Tokyo --a city of neon dreams and endless tax categories.
If you're thinking of starting a business in Tokyo -especially an e-commerce venture-, you're diving headfirst into one of the world’s most fascinating markets! Here, ancient traditions meet cutting-edge tech --and internet articles talking about how to get started are filled with generic hooks like the one you just read. We're not saying they're wrong though; Tokyo can be both dazzlingly modern and hilariously stuck in the fax-machine era.
The allure of Tokyo is undeniable, but it comes with challenges: paperwork that rivals the plot twists in a long-running anime, logistics that require Nobunaga-level strategy, and taxes designed to make your bi-lingual accountant cry quietly into their sake at the girls bar they frequent after work.
But fear not, random internet person! We’ve got your back with this guide to navigating Tokyo’s business maze --complete with tips, resources, and just enough humor to keep you from losing what little humanity you have left.
1. Do You Need to Register a Company?
He sees you when you're sleeping. He knows when you're awake. He knows if you've been making more than ￥1,000,000 a year or not, so be good for goodness sake.
Not every e-commerce business needs to register a company right away. But how do you know if it’s time to "go legit"? Here’s how to tell:
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You’re Making Bank: If your personal income (a.k.a. what’s left after expenses) is more than ¥1,000,000 a year, the taxman wants to know. You can stay as a sole proprietor for now, but if your business revenue crosses ¥10,000,000 a year, congratulations! You’ve unlocked the “charge consumption tax” level—formal registration at this point isn’t just smart; it’s survival.
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You Want to Look Professional: Platforms like Rakuten and Yahoo! Shopping won’t even consider you unless you’re a registered business. And let’s be honest: showing up with your official business name and shiny inkan stamp (we'll talk more about that later) beats “freelance seller from my bedroom” any day when dealing with Japanese suppliers.
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You’re Handling More Complexity: Thinking of hiring employees? Opening a business bank account? Handling payments so large they make your personal account sweat? Registering a business protects your personal savings from any 'financial oopsies' and keeps things professional.
If you’re just dipping your toes into the e-commerce pool or making pocket change, you can hold off on registering your business. But if your business starts growing fast, you're probably going to want to make things official.
2. (If Needed) Register Your Business
Awww yeah. This is what it's all about.
Here’s where the adventure really begins; and like any good adventure, you're about to experience incomprehensible pain and suffering! To operate legally in Japan, you’ll need:
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Business Registration: File the required paperwork with the Legal Affairs Bureau to officially establish your company. It’s straightforward but detail-heavy, but there's services out there that can do the filing for you (depending on the complexitygenerally for about 80000yen to 300000yen)
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Inkan (Seal): Japan relies heavily on personal or company seals for official documents. You’ll need one, so get it made --IT'S LITERALLY A REQUIREMENT, not a "nice-to-have". We're serious.
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Business Bank Account: Open a business account to handle transactions. Major banks like MUFG or SMBC are reliable options, or you can opt for online services like SBI for convenience. WISE is great if you're planning on doing a lot of international transactions.
Helpful Resource: The Tokyo One-Stop Business Establishment Center provides multilingual assistance to simplify the process. It’s worth taking advantage of their support.
3. Choose Your Platform
When you start manifesting your spirit animal; shopping carts.
First things first: are you selling online? If so, you'll have to decide platform will host your Tokyo-based business empire? Some options include:
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Rakuten: Japan’s e-commerce juggernaut with loyal customers who love its rewards points. Their marketplace has incredible reach, but it’s expensive for new businesses to list on --and you’ll need to already have a registered business to sign up.
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Amazon Japan: Efficient, somewhat straightforward, and tied to Amazon’s global infrastructure. Setting up an account is relatively quick, and unlike Rakuten, a registered business isn’t mandatory (though highly recommended for legitimacy and smoother operations).
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Shopify: Perfect for those who want control over their storefront and global reach. Since Shopify lets you run your own store, you don’t need a registered business -at least to get started- but having one is often necessary for accepting electronic payments like PayPal or Stripe.
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Yahoo! Shopping: Yep, you read that right. Yahoo! is still very much relevant in Japan. It’s a heavy hitter in the local market, but like Rakuten, it generally requires you to have a registered business before you can join.
