Available Business Entities:
Branch Office, domestic corporations (Kabushiki-Kaisha (joint-stock corporation), Godo-Kaisha (limited liability company (LLC))), and Representative Office
The main entities available for foreign companies or foreign nationals to conduct business in Japan are: (1) Branch office of a foreign corporation, (2) Kabushiki-Kisha (joint stock corporation) or Godo-Kaisha (limited liability company (LLC)) as subsidiary, and (3) Representative office of a foreign corporation. Various other types of legal entities can be established under various laws and regulations, but usually one of these three is used.
Since Branch Office and Kabushiki-Kisha (joint stock corporation)/Godo-Kaisha (limited liability company (LLC)) are explained in detail in a separate section, only (3) Representative Office is explained here.
What is Representative Office?
Representative Office is the base in Japan for the business activities of a foreign company and is an entity that conducts activities preliminary to sales activities, such as information gathering and provision, advertising and promotion, and market research, etc. If activities are limited to these activities, there is no need to register with the Legal Affairs Bureau in Japan. However, if it sells products or services and engages in continuous trading activities, it is necessary to make application for registration of A Foreign Company by establishing Branch Office in Japan (Article 817, Paragraph 1 of the Companies Act).
Can Representative Office open a bank account?
Since Representative Office does not have legal personality, it is not possible to conclude various contracts such as an office lease agreement in the name of the Representative Office. It is also not possible to open a bank account in the name of the Representative Office. Various contracts are signed and bank accounts are opened in the name of the individual representative of the Representative Office.
When employing employees, various notifications must be submitted to the Labor Standards Inspection Office, the Public Employment Security Office, the Social Insurance Office, and the Tax Office.
A representative office is not considered a permanent establishment in Japan and is therefore not subject to corporate income tax.