The scope of taxable income for corporate tax differs by the mode of activity of a foreign corporation in Japan, as will be described later. For the purpose of determining the income of non-residents and foreign corporations subject to withholding tax, domestic-sourced income is defined as follows:
Certain interest on public and corporate bonds, interest on savings and deposits derived from offices in Japan
Interest on loans for business operations in Japan
Dividends on shares or securities investment trusts of domestic corporations
Consideration for use of real estate or similar property in Japan; rental/lease of ships or aircraft to residents or domestic corporations
Salaries, wages, bonuses and other compensation for the provision of services in Japan
Retirement allowances and pensions for services rendered as residents
Consideration for the services of freelance professionals in Japan
Certain consideration for rendering professional services in Japan excercised by entertainers, freelance professionals, technicians, etc.
Usage fees or consideration for transfers of patent rights, know-how, copyrights, etc., in connection with services in Japan
Usage fees for machinery and equipment in connection with services in Japan
Prizes offered in Japan for publicity/advertising purposes
Pensions paid on the basis of agreements concluded in Japan
Profit on redemption of discount bonds issued in Japan
Certain income resembling interest income in nature
Certain income from the transfer of real estate in Japan
Distribution of profits in accordance with a silent partnership contract (Tokumei Kumiai contract)
Certain income other than the above derived from the management, ownership, or transfer of assets in Japan
Domestic business income
Distribution of profits pursuant to a partnership agreement provided for by Civil Law, and other kindred partnership agreements
(Jetro "How to Set Up Business in Japan" http://www.jetro.go.jp/)
Ishiwari Accouting Office
Ishiwari CPA office is a professional service firm which has provided a wide range of accounting, financial and tax consulting services to clients since 1990's. Our philosophy is to build close relationships with clients, meet each business needs and help them to achieve business objects by offering tailored solutions to our clients at the reasonable fee. We provide wide ranges of services including, Accounting, Tax advisory services, Business Startup & IPO support, Financial and Management Consulting, Payroll and Social insurance, and outsourcing services to both Japanese companies and Non-Japanese International companies.
Ishiwari CPA office provides services with Japanese and American companies operating in Japan. We are committed to provide the highest quality of professional services in order to add values to your business operations.
Name of office; Ishiwari CPA Office
Address; Takanawa OS Bldg 6F, 3-19-20 Takanawa, Minato-ku, Tokyo 108-0074, Japan
Phone; +81-3-3442-8004
2011年3月23日水曜日
Japanese corporate tax system for investment in Japan
1. Neutrality of tax system with respect to mode of business presence (branch or subsidiary)
Corporations engaged in economic activities in Japan are subject to taxes in Japan on the profits generated by those economic activities. Steps have been taken, however, to ensure that the tax system does not impose unfair burdens on multinational corporations engaged in economic activities in Japan on the basis of the mode of their business presence in Japan. Income of corporations established in Japan is, as a rule and with the exception of certain non-taxable and tax-exempt income, subject to taxation, regardless of where it was generated (i.e., the source country of income), but when that income includes profits earned in foreign countries that are taxed in the source countries of that income, foreign taxation deductions are available whereby taxes paid in a foreign country may within certain bounds be deducted from Japanese taxes owed for the purpose of eliminating double taxation between the source country of income and Japan. Regarding Japanese branches of foreign corporations, measures such as only certain income generated within Japan is subject to taxation in Japan, have been implemented to avoid international double taxation in Japan.
2. Withholding at source and self-assessment/payment
Multinational corporations engaged in activities in Japan that earn income subject to taxation in Japan calculate and pay the taxes owed through withholding procedures or self-assessed income tax procedures according to their form of corporation and type of income.
(Jetro "How to Set Up Business in Japan" http://www.jetro.go.jp/)
Ishiwari Accouting Office
Ishiwari CPA office is a professional service firm which has provided a wide range of accounting, financial and tax consulting services to clients since 1990's. Our philosophy is to build close relationships with clients, meet each business needs and help them to achieve business objects by offering tailored solutions to our clients at the reasonable fee. We provide wide ranges of services including, Accounting, Tax advisory services, Business Startup & IPO support, Financial and Management Consulting, Payroll and Social insurance, and outsourcing services to both Japanese companies and Non-Japanese International companies.
Ishiwari CPA office provides services with Japanese and American companies operating in Japan. We are committed to provide the highest quality of professional services in order to add values to your business operations.
