Setting Up A Subsidiary Or JV In Japan: Comparison Of The Kabushiki Kaisha And Godo Kaisha Structures

This article provides a brief comparison of KK and GK, from the perspective of an Indian Company investing in Japan

Until recently, when speaking about the economic relationship between India and Japan, conversation would likely focus on investment by Japanese entities (e.g. manufacturers, trading companies, or private equity) into India. In recent years, however, investments by India-based companies in Japan, such as establishment of subsidiaries or joint ventures with Japanese counterparties, have increased. For example, Softbank, a large shareholder of OYO (India’s largest hospitality company), published a press release on 4 April, 2019 stating that they had established a joint venture with OYO Hotels & Homes in order to conduct hotel business in Japan.

A number of different structures are available for incorporating a new company in order to start a business in Japan. The most common structures are the Kabushiki Kaisha, commonly referred to as a “KK,” and the Godo Kaisha, commonly referred to as a “GK.” Both KK and GK are governed by the Japanese Companies Act. This article provides a brief comparison of KK and GK, from the perspective of an Indian Company investing into Japan.

2 Comparison of Kabushiki Kaisha and Godo Kaisha

1) Basic Concept