Some Japanese business owners might consider starting businesses or incorporating businesses in the US. The US offers a large market, abundant opportunities for raising capital, and an environment that facilitates transactions and financial management in US dollars (USD). Since it is possible to incorporate a business in the US while living in Japan, establishing a business there is a strong option for entrepreneurs and business owners looking to expand overseas.

With increased support by the government for startups, many Japanese businesses are considering launching new ventures or expanding into overseas markets. According to the Ministry of Economy, Trade and Industry, the direct economic impact of Japanese startups on gross domestic product (GDP) in 2025 totaled ¥13.66 trillion. When indirect effects are included, the total GDP generated increased by 15% compared to the previous year.

In this context, businesses that want to do business in Japan and expand overseas to larger markets and more funding opportunities need to consider the US market. However, it’s important to keep in mind that in the US, tax implications, costs, and required procedures vary depending on the type of business entity and its state of incorporation.

In this article, we explain the benefits of incorporating a business in the US, differences between various corporate structures, advantages of different states of incorporation, associated costs, and important considerations.

Key takeaways

• While it is possible to establish a US corporation while living in Japan, it’s important to choose a corporate structure that aligns with business objectives. For example, a C corporation (C corp) is suitable for a business owner looking to raise capital or pursue an initial public offering (IPO), while a limited liability company (LLC) is better for prioritizing operational flexibility.
  
• US states—such as Delaware and Wyoming—are often chosen as locations for incorporation because of their well-established legal systems and low maintenance costs.
  
• After incorporating the business, the next steps are obtaining an Employer Identification Number (EIN), applying for a bank account, and setting up a payment processing system.
  
• If conducting business in the US, it is important to incorporate the business and verify that the business owner has the appropriate visa or work authorization based on the nature of the business’s activities.
  

Reasons to start a business in the US from Japan

The US has a large market and abundant opportunities for raising funds. Below, we outline the main reasons why Japanese businesses establish US corporations.

Exchange rates and currency conversion

When a Japanese corporation receives revenue in USD from US customers, it is subject to the effects of exchange rate fluctuations when converting the amount to Japanese yen. Currency conversion fees can also apply.

For example, if a business receives revenue in USD and also makes payments in USD for cloud services, advertising costs, and purchases, it must first convert the revenue to Japanese yen and then convert it back to USD. This results in multiple currency conversions.

On the other hand, by establishing a US subsidiary and managing a portion of revenue and expenses in USD, the business owner can reduce unnecessary currency conversions and mitigate the impacts of exchange rate risk and foreign exchange costs.

Large-scale capital markets

The US has one of the world’s leading venture capital (VC) markets, which offers a wide range of funding opportunities for startups and growing businesses.

For businesses that want to raise capital from outside investors, incorporating in the US can expand their options. For businesses that plan to seek VC funding or be listed on the stock exchange in the future, it is also important to choose a corporate structure and state of incorporation that are familiar to investors.

Corporate structures that suit business goals

In the US, businesses can choose the corporate structure that best suits their objectives and operating policies. The C corporation (C corp) and limited liability company (LLC) are the best known structures, but there are also other options.

The most appropriate corporate structure depends on whether the business’s focus is on raising external capital or being listed on the stock market in the future. The focus might also be on maintaining a relatively simple operational structure. Because the taxation and administrative requirements differ, business owners need to choose the structure that best suits their business plans.

Ability to start online from Japan

In the US, business owners can complete many steps of the process online or by mail, such as incorporating a business in a US state or getting an Employer Identification Number (EIN). This means that business owners can start businesses or establish corporations while living in Japan, without traveling to the US.

Keep in mind that establishing and owning a corporation is different from working or residing in the US. To actually work in the US, business owners must take separate steps to verify visa and immigration status.

Choosing a US corporation type

When establishing a business in the US, it’s important to choose the corporation type based on factors such as the scale of the business, funding plans, tax considerations, and administrative burdens. The most common corporation types are C corps and LLCs.

C corp

A C corp is a legal entity where the business and its shareholders are legally separate. Because this formation allows businesses to issue shares, it can be easier to raise funds from external investors, such as VC firms. C corps are widely used by startups aiming for future public listings on the stock market.

On the other hand, taxes are imposed on corporate profits and can be applied to shareholders who receive dividends. This can result in double taxation. Compared to an LLC, C corps tend to have more administrative procedures, such as board of directors meetings and shareholder meetings.