Name of office; Ishiwari CPA Office
Address; Takanawa OS Bldg 6F, 3-19-20 Takanawa, Minato-ku, Tokyo 108-0074, Japan
Phone; +81-3-3442-8004
Corporations engaged in economic activities in Japan are subject to taxes in Japan on the profits generated by those economic activities. Steps have been taken, however, to ensure that the tax system does not impose unfair burdens on multinational corporations engaged in economic activities in Japan on the basis of the mode of their business presence in Japan. Income of corporations established in Japan is, as a rule and with the exception of certain non-taxable and tax-exempt income, subject to taxation, regardless of where it was generated (i.e., the source country of income), but when that income includes profits earned in foreign countries that are taxed in the source countries of that income, foreign taxation deductions are available whereby taxes paid in a foreign country may within certain bounds be deducted from Japanese taxes owed for the purpose of eliminating double taxation between the source country of income and Japan. Regarding Japanese branches of foreign corporations, measures such as only certain income generated within Japan is subject to taxation in Japan, have been implemented to avoid international double taxation in Japan.
2. Withholding at source and self-assessment/payment
Multinational corporations engaged in activities in Japan that earn income subject to taxation in Japan calculate and pay the taxes owed through withholding procedures or self-assessed income tax procedures according to their form of corporation and type of income.
(Jetro "How to Set Up Business in Japan" http://www.jetro.go.jp/)
Ishiwari Accouting Office
Ishiwari CPA office is a professional service firm which has provided a wide range of accounting, financial and tax consulting services to clients since 1990's. Our philosophy is to build close relationships with clients, meet each business needs and help them to achieve business objects by offering tailored solutions to our clients at the reasonable fee. We provide wide ranges of services including, Accounting, Tax advisory services, Business Startup & IPO support, Financial and Management Consulting, Payroll and Social insurance, and outsourcing services to both Japanese companies and Non-Japanese International companies.
Ishiwari CPA office provides services with Japanese and American companies operating in Japan. We are committed to provide the highest quality of professional services in order to add values to your business operations.
Name of office; Ishiwari CPA Office
Address; Takanawa OS Bldg 6F, 3-19-20 Takanawa, Minato-ku, Tokyo 108-0074, Japan
Phone; +81-3-3442-8004
Incorporating Your Business
Certificate on registered company information and company seal registration certificate
Once registration of establishment has been completed for a Japanese branch office or a subsidiary company, a certificate on registered company information can be obtained from the Legal Affairs Bureau. The certificate on registered company information is a document officially certifying a company's registered information.
The principal information to be registered for a joint-stock corporation is as follows:
Corporate name
Location of head office
Business purposes
Method of giving public notice
Total number of shares to be issued
Types and numbers of outstanding shares
Rules on the limitation of transfer of shares
Amount of capital
Directors and dates of appointment
Representative directors and dates of appointment
Auditors and dates of appointment
Date of company establishment
The certificate on registered company information must ordinarily be presented whenever opening a bank account, filing notifications with administrative authorities, purchasing assets for which name registration is required (real estate, securities, vehicles, telephone lines, etc.), and concluding important agreements with business partners.
On certain occasions, the company seal registration certificate will need to be submitted along with the certificate on registered company information. The company seal registration certificate is a document publicly certifying the company seal that has been registered. This certificate is used to confirm whether or not company seals placed on applications, filings, contracts, etc., have been placed there with legitimate authorization from the company; the certificate may be obtained from the Legal Affairs Bureau after completion of establishment registration. The company seal as well as the names of the persons authorized to use the seal must be registered with the Legal Affairs Bureau when applying for establishment registration. The representatives of the branch office/subsidiary company are the only parties authorized to use the company seal, and their personal seal registration certificates or signature certificates must be presented when registering the company seal.
In the event of changes to the registered information or the company seal, the prescribed modification procedures must be completed promptly. Applications for registration of changes to registered information must be submitted to the Legal Affairs Bureau within two weeks of the changes for subsidiary companies, and within three weeks of the changes for branch offices.
(Jetro "How to Set Up Business in Japan" http://www.jetro.go.jp/)
Ishiwari Accouting Office
Ishiwari CPA office is a professional service firm which has provided a wide range of accounting, financial and tax consulting services to clients since 1990's. Our philosophy is to build close relationships with clients, meet each business needs and help them to achieve business objects by offering tailored solutions to our clients at the reasonable fee. We provide wide ranges of services including, Accounting, Tax advisory services, Business Startup & IPO support, Financial and Management Consulting, Payroll and Social insurance, and outsourcing services to both Japanese companies and Non-Japanese International companies.
Ishiwari CPA office provides services with Japanese and American companies operating in Japan. We are committed to provide the highest quality of professional services in order to add values to your business operations.
Name of office; Ishiwari CPA Office
Address; Takanawa OS Bldg 6F, 3-19-20 Takanawa, Minato-ku, Tokyo 108-0074, Japan
Phone; +81-3-3442-8004
Once registration of establishment has been completed for a Japanese branch office or a subsidiary company, a certificate on registered company information can be obtained from the Legal Affairs Bureau. The certificate on registered company information is a document officially certifying a company's registered information.
