Hold it personally or through a company? There are broadly two ways to hold income property in Japan — personally, or through a company. Tax rate, expenses, loss carry-forward, succession and fit with the Business Manager visa all change, so you choose by scale and goal.
Personal vs company holding — what differs?
| Item | Personal | Company (gōdō / kabushiki-gaisha) |
|---|---|---|
| Tax on income | Income tax (progressive 5–45%) + resident tax | Corporate tax (SME reduced 15% up to ¥8M, 23.2% above; effective rate with local tax ~low-30s% as a guide) |
| Gain on sale | Capital-gains tax (~20.315% long-term) | Taxed as company income (corporate tax) |
| Setup / running cost | None | Incorporation (gōdō ~¥60k+, kabushiki ~¥150k+) + flat resident-tax levy (~¥70k/yr even at a loss) |
| Range of expenses | Limited | Broad expenses, incl. director remuneration |
| Loss carry-forward | Up to 3 years (blue return) | Up to 10 years |
| Succession | Inherit the property itself (inheritance tax) | Inherit / gift shares (often easier to split & value) |
| Business Manager visa | Not directly possible | A company is the premise — can be the visa vehicle |
※Rates, deductions and costs are a guide and change with rules and circumstances. Confirm the final tax and which is advantageous with a tax accountant and the National Tax Agency.
When personal holding suits
- A home, or a small one-to-few-unit live-and-rent — income is not large.
- You want to avoid the effort and cost of incorporation and filings.
- No near-term plan to sell or to obtain a visa.
When company holding suits
- You run rental / lodging at scale as a business, with large income.
- You want to use director pay, expenses and the 10-year loss carry-forward to smooth tax.
- You want to pass it to family as shares.
- You aim for the Business Manager visa — since it presupposes a company, company holding fits naturally.
If you aim for the Business Manager visa, use a company
The Business Manager visa (status "Business/Manager") is for those who set up and run a company. So an overseas owner with the visa in view naturally holds and runs the income property through a company. But "buy a property and get the visa" is a myth — see the Business Manager visa & real estate.
What overseas owners arrange
- Company + office — incorporate a gōdō / kabushiki-gaisha and secure independent premises.
- Tax agent — a non-resident registers a tax agent with the tax office.
- Specialists — tax accountant (tax & exit), judicial scrivener (registration), immigration scrivener (visa).
- Remote building — proceed without flying in via remote construction management.
Towa's role, and common myths
Holding structure, tax and the visa belong to a tax accountant / scrivener. As a builder, we design and build the income asset — rental, hotel, etc. — that becomes the vehicle, working alongside trusted specialists.
| Common myth | The correct view / fix |
|---|---|
| “A company is always cheaper” | Setup, running cost and the flat levy mean it depends on scale/income |
| “I can get the visa as an individual” | The visa presupposes a company; personal holding can't |
| “A company means one low flat rate” | SME reduction & effective rate vary with income — model it |
| “I can move to a company later, easily” | Personal→company transfer triggers registration / transfer cost |
| “The builder also arranges the visa” | We build; the scrivener / accountant handle visa & tax |
There is no single right answer — it turns on scale, income, the exit (sale), succession and whether a visa is in play. This article is general information; consult a tax accountant / scrivener on the optimal structure and tax. Planning and rough costing of the building that becomes the vehicle are free to discuss.
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