Investing in Japan
Latest UpdatesResidency in Japan no longer required for representative directors to establish Japanese subsidiary of a foreign company
Residency in Japan no longer required for representative directors to establish Japanese subsidiary of a foreign company
Apr 16, 2015
The Ministry of Justice abolished the requirement that at least one representative director must have a residential address in Japan in order to register the Japanese subsidiary of foreign companies, as of March 16th. This abolishment enabled Japanese subsidiaries to be set up by foreigners alone, and therefore made it easier for foreign companies to start businesses in Japan.
Previously, it was not possible to register a subsidiary in Japan by the foreign representative directors who were dispatched by the foreign company. Japanese law required that at least one of the representative directors must reside in Japan to register the subsidiary. However, for foreigners, in order to prove their residence, they need to obtain visa in Japan, and to do so, they need documents to prove that the subsidiary that supports the visa is registered. This requirement of residence and the registration procedure created a “chicken and egg” situation in the process of registering a subsidiary.
Foreign companies made requests to reform this regulation to JETRO’s “Invest Japan Hotline”. JETRO accumulated these requests, and proposed reform to “the Regulatory Reform Hotline” of the Cabinet Office. Following discussions in the working group of the Regulatory Reform Council and the Ministry of Justice, the abolishment of the regulation was decided.