The principal information to be registered for a joint-stock corporation is as follows:
Corporate name
Location of head office
Business purposes
Method of giving public notice
Total number of shares to be issued
Types and numbers of outstanding shares
Rules on the limitation of transfer of shares
Amount of capital
Directors and dates of appointment
Representative directors and dates of appointment
Auditors and dates of appointment
Date of company establishment
The certificate on registered company information must ordinarily be presented whenever opening a bank account, filing notifications with administrative authorities, purchasing assets for which name registration is required (real estate, securities, vehicles, telephone lines, etc.), and concluding important agreements with business partners.
On certain occasions, the company seal registration certificate will need to be submitted along with the certificate on registered company information. The company seal registration certificate is a document publicly certifying the company seal that has been registered. This certificate is used to confirm whether or not company seals placed on applications, filings, contracts, etc., have been placed there with legitimate authorization from the company; the certificate may be obtained from the Legal Affairs Bureau after completion of establishment registration. The company seal as well as the names of the persons authorized to use the seal must be registered with the Legal Affairs Bureau when applying for establishment registration. The representatives of the branch office/subsidiary company are the only parties authorized to use the company seal, and their personal seal registration certificates or signature certificates must be presented when registering the company seal.
In the event of changes to the registered information or the company seal, the prescribed modification procedures must be completed promptly. Applications for registration of changes to registered information must be submitted to the Legal Affairs Bureau within two weeks of the changes for subsidiary companies, and within three weeks of the changes for branch offices.
(Jetro "How to Set Up Business in Japan" http://www.jetro.go.jp/)
Ishiwari Accouting Office
Ishiwari CPA office is a professional service firm which has provided a wide range of accounting, financial and tax consulting services to clients since 1990's. Our philosophy is to build close relationships with clients, meet each business needs and help them to achieve business objects by offering tailored solutions to our clients at the reasonable fee. We provide wide ranges of services including, Accounting, Tax advisory services, Business Startup & IPO support, Financial and Management Consulting, Payroll and Social insurance, and outsourcing services to both Japanese companies and Non-Japanese International companies.
Ishiwari CPA office provides services with Japanese and American companies operating in Japan. We are committed to provide the highest quality of professional services in order to add values to your business operations.
Name of office; Ishiwari CPA Office
Address; Takanawa OS Bldg 6F, 3-19-20 Takanawa, Minato-ku, Tokyo 108-0074, Japan
Phone; +81-3-3442-8004
Information listed in articles of incorporation
Information listed in articles of incorporation
Articles of incorporation list "absolute matters" and "relative matters." Absolute matters are matters that must be stated for the articles of incorporation to be valid, and relative matters are matters that do not have legal effect unless stated in the articles of incorporation.
Matters listed in articles of incorporation of Kabushiki-Kaisha (joint-stock corporations)
Absolute entries
Purpose, trade name, place of principal office, value or minimum amount of assets contributed at time of incorporation, name and address of each promoter
Main relative entries
Names of persons contributing in kind, assets to be contributed, value of the assets, and number and type of shares assigned therefore; assets to be taken over after the coming into existence of the corporation, value thereof, and name of transferor; incorporation expenses incurred by the corporation; appointment of auditor(s); appointment of board of directors; rules on allocation of profits
(Jetro "How to Set Up Business in Japan" http://www.jetro.go.jp/)
Ishiwari Accouting Office
Ishiwari CPA office is a professional service firm which has provided a wide range of accounting, financial and tax consulting services to clients since 1990's. Our philosophy is to build close relationships with clients, meet each business needs and help them to achieve business objects by offering tailored solutions to our clients at the reasonable fee. We provide wide ranges of services including, Accounting, Tax advisory services, Business Startup & IPO support, Financial and Management Consulting, Payroll and Social insurance, and outsourcing services to both Japanese companies and Non-Japanese International companies.
Ishiwari CPA office provides services with Japanese and American companies operating in Japan. We are committed to provide the highest quality of professional services in order to add values to your business operations.
Name of office; Ishiwari CPA Office
Address; Takanawa OS Bldg 6F, 3-19-20 Takanawa, Minato-ku, Tokyo 108-0074, Japan
Phone; +81-3-3442-8004
Articles of incorporation list "absolute matters" and "relative matters." Absolute matters are matters that must be stated for the articles of incorporation to be valid, and relative matters are matters that do not have legal effect unless stated in the articles of incorporation.
