The most common form of Japanese corporations appears to be either a joint-stock company or an LLC. We would like to start out as an LLC, which is the most cost-effective, and then switch to a joint-stock company after our business gets off the ground. Is this possible?

Yes, you can switch from an LLC to a joint-stock company by preparing an entry conversion plan with the consent of all members of the LLC and applying for registration of alternation with the legal affairs bureau. In doing so, you are required to pay the legal affairs bureau a registration and license tax of 60,000 yen. In addition, if you ask a tax accountant to submit notifications to the tax office and the metropolitan tax office, a tax accountant fee of several tens of thousands of yen is required.

Thus, the costs for organization conversion itself are not very high. However, relevant notifications and procedures for alternation can be fairly time-consuming. For example, you may be required to change the name on the office lease agreement, check whether you need to re-obtain a permit or license for your restaurant, and/or file a notification to change the organization on the residence cards of your foreign national employees.

Additionally, editing your website, preparing printed materials such as envelopes, and re-creating your seal may be required, which may unexpectedly take so much work. So, note that you may see a heavy workload associated with the organization conversion.