Section 1. Incorporating Your Business

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.”

Section1: Table of Contents


Section1: Reference

Section Documents Reference The competent authorities relating to these documents
1-3 Industries in which prior notification is required before foreign direct investment in Japan ReferencePDF file(799KB) International Department, Bank of JapanExternal site: a new window will open
(Japanese only)
1-3 Business Categories Subject to the Subsequent Report under the Ordinance concerning Foreign Direct Investment, etc. ReferencePDF file(904KB) International Department, Bank of JapanExternal site: a new window will open
(Japanese only)
1-3 Listed countries
* Inward FDI from all other countries except the listed countries requires prior notification
ReferencePDF file(432KB) International Department, Bank of JapanExternal site: a new window will open
(Japanese only)

Section1:Documents businesses are required to submit to authorities

Section Documents Reference The competent authorities relating to the document
1‐2 Articles of Incorporation of Stock Company ReferencePDF File(420KB) Japan National Notaries AssociationExternal site: a new window will open
1-3 Report Relating to the Acquisition, etc. of Shares / Equity ReferencePDF File(271KB) International Department, Bank of JapanExternal site: a new window will open
1-3 Affidavit ReferencePDF File(450KB) Legal Affairs Bureau, Ministry of JusticeExternal site: a new window will open
1-3 Application Form for Registration of Incorporation of Stock Company ReferencePDF File(839KB) Legal Affairs Bureau, Ministry of JusticeExternal site: a new window will open
1-3 Application for Registration of the Establishment of a Business Office of a Foreign Company ReferencePDF File(604KB) Legal Affairs Bureau, Ministry of JusticeExternal site: a new window will open
1-3 Certificate of a Seal-Impression ReferencePDF File(74KB) Legal Affairs Bureau, Ministry of JusticeExternal site: a new window will open
1-3 Cetificate of Signature ReferencePDF File(32KB)

Materials listed as ‘Reference’ contain samples of documents regarding registration, visa, taxation, personnel and labor matters that are necessary when a foreign company establishes a corporation or other entity in Japan. These documents are not published by competent authorities and therefore are not official. For those who are going through the official procedures, please obtain the latest official documents from the competent authorities and related bodies or consult a person who specializes in advising on such information and procedures.

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.

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