Kabushiki Kaisha (KK) or Godo Kaisha (GK) – Which One Should You Choose?

Kabushiki Kaisha (KK) or Godo Kaisha (GK)
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Kabushiki Kaisha (KK) or Godo Kaisha (GK) – Which One Should You Choose?

When setting up a company in Japan, it is essential that you understand the advantages as well as the limitations of each kind of business. Kabushiki Kaisha (KK) or Godo Kaisha (GK) – Which One Should You Choose? The most popular types are the Kabushiki Kaisha (abbreviated as the KK) and the Godo Kaisha. This article breaks down the main aspects of these two types of businesses.

The Kabuki Kaisha (KK) Structure

Also known as a joint-stock company, the Kabuki Kaisha is more or less similar to a C Corp in the U.S. . It is the most common type of business throughout Japan and has quite the street cred! Making it a huge hit among customers, business partners, and employees.

With a KK business structure, you can scale the ops! This means you may set up a board of directors, raise additional capital and sell shares. And if you are dreaming for the big leagues…..list on Japanese Stock Exchanges. It’s usually more expensive to set up, but many find it worth the investment.

With the Kabuki Kaisha type, you can see clear differences between the management (the directors) and the ownership (shareholders). In contrast to GK companies, while shareholders do have ownership for parts of the company, they are not necessarily given management rights.

Godo Kaisha (GK) Structure

In comparison to the KK structure, the registration for the GK is not as complicated and a bit cheaper to setup. Moreover, while with a KK company you’ll have to hold shareholder meetings, submit Articles of Incorporation and other reports, it is not the case with a GK company.

With that in mind, the GK type is relatively new. Since it was only established in 2006, it does not have the same kind of recognition as a KK just yet. This means you might need to put additional sweat equity to convince others that you are a reputable organization. That said, the GK is slowly gaining ground especially in certain hot spots like Tokyo and resort areas such as Hakuba and Niseko due to favorable tax structures for foreign owners (if setup properly).

The Bottom Line

Both types have their advantages and drawbacks. Which is why you need to decide which one works best for you. It’s best you speak to a professional before making a decision.

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Eric La CaraManaging Partner and Tax Practice manager for Capital Tax in Vancouver and Tokyo. Eric is a U.S. and Japan Personal & Corporate tax specialist with more than 15 years of experience in the area of cross-border structuring and taxation. Eric is charged with developing Capital Tax overall operations and strategic direction using the business and technical skills he has acquired during his professional career in Asia.