How I Started a Company in Japan

My sustainable J-beauty brand, [EDO BEAUTY LAB] is officially one month old! I’m still in the process of developing my ecommerce marketing strategy, and have branched out into other social media like Pinterest, Twitter, and TikTok. In fact, about 2 weeks ago, I started a TikTok account. My first video, “I used to teach kindergarten in Japan,” has already reached 15,000 views. It’s still generating traction and I receive comments nearly everyday, many about how I started a company in Japan. 

I released a follow-up TikTok; however,  there’s only so much you can pack into a 30 second video clip. This post is a detailed follow-up chronicling my start-up journey. 

If you’ve been thinking about starting a company in Japan, then perhaps this blog post is your calling to take action! 

How I Started a Company in Japan

I suppose before I get into how I started a company in Japan, I should probably get into the why

Well, to be honest, I didn’t have much of a choice after my former employer offered me a “zero-hour” work contract for the April 2020-March 2021school year.

It was too late to look for teaching positions as the decision came during the last week of March. Without my kindergarten teaching job, I no longer had daycare. Again, it was too late to apply for public daycare, and I couldn’t afford private daycare without a full-time job. (Read more about that experience here: An Unfiltered Look at Working Mom Life in Japan.)

Meanwhile, my daughter couldn’t understand why she wasn’t going to school to be with her friends and teachers.

Long story short, I spent the first 3 months of “lockdown” homeschooling my daughter and wallowing in embarrassment and anger. 

However, things changed when I shifted my focus into blogging. One day when reviewing my blog analytics, I discovered that my monthly page views for May 2020 doubled to nearly 10,000. Then, my page views from June almost hit 20,000. This was all through posts on The Beauty Files!

In fact, by the end of the summer 2020, The Wagamama Diaries was at almost 40,000 monthly page views, mostly due to my posts about Japanese whitening products and the Japanese anti-aging skincare routine. 

And, then, one day in July, I saw an advertisement for the 16th Annual Edogawa Business Plan Contest

I like skincare, and my skincare related blog posts were doing extremely well. So, I naturally got to work brainstorming beauty-related business.

Eventually, I came up with the idea of creating a farm-to-face skincare line using locally grown ingredients. In our case, komatsuna (a superfood native to Edogawa City).

To my surprise, I placed third in the contest!

(My prize was an award of 100,000 yen, which has yet to reach my bank account because… Japanese bureaucracy, that’s why!)

Now that you know the background behind [EDO BEAUTY LAB], it’s time to get into HOW I started a business in Japan. 

Using the judges’  feedback from the 16th Annual Edogawa Business Plan Contest, I reworked my business plan.

I also attended a 6 course business seminar hosted by Edogawa City. (This business seminar cost 10,000 yen, yet it allowed me to reduce my business registration fees by half!)

I began formulating our signature product, Green Radiance Clay Mask, and began looking for a manufacturer.

BUT

There was one MASSIVE roadblock.

Every ingredient in any cosmetics made/sold in Japan must have 2 things: an INCI name and a JICA name.  

Komatsuna had neither, so I hired a legal professional to help me register both. Without it, I couldn’t continue on with [EDO BEAUTY LAB] 

(The entire application process took 6 months! ) 

Once I had an INCI & JICA name, it was time to find a cosmetics OEM company (a 3rd part manufacturer) to make the Green Radiance Clay Mask.

Side note: Basically in Japan, only licensed manufacturers can make cosmetics (化粧品 | keshouhin). You simply can’t create a beauty serum, or bar of soap, etc in your home and put it on the market. Check out this Instagram post about 5 surprising regulations in the Japanese cosmetics industry.  

Luckily for me, I found a cosmetics OEM company… and they were located here in Edogawa City. 

Next up was finding a manufacturer for our tenugui towels and an artist to design its print. Again, all I had to do was look within the borders of Edogawa City! As for the artist, I came across Ace Rivera’s work on Instagram, and immediately knew I wanted to work with him.

The next step was to formally register EDO BEAUTY LAB as a company.

You have several options for registering a company in Japan: 

  1. Be a sole proprietor (個人事業)
  2. Create a godou gaisha (合同会社)
  3. Create a kabushiki gaisha  ( 株式会社)

Since the business seminar certificate was basically a 50% off coupon, I went with the kabushiki gaisha option and used my “savings” of 75,000 yen to get legal help. 

First, I needed an official business address, so I rented an office. 

According to Japanese cosmetics industry regulations, the name and address of the manufacturer/distributor must be clearly displayed on the product label. On top of that, business registers are public information. Renting an office seemed like the most reasonable choice.

I also need to make stamps for my company (邦人印鑑 | houjin inkan), a necessity for all the paperwork. (I completely forgot to add this in my TikTok video!)

Once my company was officially registered, it was time to get a business bank account. I ended up using a local credit union. (More accurately, a credit treasury or “shinkin kinkou” | 信用金庫) 

Oddly enough, I didn’t have luck with Rakuten. However, they graciously accepted my business credit card application. Go figure.  

Soon, it was time to do paperwork at two different tax offices. (The first one is the Edogawa City tax office and the other is the Edogawa branch of the Tokyo tax office). To be very honest, I did that part before finding a tax accountant, though the staff at the tax office were very helpful with all my questions!

Next, I needed to apply for health insurance and re-enroll in the pension scheme as an employee* of EDO BEAUTY LAB. My company is responsible for paying half of the monthly premiums (based on my monthly income) and the other half is deducted from my salary. 

*Weird thing I need to point out here. I’m technically not an “employee” but rather a yakuin (役員) a board member/a company officer… My official title is representative director“ (代表取締役 | daihyou torishimariyaku). Want to know something even crazier? Because I’m not an employee, my monthly salary is fixed for one year and cannot be changed!.

While all of this paperwork was going on, I needed to work on product photography. I also worked on the website, ordered supplies, and labeled products. 

It was almost time to start spreading the word about my farm-to-face superfood skincare.

Well… not quite. 

Though I had July 1 as my official start date on my tax documents, my product launch was delayed. 

Production for the Green Radiance Clay Mask took longer than expected due to rules and regulations. 

First, I had to change the name to meet industry standards.

Then, before production could even begin, I had to register the product name and its ingredients. This took about 2 months, whereas the actual production of the Green Clay Mask only took 1 week.

Overall, the entire process took one year,and nearly 1,000,000 yen in INCI/JCIA application fees, company registration fees, lawyer fees, share capital, & office rental fees.

Somehow it all came together, and here we are! 

Your Japan start-up journey probably won’t look anything like mine, but I hope that this post has given you enough insight on how to start a company in Japan.

Before I end this post, here are some valuable resources to consider:

  1. City Hall: If you’re keen to start  a company in Japan, the first place to look is your local city hall. It’s a wonderful resource to use when looking for information on funding, loans, and seminars, and programs for entrepreneurs.
  2. Tax Offices: You know the saying — only 2 things in life are certain: death and taxes. Go straight to the tax office with all your questions.
  3. Books: It’s nice to have everything at your fingertips when you use a search engine, but too much information can be overwhelming. I used this book, (株式会社のつくり方と運営) which the staff at city hall used as a reference.

For more on how to start a company in Japan, be sure to check out the BTS highlight over on the Edo Beauty Lab Instagram. I’ll also be sharing more videos on TikTok about the process and answering questions over there!

How I Started a Company in Japan

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