Setting up an AI company in Japan (2026): A detailed guide

Japan is facing one of the biggest challenges of the 21st century: a rapidly aging population and a shrinking workforce. This is a national problem that Japanese businesses, government and society must find a way to solve.

In that context, AI has become a strategic solution to automate, optimize processes and reduce dependence on traditional human resources. This urgent need has opened up a large market for international technology companies.

Japan is globally renowned for its strengths in robotics, IoT, and smart manufacturing. Its tech ecosystem is increasingly integrating AI into areas such as manufacturing, finance, logistics, healthcare, and self-driving cars.

This is a favorable platform for international AI companies to cooperate, test and deploy products right in a highly applicable market.

The Japanese government has placed innovation and digital transformation at the heart of its economic development strategy. Many preferential policies, support funds and international cooperation programs have been implemented to attract foreign technology enterprises, especially in the field of AI. 

This helps international companies when opening branches or subsidiaries in Japan not only be welcomed but also have access to financial and research resources.

Japan is home to many of the world's leading corporations such as Panasonic, Rakuten, SoftBank, Toyota, Honda, etc. These are all business-to-business (B2B) customers with strong demand for AI applications in manufacturing, e-commerce, telecommunications, and financial services. 

For international AI companies, having a presence in Japan makes it easier to access global partners, expand business scale and affirm prestige in the Asian market.

anthropic, the famous American AI company with the Claude app, has officially announce plans opened its first Asian branch in Tokyo. The new office focuses on serving Japanese corporate customers and also cooperates with large corporations such as Panasonic and Rakuten Group to deploy products.

It can be said that this move not only helps Anthropic get closer to Japanese customers, but also affirms that Tokyo is becoming Anthropic's strategic "gateway" to penetrate deeper into the Asian market.

Before Anthropic, OpenAI – the name associated with ChatGPT – also took a similar step. In April 2024, OpenAI chose Tokyo as the location for its first office in Asia. Not only simply expanding its presence, OpenAI also revealed plans to “localize” the GPT model for Japanese – a move that shows its seriousness in this market.

Not staying out of the game, Microsoft – the American technology giant – also stepped up its investment with a $2,9 billion package in cloud computing infrastructure and GPUs in Japan. At the same time, the company also established the Microsoft Research Asia research center in Tokyo, focusing on pioneering areas such as embodied AI, social AI and neuroscience.

Microsoft's goal is clear: to bring AI from the lab into practice, accompanying Japanese businesses on their digital transformation journey.

Another bright spot is the SB OpenAI Japan joint venture, a collaboration between SoftBank and OpenAI. With an investment budget of up to billions of dollars per year, this joint venture not only provides AI solutions for the Japanese market, but also sends a strong message: Japan wants to play a central role in the Asian AI map.

Not only is Japan riding the international wave, it is also witnessing its own rise. Sakana AI, a startup founded by two former Google engineers in Tokyo, has reached a valuation of $1,5 billion just one year after its launch.

Sakana AI focuses on collective intelligence research, a different direction that demonstrates a very "Japanese" creative spirit: when AI is not just technology, but also a philosophy of connecting people.

Besides global corporations, Vietnamese enterprises are also asserting their position in the Japanese market:

• FPT Software: more than 20 years of presence, with thousands of employees and many AI projects for Japanese corporations.
• CMC Technology: open an office Third in Tokyo (2024), becoming a member of Keidanren – Japan’s leading economic organization.

Additionally, companies like NashTech, VSII are also entering the market with AI and digital transformation services.

Japan is one of the countries investing heavily in AI with many application areas: healthcare, automated manufacturing, finance, logistics, retail. The Japanese government and businesses are willing to spend large budgets to deploy AI solutions, opening up abundant cooperation opportunities for startups and international companies.

Big names like Sony, SoftBank, Rakuten, and Panasonic are always looking for technology partners to increase their competitiveness. New businesses can take advantage of this ecosystem to collaborate on research, product development, or expand distribution channels.

The Japanese government is promoting Digital Transformation (DX) and Society 5.0, with AI as the focus. Preferential policies on tax, research funds, and support for international startups help foreign businesses reduce risks and accelerate development.

Owning an office in Tokyo or Osaka – the two largest economic and technological centers in Japan – helps businesses enhance their reputation in the eyes of international partners, while easily attracting high-quality human resources in the technology industry.

A branch is a direct extension of a parent company overseas. Businesses can use the branch to conduct business, sign contracts, and provide AI services right in Japan.

• Advantages: Quick establishment procedures, lower operating costs compared to subsidiaries.
• Limitations: The parent company is directly legally and financially responsible for all activities of the branch.

A subsidiary is an independent legal entity, usually established as a Kabushiki Kaisha (KK) or Godo Kaisha (GK) in Japan. This is the form chosen by many large corporations in the AI ​​field for long-term development.

• Advantages: Independent legal entity, increased reputation with Japanese customers, easy to sign large contracts.
• Disadvantages: Requires charter capital, more complicated establishment and maintenance procedures.

Representative offices are suitable for new businesses exploring the market. These offices are not allowed to conduct revenue-generating business activities but only focus on research, surveys, marketing or communications.

• Advantages: Easy to set up, low cost.
• Restriction: No direct revenue generation in Japan.

This is a form of cooperation with a Japanese partner to establish a joint venture company. This model is suitable for AI businesses that want to take advantage of the resources, available customers, and local knowledge of the Japanese partner.

• Advantages: Cost savings, risk reduction, easy access to Japanese customer network.
• Limitations: Clear agreement on equity ratio, control rights and development strategy is required.

Yes. Japan allows foreign investors to own 100% of the company's capital. You can choose to establish Kabushiki Kaisha (KK) or Godo Kaisha (GK) without having to have Japanese shareholders or members.

AI companies often choose Kabushiki Kaisha (KK) because this type is highly regarded for its reputation, easy fundraising, and cooperation with large corporations. If you want simpler procedures and lower costs, Godo Kaisha (GK) is also a suitable choice.

Yes. The Japanese government and local governments such as Tokyo and Osaka often have programs to support AI and high-tech startups through:

• Tax breaks and financial assistance.
• Connect with venture capital funds and R&D centers.
• Business Manager Visa for foreign founders.

Contact GLA for advice and support on policies to support your business when establishing a company in Japan. 

Not required. Foreign companies can open branches or subsidiaries in Japan without a local partner. However, having a Japanese partner will help facilitate access to the local market, customers, and business networks.