This article series will provide useful insights into the changing investment and innovation environment, and new business opportunities in Japan.
1.1 Types of operation in Japan
Foreign companies generally establish a business presence in Japan in one of three modes.
1.1.1 Representative office
Representative offices are established as locations for carrying out preparatory and supplemental tasks aimed at enabling foreign companies to engage in full-scale business operations in Japan. These offices may conduct market surveys, collect information, purchase goods and implement publicity/advertising efforts, but they are not permitted to engage in sales activities. The establishment of representative offices does not require registration. A representative office cannot ordinarily open bank accounts or lease real estate in its own name, so agreements for such purposes must instead be signed by the head office of the foreign company or the representative at the representative office in an individual capacity.
1.1.2 Branch office
Foreign companies wishing to engage in continuous transactions in Japan must register in the country (see Article 818 of the Companies Act). To do so, they must at least register (1) the appointment of a representative in Japan, (2) the establishment of a branch office, (3) a Japanese corporation, or (4) a partnership. Of these, the simplest means for a foreign company to establish a base for business operations in Japan is to set up a branch office. The branch office can begin business operations as soon as an office location is secured, the branch office representative determined, and the necessary information registered. A Japanese branch office is a business location that provides services in Japan decided upon by an organization authorized by the foreign company, and ordinarily is not expected to engage in independent decision making. A branch office does not have its own legal corporate status, but instead is deemed to be encompassed within the corporate status of the foreign company. In general, therefore, the foreign company is ultimately responsible for all debts and credits generated by the activities of its Japanese branch office. A Japanese branch office, however, may open bank accounts and lease real estate in its own name.
1.1.3 Subsidiary company
A foreign company establishing a subsidiary company in Japan must choose to establish the subsidiary company as a joint-stock corporation (Kabushiki-Kaisha (K.K.)), limited liability company (Godo-Kaisha), or similar entity stipulated by Japan's Companies Act. Both unlimited partnerships (Gomei-Kaisha) and limited partnerships (Goshi-Kaisha) are granted corporate status under the Companies Act, but they are rarely chosen in practice because equity participants bear unlimited rather than limited liability. All types of subsidiary companies can be established by completing the required procedures stipulated by law and then registering the corporation. A subsidiary is a separate corporation from the foreign company, so the foreign company will bear the liability of an equity participant stipulated by law for all debts and credits generated by the activities of the subsidiary. Other methods by which a foreign company may invest in Japan using a Japanese corporation but without establishing a subsidiary are by establishing a joint venture with a Japanese enterprise or investment company, and by equity participation in a Japanese enterprise.
Joint-stock corporations and limited liability companies are similar insofar as liability in them is limited to the assets contributed by equity participants. Compared with joint-stock corporations, however, limited liability companies have greater freedom of self-government through their articles of association and, unlike joint-stock corporations, they may stipulate the procedures for preparing and approving their financial statements in their articles of association as there are no laws and regulations relating to finalizing annual financial statements and do not have to publish their financial results. Additionally, although their members are as a rule required to execute business, their articles of association may allow for the appointment of “managing partners.”
Laws and Regulations on Setting Up Business in Japan Pamphlet
The pamphlet "Laws & Regulations" is available in PDF, and outlines basic information about laws, regulations and procedures related to setting up a business in Japan. It is available in 8 languages (Japanese, English, German, French, Chinese (Simplified), Chinese (Traditional), Korean and Vietnamese).
You can download via the "Request Form" button below.
Section1: Notifications or reports regarding acquisition of stocks, equity, etc.
Section | Industries or countries/regions subject to the regulations | The competent authorities relating to these documents |
---|---|---|
1-3 |
Industries in which prior notification is required *Determined from the perspective of national security and public safety |
Ministry of Finance (Japanese only) |
1-3 |
Industries in which prior notification is required *Determined from the perspective of public order and the smooth operation of Japan's economy |
Ministry of Finance (Japanese only) |
1-3 | Business Categories Subject to the Subsequent Report under the Ordinance concerning Foreign Direct Investment, etc. |
Ministry of Finance (Japanese only) |
1-3 | Listed countries/regions that are not subject to prior notification when making inward direct investment |
International Department, Bank of Japan (Japanese only) |
Section1:Documents businesses are required to submit to authorities
Section | Documents | Where documents are listed within the URL | The competent authority or relevant organization relating to each document |
---|---|---|---|
1-2 |
Example 2 of Articles of Incorporation of Stock Company (Japanese sample only) *privately-owned, 1 or more directors, no board of directors, no auditor |
See Examples of Articles of Incorporation⇒Articles of Incorporation of Stock Company⇒2. Small and Medium-Sized Company | Japan National Notaries Association(248KB) |
1-2 | Statement of Beneficial Owner(294KB) | Japan National Notaries Association(248KB) | |
1-3 | Report Relating to the Acquisition, etc. of Shares / Equity | International Department, Bank of Japan | |
1-3 | Affidavit / Written Oath Statement | See "Registration Procedures of a Foreign Company" ⇒"[Example] Application Form for Registration of Establishment of Business Office for Foreign Company" p.12 | Civil Affairs Bureau, Ministry of Justice |
1-3 | Application for Registration of Establishment of Stock Company | See Chapter 4-5. Matters to State⇒ "Application for Registration of Establishment of a Stock Company (Establishment of a Company without Board of Directors) Example of Description (PDF)" | Civil Affairs Bureau, Ministry of Justice |
1-3 | Seal (Revision Mark) Form | See Chapter 4-5. Matters to State ⇒ "Application for Registration of Establishment of a Stock Company (Establishment of a Company without Board of Directors)"⇒ "Seal Registration Form Example of Description (PDF)" | Civil Affairs Bureau, Ministry of Justice |
1-3 | Application Form for Registration of Establishment of Business Office for Foreign Company | See "Registration Procedures of a Foreign Company" ⇒"[Example] Application Form for Registration of Establishment of Business Office for Foreign Company" | Civil Affairs Bureau, Ministry of Justice |
The information contained in this documents should be used at the reader’s independent discretion. While JETRO makes every effort to ensure the accuracy of the information it provides, no responsibility is accepted by JETRO for any loss or damage incurred as a result of actions based on the information provided in these documents or provided by the external links listed on these pages.
JETRO supports your business in Japan
We provide consistent one-stop service for establishing a base or expanding business in Japan. See the details of support services that JETRO provides when setting up business in Japan.
Contact Us
Investing in and collaborating with Japan
We will do our very best to support your business expansion into and within Japan as well as business collaboration with Japanese companies. Please feel free to contact us via the form below for any inquiries.
Inquiry FormJETRO Worldwide
Our network covers over 50 countries worldwide. You can contact us at one of our local offices near you for consultation.
Worldwide Offices