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Your Own Website: This is your most flexible option --build your store from scratch or use platforms like WordPress or Wix. A registered business isn’t mandatory for launching the site, but you’ll likely need one if you plan to use electronic payment gateways or sell at scale.
Pro tip: Research fees and customer bases for each platform. Rakuten users tend to be older and more family-oriented, while Amazon and Shopify attract a broader demographic.
4. Taxes: What You Need to Know Without Losing Your Mind
"Gimme death. No that's quite alright, I won't be changing my mind on this one. Death is definitely preferable."
Taxes in Japan require some untangling. Here’s a crash course:
- Consumption Tax (CT): The default rate is 10%, except for food and non-alcoholic beverages consumed off-site, which get a reduced rate of 8%. Selling instant ramen? 8%. Selling electronics? 10%.
- Corporate Tax: This varies based on your business income, but expect around 23.2% for most companies.
- Import Duties: If you’re bringing in goods from abroad, look up tariffs specific to your product category. The Japan Customs website has helpful calculators.
Pro tip: If you're buying or selling internationally, you'll want to hire a tax advisor fluent in both Japanese and international tax law, when you can. It's not going to be cheap.
5. Logistics: How to Get Stuff From Point A to Point B
One ship, Two ship, Red ship, Blue ship.
Efficient logistics are key to keeping customers happy. Tokyo’s logistics infrastructure is top-notch, so your options are plentiful:
- Third-Party Logistics (3PL): Companies like Mix-Mix Mail (ahem, that’s us) can manage storage, packing, and shipping for you. Perfect for newcomers or growing businesses.
- Own Warehouse: Larger operations may opt to rent warehouse space. Tokyo’s suburbs, like Saitama or Chiba, are great locations for cheaper storage.
- Local Couriers: Yamato (Kuroneko), Sagawa, and Japan Post are reliable for last-mile delivery. They also offer pickup services from your warehouse. There's some items they won't handle though, so make sure your products are OK before relying on them!
6. Localize or Die
"Imagine my customers are pre-Meiji era peasants --but that they're also able to read. That's how I want you to translate my site."
If you're planning on selling to Japanese customers, they probably won't want to read anything other than... Japanese.
- Language: Don’t exclusively trust Google Translate or ChatGPT with your product descriptions. Invest in a professional translator to make your website accessible in Japanese.
- Payment Methods: Offer Japan-specific options like Konbini payments (pay at convenience stores) and PayPay, alongside "pay on delivery" and accepting credit cards.
- Shipping Speed: Fast delivery is expected. Thanks to Tokyo’s excellent courier network, two-day shipping is standard for e-commerce stores.
Pro tip: Localization builds trust and encourages repeat business. Customers know when you’ve put in the effort.
7. Legal Compliance: Don’t Skip This
If you're ever taken to court for non-compliance of Japanese consumer protection laws, be ready for them to physically remove your heart and measure the weight of your soul against a feather. Yeah, they still do it old-school over here.
Japan is strict about consumer protection laws and data privacy. Here are a few key regulations:
- Consumer Contract Act: Sets rules about refund policies and transparency.
- Act on Protection of Personal Information (APPI): Japan’s version of GDPR. Ensure you’re collecting, storing, and processing data securely.
Breaking these laws isn’t just bad for business—it’s embarrassing. And in Japan, avoiding shame is practically a national sport.
8. Keep Learning (and Networking)
The best way to do business networking as an introvert is to fool everyone (yourself included) into believing you're actually an extrovert!
The Tokyo e-commerce scene evolves constantly. Stay ahead by:
- Attending workshops at places like the ones at the Tokyo Small Business Development Center.
- Attending networking events like the ones that TOSBEC (Tokyo One-Stop Business Establishment Center) regularly hosts.
- Dropping by some of the business expos that are regularly held at Tokyo Big Site.
- Joining networking groups like Tokyo E-Commerce Meetup.
Overwhelmed by inventory, fulfillment, or logistics in Tokyo? That's exactly what we (Mix-Mix Mail) are here for! Being the glowing fulfillment center / 3PL that we are, we’ll handle all the storage, packing, and shipping of your products so you can focus on the fun parts of running a business --like pretending to be productive while obsessing over your latest sales stats!