LLC

An LLC is a business structure that offers limited liability while allowing for relatively flexible operations. From a tax perspective, it generally follows a pass-through taxation system. Profits and losses are attributed directly to the owners, which offers the advantage of avoiding taxation at the corporate level.

Furthermore, compared to a C corp, there are fewer formal procedures involved in running an LLC. This makes it a convenient option for small businesses and those operated by small teams. However, if the owner is a non-US resident, taxes can become complex. Therefore, it is advisable to consult with a professional before forming an LLC.

Selecting the state of incorporation

In the US, incorporation costs, annual maintenance fees, state taxes, and other expenses vary depending on the state of incorporation. Instead of choosing based on name recognition, it is important to choose the state of incorporation based on factors such as the location of business operations, funding plans, and operating costs.

Delaware: A popular choice for incorporation

Many businesses—both domestic and international—choose Delaware as a place to incorporate. According to the state government, more than two million businesses have their legal headquarters in Delaware, and more than 66% of Fortune 500 companies have chosen the state as their home.

One reason is that Delaware’s legal framework that governs corporate legal affairs is well established. Delaware’s Court of Chancery specializes in corporate law and has a long history of handling corporate law matters.

In addition, VC firms, investors, law firms, and others are familiar with the structures and systems associated with Delaware corporations. Therefore, businesses considering raising external capital or planning to be listed on the stock market in the future tend to choose this option.

Wyoming: Low cost and easy to start

In Wyoming, it is relatively easy to experience low costs for incorporation and business maintenance. There is no state corporate income tax, and annual operating costs are relatively low. Therefore, Wyoming is often used as a location for establishing small businesses or businesses operated by small teams.

It is important to note that businesses incorporated in Wyoming can be required to complete additional registration and tax procedures if business is conducted in another state. When deciding on the state of incorporation, it is important to consider startup costs and the location where business will actually be conducted.

What to consider when choosing a US state of incorporation from Japan

Business owners living in Japan and conducting business online with customers throughout the US that do not maintain physical locations—such as offices or employees in the US—are not restricted to a specific state of residence. They have more freedom in selecting the state of incorporation.

On the other hand, if a corporation conducts ongoing business in a state other than the one where it is registered (e.g., establishing an office, hiring employees, or setting up a warehouse in a specific state after incorporation), it must register in that other state to obtain foreign qualification.

When choosing the state of incorporation, the decision needs to be based on costs, considerations for raising capital, and future plans for establishing a presence within the US.

Steps for incorporating a business in the US from Japan

As outlined by the Japan External Trade Organization (JETRO), when establishing a business in the US, business owners in Japan must decide on the corporate structure and state of incorporation. Then, they move forward with other necessary procedures, such as corporate registration, obtaining an EIN, and applying for a bank account.

Procedures vary depending on the state, structure, and organization of the business. Therefore, it is important to check the latest information for the state of incorporation.

Choose corporate structure and state of incorporation

First, choose the corporate structure, which could be a C corp, LLC, or other form. This decision can be based on factors such as business activities, funding plans, tax considerations, and administrative burdens.

Review the corporate laws and tax systems that will apply for the state or location of business activities to determine the best state of incorporation.

Prepare corporate registration and obtain an EIN

Once the business owner has chosen the state of incorporation, the next step is to prepare the articles of incorporation or articles of organization and file them with the Secretary of State. The application process and fees differ from state to state. Check for the latest information before getting started.

After incorporating, apply to the Internal Revenue Service (IRS) to obtain an EIN. The EIN is a number used for filing tax returns and applying for corporate bank accounts, among other purposes.

Check visa and work authorization status

Some business owners simply establish and own US corporations while still living in Japan. They do not immediately need visas to work in the US. On the other hand, those who actually travel to the US to work must have visas or work authorizations that are appropriate for the nature of the business activities.

When a Japanese business sends an employee to work in a US subsidiary, the most common visa types are nonimmigrant visas, including the E, L, J, and H visas. Keep in mind that the visa application process is separate from the process of incorporating a business. Therefore, those who plan to work in the US need to pursue visa applications in parallel with incorporation processes.

Apply for a bank account

After obtaining an EIN, apply for a corporate bank account at a US financial institution. Bank accounts are used for managing a corporation’s funds, such as receiving revenue and paying business expenses.

