Cap Table Software for Japan, Korea, and Taiwan Startups: One Region, Three Stock Option Rulebooks

There's no single "East Asia" cap table rulebook, because Japan, Korea, and Taiwan run equity compensation through three separate statutes with three different caps, and none of them look like Delaware. A Japanese startup deciding between a Godo Kaisha and a Kabushiki Kaisha is making a decision about whether it can issue stock at all. A Korean startup's option pool ceiling doubles once it earns venture-company certification. A Taiwanese founder can pay for shares with code instead of cash, but only inside a company type that didn't exist before 2015. Software built around a Delaware cap table treats all three as a rounding error.

Search "cap table software" from Tokyo, Seoul, or Taipei and the results are the same Carta-and-Pulley roundups everyone else gets, ranked by price and G2 stars. None mention a tax-qualified stock option's annual exercise cap, a venture-certification threshold, or a closely-held company's non-cash contribution rule — because none of those concepts exist inside the Delaware C-corp every one of those tools quietly assumes.

Japan: the entity choice comes before the option grant

Japanese startups typically incorporate as one of two entity types, and the choice determines whether equity compensation is even possible. A Godo Kaisha (GK) is cheaper to set up — no notarized articles, lighter governance — but it issues membership interests, not shares. It cannot grant stock options in the venture-capital sense and cannot be publicly traded. A Kabushiki Kaisha (KK) can do both, which is why founders who plan to raise institutional capital or grant employee equity convert to a KK before the first round closes, not after. The conversion itself is routine; treating it as an afterthought is the mistake.

Once a company is a KK, the next decision is whether its stock options qualify for Japan's tax-qualified (税制適格) treatment. A qualifying option defers all tax until the shares are sold, at which point the gain is taxed at roughly 20% as capital gains. Fail to qualify and the option is taxed as ordinary income at exercise — a rate that can exceed 40% — often before the employee has any liquidity to pay it. Qualification has strict conditions: the option must be held for a minimum period before exercise (extended to up to 15 years under the current rules, from 10 previously), the exercise price must be at or above fair value at grant, and there's an annual cap on how much can be exercised tax-deferred in a given year. That cap used to be a flat 12 million yen regardless of company age. Since Japan's April 2024 reform, it splits by company maturity: 24 million yen for companies under five years old, and 36 million yen for companies between five and twenty years old that are unlisted or have been listed less than five years. A cap table tool that doesn't track company incorporation date alongside each option grant can't tell an employee which ceiling applies to them.

Korea: the option pool ceiling depends on a certification, not just a statute

A Korean stock company (주식회사) can grant stock options (주식매수선택권) under the Commercial Act, but the ceiling is low: 10% of total issued and outstanding shares. Companies that hold official "venture company" certification under Korea's Venture Business Act get a materially larger pool — up to 50% of total issued and outstanding shares — because the certification is designed specifically to make equity compensation viable for capital-constrained startups competing for talent against Samsung and Naver-scale salaries.

That certification isn't permanent. It's assessed against criteria tied to R&D spending, venture-capital investment received, or technology evaluation, and it can be renewed, lapse, or be revoked. A cap table that hardcodes a 50% pool ceiling at setup and never revisits it will happily let a company over-grant the moment its venture-certified status lapses — a compliance gap a Delaware-native tool has no reason to even model, since nothing like it exists in US law.

Korea added a second instrument to the toolkit recently: an amendment to the Venture Business Act, effective July 10, 2024, lets venture-certified companies issue RSUs (성과조건부주식, "conditional shares") directly — shares granted at no cost on vesting, rather than a right to buy at a fixed price. It's a genuinely new lever, not a rebrand of the existing stock option, and any Korean startup weighing options against RSUs for a 2026 grant is choosing between two different statutes, not two flavors of the same one.

Taiwan: paying for shares without cash

The default Taiwanese entity for a VC-backed startup is an ordinary company limited by shares, and preferred-share terms for investors — liquidation preference, anti-dilution, board seats — work much like they do anywhere else. What's specific to Taiwan is a company type created by a 2015 amendment to the Company Act: the closely-held company limited by shares (閉鎖性股份有限公司), capped at 50 shareholders, with transfer restrictions written into the articles of incorporation.

Two features make it the default choice for early-stage Taiwanese founders. First, founders can pay for their shares with technology, know-how, services, or an extended credit line instead of cash — useful when the "capital" a co-founder is contributing is a patent or eighteen months of unpaid engineering work, not a wire transfer. Second, preferred shares can carry multiple votes, a single vote, or no vote at all, letting founders retain control disproportionate to their cash contribution in a way an ordinary company limited by shares doesn't straightforwardly allow. Neither feature exists in Carta's or Pulley's data model, because neither has a reason to.

