail |
| --- | --- | --- |
| VAT standard rate | 10% | 2 distinct tiers in force |

| VAT family | Category | Rate |
| --- | --- | --- |
| Food & drink | food | 8% |
| Food & drink | non-alcoholic | 8% |
| Food & drink | alcohol | 10% |
| Print media | books | 10% |
| Print media | ebooks | 10% |
| Print media | newspapers | 8% |
| Hospitality | restaurants | 10% |
| Hospitality | takeaway | 8% |
| Digital & telecom | digital | 10% |

**03.2 Regime & registry**

| Metric | Value | Detail |
| --- | --- | --- |
| IP Box · Patent Box | NONE | no IP regime · IP income taxed under standard corporate rules |
| Misuse of corporate assets | CRIMINAL | criminal liability · Companies Act Art. 960 (Special Breach of Trust) and Penal Code Art. 253 (Professional Embezzlement) · Japan strictly adheres to the 'Autonomy of the Legal Entity' principle. Under established Supreme Court precedents (e.g., June 26, 1970, and November 9, 2006), a sole shareholder-director can be held criminally liable for misappropriating company funds. The law considers the corporation's assets to be legally distinct from the individual's personal property; therefore, the 'consent' of the sole shareholder does not negate the breach of duty to the company or the criminal nature of the act, regardless of the company's current solvency. |
| Shareholders privacy | PRIVATE | Commercial Register (Shogyo Tokibo) |
| Directors privacy | PUBLIC PAYWALL | Commercial Register (Shogyo Tokibo) |

**03.3 Incorporation cost**

_In this country, the most standard company form is called 株式会社 (Kabushiki Kaisha (Joint Stock Company)). The costs below are for incorporating a company in its simplest form, for reference only._

| Metric | Value | Detail |
| --- | --- | --- |
| Registration License Tax (Minimum) | USD 942 |  |
| Notary Public Fee (Articles of Incorporation) | USD 314 |  |
| Professional Incorporation Service (Judicial Scrivener) | USD 1,569 |  |
| Corporate Seal Set and Registry Certificates | USD 188 |  |
| Total | USD 3,013 |  |

## A good fit for a holding?

Long story short: NOT REALLY.
**Japan** brings an *extensive* treaty network (**77** agreements) and a participation-exemption regime, but the exemption stops at **95%**, so **5%** of qualifying dividends still gets taxed at the corporate rate (**19%**).

For a holding, that residual slice is a slow leak in the hull: every distribution drips a few points overboard.

*Decent, not elite.* The treaties do the heavy lifting; the regime doesn't quite finish the job.

**04.1 Substance & exemptions**

| Metric | Value | Detail |
| --- | --- | --- |
| Territorial · individuals | REMITTANCE | remittance basis — foreign income taxed only when brought in |
| Territorial · corporates | WORLDWIDE | worldwide corporate taxation |
| Participation exemption | 95% | 25% holding · 6 months min |
| CFC rules | APPLY | Undistributed earnings of a foreign subsidiary are included in the Japanese parent's taxable income if the subsidiary is controlled by Japanese entities and meets specific criteria regarding its business activity, substance, or the nature of its income, particularly when the foreign tax rate falls below defined thresholds. |

**04.2 Withholding tax · non-resident**

| Metric | Value | Detail |
| --- | --- | --- |
| WHT · dividends | 20% | non-resident outbound |
| WHT · interest | 20% | non-resident outbound |
| WHT · royalties | 20% | non-resident outbound |
| Tax-haven WHT | NONE | no punitive rate on record |

**04.3 Treaty network**

| Metric | Value | Detail |
| --- | --- | --- |
| Treaties signed | 74 | active |
| Treaties pending | 1 | in negotiation |

## Easy to come and go?

Long story short: LITTLE.
Coming and going from **Japan** costs you nothing worth mentioning. *Territorial* regime (foreign income stays foreign), *no exit tax* at the door.

You show up with your stuff, you leave with your stuff, plus whatever you earned abroad in between. Borders the way they should all work.

**05.1 Exit & dual nationality**

| Metric | Value | Detail |
| --- | --- | --- |
| Exit tax | NONE | no triggers active · residence change tax-free · no deemed-disposal mechanism |
| Dual citizenship | FORBIDDEN | naturalisation requires renouncing existing citizenship |

**05.2 Citizenship paths**

| Metric | Value | Detail |
| --- | --- | --- |
| Residence | 5 years | available path to naturalisation |
| Marriage | 3 years | available path to naturalisation |
| Birth | — | not available |
| Descent | — | not available |
| Investment | — | not available |

## Is your money watched?

Long story short: YES, CLOSELY.
Yes, your money is watched here. **Japan** signed *every major* automatic-exchange framework: CRS, FATCA, CARF, MLI, MAAC. Open an account and it gets reported straight to your home tax authority (Americans: FATCA applies, no exceptions).