Opening an account involves identity verification and a screening process by the financial institution. The required documents and procedures vary by institution.

Implement a payment system

After incorporating a business and setting up a bank account for it, it is important to establish a payment system to receive payments from customers.

When offering products or services online—such as through ecommerce sites or software-as-a-service (SaaS)—set up the infrastructure needed to start selling by implementing a payment service that supports multiple payment methods, including credit cards.

US incorporation fees

The costs associated with incorporating in the US vary depending on the state, corporate structure, and services used. The main costs are state registration fees, fees for a registration agent, and post-incorporation annual reports and state taxes.

State registration fees

Business owners are charged a registration fee when they submit the incorporation documents to the state regulatory agency. The exact amount of the fees varies by state and corporate structure. Additional fees apply for expedited processing of documents or the issuance of certificates.

Other fees

In addition to state registration fees, there are also costs for retaining a registered agent, consulting with professionals, and using bank accounts and various services.

Those who apply directly with the IRS are not charged a fee for obtaining an EIN. However, business owners that use proxy services or third-party agencies can be charged service fees to obtain EINs.

Key points when incorporating a business in the US from Japan

When incorporating a business in the US, it is important to review tax matters and the ongoing procedures required after incorporation.

Risk of double taxation

For C corps, corporate income tax is levied on the business’s profits. If those profits are distributed to shareholders as dividends, the shareholders can also be taxed. According to both the IRS and JETRO, a C corp and its shareholders are separate taxable entities. This results in double taxation when profits are distributed as dividends.

Business owners that own and operate US corporations while living in Japan need to confirm how both Japanese and US taxes will be handled. There is currently a tax treaty between Japan and the US that provides mechanisms to address international double taxation on the same income. However, the details of how this is handled vary depending on factors such as the type of business entity and type of income.

Therefore, when incorporating a business in the US, it is particularly important to consult with experts—such as tax accountants—to understand the US tax system and clarify tax obligations in Japan.

Ongoing work after incorporation

After incorporating in the US, ongoing expenses—such as filing annual reports and paying franchise taxes—arise on a state-by-state basis.

For example, under Delaware’s corporate tax laws, C corps are subject to annual reporting requirements and franchise taxes. LLCs are subject to annual state taxes. In addition, there are ongoing responsibilities after incorporation, such as maintaining a registered agent and filing tax returns.

Depending on the nature of the business and its location, obtaining or renewing a business license or completing additional tax registrations can also be required. The required procedures and deadlines vary by state, so it is important to check for the latest information regularly.

How Stripe Atlas can help

Stripe Atlas handles everything you need to legally launch your company—incorporation, employer identification number (EIN), equity setup, and tax filings—so you can fundraise, open a bank account, and start accepting payments in as little as two business days, from anywhere in the world.

Join 100,000+ startups incorporated using Atlas, including startups backed by top investors like Y Combinator, a16z, and General Catalyst.

Get started in minutes with Atlas

The application takes under 10 minutes. You’ll choose your company structure, confirm your name is available, add up to four cofounders, set your equity split, and e-sign. Then Atlas takes it from there, including notifying cofounders to sign their documents electronically.

Banking and payments before your EIN arrives

Atlas files your EIN application automatically after incorporation. You don’t have to wait—Atlas enables pre-EIN payments and banking so you can start accepting payments and making transactions right away. US founders with a Social Security number are typically eligible for expedited IRS processing.

Automatic 83(b) tax election filing

Atlas files your 83(b) election for you—US and non-US founders alike—with US Postal Service certified mail and tracking to reduce personal income taxes. You’ll get a signed 83(b) election and proof of filing directly in your Stripe Dashboard, with certified mail confirmation.

World-class company legal documents

Atlas provides all the legal documents you need to start running your company, drafted by Cooley, one of the world’s leading venture capital law firms, and stores them directly in your Stripe Dashboard. These documents are designed to help you fundraise immediately and ensure your company is legally protected, covering aspects like ownership structure, equity distribution, and tax compliance.

$2,500 in Stripe credits, plus $50K+ in partner discounts

Atlas startups get $2,500 in Stripe product credits for their first year, plus $50,000+ in discounts on essential tools—AWS, Google, Xero, Perplexity, and more. Delaware registered agent service is also included free for your first year.

Learn more about how Atlas can help you set up your new business quickly and easily, and get started today.

FAQs about starting a business in the US from Japan