Doing Business in Japan

イデアビジネスインテリジェンスホームページに戻る
会計事務所ホームページへ戻る
To IDEA International Accounting Office (English)

Doing Business
in Japan

Doing Business in Japan

Nowadays, there is much information to assist in understanding the Japanese business custom.
The following information is designed to focus on the business organization form you may choose when you enter Japanese market.
We will expand the advise based on client inquires in the future.
We hope you get some understanding how to establish an office in Japan.

1 Establishing Office in Japan
You can enter the Japanese market trough the following forms of business organization.

       Liaison office
       Branch
       Company

2 Liaison office
A liaison office is not a legal entity and is not required to obtain commercial registration.
It's activities are limited solely to information gathering, market research and general liaison with the head office of a foreign corporation
Liaison offices are not allowed to engage in any commercial transactions such as concluding contracts, taking orders or invoicing and collecting money.

3 Branch
A branch must register with the Japanese authorities however, it is faster and cheaper to set up compared with company.
A branch may engage in all forms of trading, manufacturing, retailing or the provision of services.
One of the representatives in the branch must be a resident, but not necessarily a citizen of Japan.
The branch must pay Japanese corporate income tax from income derived from sources within Japan, although these taxes paid to Japan it may be that offsetting tax credits are available in your home country.

4 Company
Japan has four basic corporate forms :

       Gomei Kaisha (partnership)
       Goshi Kaisha (limited partnership)
       Yugen Kaisha (limited liability company)
       Kabushiki Kaisha (joint stock company)

Gomei Kaisha (partnership) & Goshi Kaisha (limited partnership) are usually not selected by foreign investors because of their unlimited liability.
Yugen Kaisha is intended for smaller, family-held business operations and because it may be that the proper corporate image in Japan, it is also rarely used by foreign investors.
Kabushiki Kaisha is the most widely used form.

5 Establishing Company
Establishing a Japanese corporation requires the drawing up of the company's bylaws, electing directors and auditor.
At least one of the directors is selected as the representative director, and one representative director must be a resident of Japan.
The total initial cost of setting up a Kabushiki Kaisha will run about US$7,000. About half of this goes to the attorney, and about half is needed for taxes, notarization and registration fees.
It also requires a minimum capitalization of about US$100,000 (yen 100 per US$1).
Kabushiki Kaisha must have annual shareholders' meetings, and board meetings must be held quarterly. These meetings can be held in Japan or overseas.