Corporate registries stay *non-public*, which saves a thin slice of ownership discretion. But your financial trail is made of glass.

**Multilateral reporting frameworks — 4/9 active · 4 pending**

| Item | Status | Detail |
| --- | --- | --- |
| CRS | Signed | 2018 |
| CARF | Signed | 2024 |
| FATCA | In force | 2014 |
| MLI | In force | 2018 |
| BEPS | Signed | — |
| MAAC | In force | 2013 |
| GLOBAL FORUM | Signed | — |
| EOIR | In force | — |
| CRYPTO TRAVEL RULE | None | — |

## Is it blacklisted?

Long story short: NO.
**Japan** is *clean on every major blacklist* (FATF, EU, France, Spain, Portugal, Brazil) and sits *inside* the FATF club.

Wiring money to or from here raises zero eyebrows: no flags, no extra questions, no compliance officer waking up. Reputationally, a non-event.

**Blacklist exposure — Clear everywhere**

| Item | Status | Detail |
| --- | --- | --- |
| EMBARGO | Clear | un / us / eu sanctions |
| FATF | Clear | grey / black list |
| EU | Clear | non-cooperative list |
| FRANCE | Clear | ETNC list |
| SPAIN | Clear | tax-haven list |
| PORTUGAL | Clear | favourable regimes |
| BRAZIL | Clear | low-tax list |

## Do you feel free there?

Long story short: PARTLY.
**Japan** sits in the *middle band* of the RSF press-freedom index (rank **\#66**): civil society functions, but the walls are real and you'll learn fast where they stand.

Crypto lives in the standard regulated tier.

**08.1 Press freedom**

| Metric | Value | Detail |
| --- | --- | --- |
| Press freedom · RSF index | 66/180 | score 63 · ↑ 4 ranks year-on-year |

Central bank digital currency

    Program Status Cross-border Sources     Digital Yen

The upcoming program is an end-stage trial with an eye towards implementation. BOJ will work with private-sector banks to test deposits and withdrawals from accounts, and check whether the currency can work without internet access in emergency scenarios.

Bank of Japan

   PROOF OF CONCEPT   —   [announce →](https://www.boj.or.jp/en/research/brp/psr/data/psr240910e.pdf "Announcement")    Stella

It explores the opportunity for DLT to improve financial market infrastructure to support payment and securities settlement.

Bank of Japan

   RESEARCH   —   [announce →](https://www.boj.or.jp/en/announcements/release_2020/data/rel201009e1.pdf%0D%0Ahttps://www.boj.or.jp/en/announcements/release_2020/data/rel200212a1.pdf%0D%0Ahttps://www.tbstat.com/wp/uploads/2020/08/KPMG-CBDC-Report.FINAL_.v.1.02.pdf "Announcement")

 programs 2

## Connected to the world?

Long story short: EXCELLENT.
**Japan** is wired straight into the global money grid: **9/11** of the services we track work here.

*Stripe* onboards you, so you can charge cards from a laptop the day you land. *Amazon* delivers to your door like it would in Paris or Berlin. Wise, Revolut, PayPal: pick your rails, they all run.

**Accept payments — 4/6 available**

| Item | Status | Detail |
| --- | --- | --- |
| Stripe | Available | card payments |
| PayPal | Available | wallet payments |
| Adyen | Available | enterprise psp |
| Mollie | Not available | eu payments |
| GoCardless | Not available | direct debit |
| Paddle | Available | merchant of record |

**Bank and move money — 3/3 available**

| Item | Status | Detail |
| --- | --- | --- |
| Wise | Available | multi-currency |
| Revolut | Available | personal banking |
| Revolut Business | Available | business banking |

**Buy and sell on Amazon — 2/2 available**

| Item | Status | Detail |
| --- | --- | --- |
| Amazon | Available | consumer delivery |
| Amazon Seller | Available | marketplace selling |

  SEE ALSO## Other jurisdictions worth comparing

Picked by similarity of strategic profile to Japan. No editorial ranking — neighbours in the same scoring space.

  PROFILE-ADJACENT Same shape, comparable overall friction.

 [   Thailand TH  → ](https://stateless.sx/en/country/th) [   Nigeria NG  → ](https://stateless.sx/en/country/ng) [   Malawi MW  → ](https://stateless.sx/en/country/mw)

  NOTABLY MORE FAVORABLE Same family of strategies, higher total score.

 [   Guatemala GT  → ](https://stateless.sx/en/country/gt) [   Paraguay PY  → ](https://stateless.sx/en/country/py) [   Singapore SG  → ](https://stateless.sx/en/country/sg)

  NOTABLY LESS FAVORABLE Same family of strategies, lower total score.

 [   Panama PA  → ](https://stateless.sx/en/country/pa) [   Honduras HN  → ](https://stateless.sx/en/country/hn) [   St. Helena SH  → ](https://stateless.sx/en/country/sh)