The one thing that doesn't travel here: the Delaware flip

Every other region we've covered — MENA, Africa, Latin America, Turkey and Central Asia — eventually runs into the same move: flip to a Delaware C-corp because that's the only structure most US-led rounds will accept without a fight. Japan, Korea, and Taiwan are the exception, and it's worth naming why. All three have functioning local growth-stock markets — Tokyo's TSE Growth Market, KOSDAQ, and Taiwan's Taipei Exchange — so a domestic entity isn't a dead end the way it can be in a market with no local IPO path. A flip still happens when a specific US fund makes a Delaware entity a term of the deal, but it's a negotiated exception here, not the default architecture every founder is quietly told to expect.

That doesn't make the entities simpler to run. Each of the three carries its own statutory shareholders' meeting obligation, and the deadlines don't match: a Japanese KK must hold its ordinary general meeting within three months of fiscal year-end (Companies Act Article 296), a Taiwanese closely-held or ordinary company within six months, and a Korean stock company on a timeline set by its own articles of incorporation rather than a fixed statutory deadline. A governance module built only around a Delaware board consent has no concept of any of the three.

Where Govy fits — and where it honestly doesn't yet

Govy's ESOP module already supports multiple instrument types — stock options, RSUs, SARs, phantom shares — which maps conceptually onto Japan's options, Korea's options-and-RSU split, and Taiwan's options-based grants without forcing every market into one instrument shape. The general assembly module — convening meetings, computing shareholding-weighted quorum, recording minutes — is built for exactly the kind of statutory annual meeting obligation a KK, a Korean stock company, and a Taiwanese closely-held company each carry on a different clock.

To be direct about the boundary: Govy's jurisdiction-aware legal template pack ships for KSA, UAE, US-Delaware, and the UK today. A tax-qualified stock option agreement under Japan's rules, a venture-certified Korean option grant, or a Taiwanese closely-held company's non-cash share subscription still need your own local counsel to draft — same as with any other cap table tool, including the region-blind ones. Our piece on what actually needs a lawyer in an ESOP covers the same principle: some steps are one-time legal judgment calls, and no software should pretend otherwise.

The honest shortlist

If your company is a Delaware C-corp with no remaining Japanese, Korean, or Taiwanese entity, Carta or Pulley will do the job. If you're still operating locally — a KK deciding which tax-qualified exercise cap applies, a venture-certified Korean company tracking a certification that can lapse, a Taiwanese closely-held company that issued shares for code instead of cash — that's the gap no regional-native tool has closed yet, and the one Govy works on tracking, governance, and the data room around, while your local counsel handles the paperwork specific to each statute.

See how Govy tracks equity, governance, and fundraising in one ledger at govy.tech.

FAQ

Can a Japanese startup issue stock options without converting to a KK?

Not in practice. A Godo Kaisha (GK) can't issue shares or venture-capital-style stock options at all — it has membership interests, not stock — so startups that plan to raise institutional capital or grant equity almost always convert to a Kabushiki Kaisha (KK) first. The conversion is routine and well understood by Japanese counsel, but it has to happen before the option grants do, not after.

How much can a Japanese employee exercise tax-deferred under a "tax-qualified" stock option?

Since Japan's April 2024 reform, the annual exercise-value cap for tax-qualified (税制適格) stock options rose from a flat 12 million yen to 24 million yen for companies under five years old and 36 million yen for companies aged five to twenty years that are unlisted or listed less than five years. Stay under the cap and tax is deferred until the shares are sold, taxed at roughly 20% as capital gains; breach it and the option is taxed as ordinary income at exercise, which can run well above 40%.

What's the difference between a Korean Commercial Act stock option and a Venture Business Act one?

Both let a Korean stock company (주식회사) grant employees the right to buy shares at a fixed price, but the ceiling is completely different. Under the Commercial Act alone, options are capped at 10% of total issued and outstanding shares; a company that holds official venture-company certification under the Venture Business Act can grant up to 50%. Since July 2024, venture-certified companies can also issue RSUs directly, a route the plain Commercial Act still doesn't offer.

What is a Taiwan closely-held company and why do startups choose it?

A closely-held company limited by shares (閉鎖性股份有限公司) is a company type Taiwan created in 2015 specifically for startups, capped at 50 shareholders with transfer restrictions built into the articles. Its two advantages over an ordinary Taiwanese company limited by shares are that founders can pay for shares with technology, know-how, or services instead of cash, and that preferred shares can carry multiple votes or none at all — both useful for a founding team issuing equity before there's much cash on the balance sheet.

Do Japanese, Korean, or Taiwanese startups need to flip to Delaware to raise US venture money?

Far less often than founders in MENA, Africa, or Latin America. All three markets have functioning local growth-stock exchanges — Tokyo's TSE Growth Market, KOSDAQ, and Taiwan's Taipei Exchange — so a domestic entity isn't the liability it is in markets with no local exit path. Flips still happen when a US-only fund insists on a Delaware C-corp as a term, but it's a deal-specific ask here, not the default architecture.