Matters listed in articles of incorporation of Kabushiki-Kaisha (joint-stock corporations)
Absolute entries
Purpose, trade name, place of principal office, value or minimum amount of assets contributed at time of incorporation, name and address of each promoter
Main relative entries
Names of persons contributing in kind, assets to be contributed, value of the assets, and number and type of shares assigned therefore; assets to be taken over after the coming into existence of the corporation, value thereof, and name of transferor; incorporation expenses incurred by the corporation; appointment of auditor(s); appointment of board of directors; rules on allocation of profits
(Jetro "How to Set Up Business in Japan" http://www.jetro.go.jp/)
Ishiwari Accouting Office
Ishiwari CPA office is a professional service firm which has provided a wide range of accounting, financial and tax consulting services to clients since 1990's. Our philosophy is to build close relationships with clients, meet each business needs and help them to achieve business objects by offering tailored solutions to our clients at the reasonable fee. We provide wide ranges of services including, Accounting, Tax advisory services, Business Startup & IPO support, Financial and Management Consulting, Payroll and Social insurance, and outsourcing services to both Japanese companies and Non-Japanese International companies.
Ishiwari CPA office provides services with Japanese and American companies operating in Japan. We are committed to provide the highest quality of professional services in order to add values to your business operations.
Name of office; Ishiwari CPA Office
Address; Takanawa OS Bldg 6F, 3-19-20 Takanawa, Minato-ku, Tokyo 108-0074, Japan
Phone; +81-3-3442-8004
Procedures for registering establishment
Registration of establishment of a branch office
A branch office may begin business operations after registering its establishment with the Legal Affairs Bureau; branch offices of foreign companies must register in accordance with the registration requirements for Japanese corporations of most similar form to that of the foreign company. In order to select the most similar form of Japanese corporations and to determine the information to be registered, reference should be made to the foreign company's articles of incorporation, establishment certificate, registration certificate, and other such documentation. Once the details of the branch office to be registered—the address of the branch office, the representative in Japan, the date of establishment of the branch office and the disclosure method for balance sheets—are determined, the information that must be registered can be ascertained.
Document(s) certifying the information to be registered must be submitted when applying for registration of the establishment of a branch office, and the certified document(s) must be issued by the competent authorities in the home country of the foreign company. It is often convenient to use an "affidavit" on information for registration certified by that country's embassy/consulate in Japan 1).
General flow of procedures for establishing a branch office
1. Determination of branch office information to be registered
2. Examination at the Legal Affairs Bureau of similar corporate names
3. Establishment of branch office (date of branch office establishment is at the branch office's discretion)
4. Preparation of affidavit on establishment of branch office
5. Certification of affidavit by embassy/consulate in Japan 1)
6. Application to the Legal Affairs Bureau for registration of branch office establishment; registration of company seal with the Legal Affairs Bureau
7. Acquisition of certificate on registered information and company seal registration certificate(approx. two weeks after application for registration)
8. Opening of bank account under branch office name
(Note) Time required: about one month after determination of branch office information to be registered
1) If your embassy does not provide notary services, certification by a public notary in your home country is required.
1.3.2 Registration of establishment of a subsidiary company
Subsidiary companies are established through registration with the Legal Affairs Bureau. The application date for registration will also be the date of establishment, and the company may carry out business operations from that date. Some of the documents needed for the subsidiary establishment procedures should be prepared in the home country of the foreign company: document(s) certifying the profile of the foreign company, document(s) certifying the representative authority of the foreign company's representative and document(s) certifying the authenticity of the signature of the foreign company's representative.
The foreign company's articles of incorporation, establishment certificate, registration certificate and other official documents as well as an affidavit notarized by a notary public in the home country of the foreign company are ordinarily used. These documents will be required in completing the procedures for certifying the subsidiary company's articles of incorporation in Japan. These documents may also be needed when requesting a financial institution in Japan to take custody of the subsidiary's capital and issue a capital custody certificate. The capital custody certificate is a certificate issued by a financial institution when the full amount of the subsidiary's capital has been remitted to a special account specified by the financial institution asked to take custody. The certified articles of incorporation and the capital custody certificate will both be needed when applying for registration of company establishment.
General flow of procedures for establishing a Kabushiki-Kaisha (joint-stock corporation)
1. Determination of profile of joint-stock corporation to be established 1)
2. Examination at the Legal Affairs Bureau of similar corporate names
3. Preparation of joint-stock corporation's articles of incorporation
4. Acquisition of registration certificates, etc. for parent company, and preparation of affidavits regarding profile of parent company and affidavits regarding signatures of representatives of parent company (affidavits must be attested by a public notary in equity participants' own countries) 2)
5. Notarization of joint-stock corporation's articles of incorporation by Japanese notary public
6. Application to bank for capital custody and issue of capital custody certificate 3)
7. Remittance of joint-stock corporation capital to special bank account
8. Appointment of directors and other officers, such as representative directors and auditors
9. Examination by directors and auditors of legality of establishment procedures
10. Application to the Legal Affairs Bureau for registration of joint-stock corporation establishment (joint-stock corporation establishment date); registration of company seal with the Legal Affairs Bureau
11. Acquisition of certificate on registered information and company seal registration certificate(approx. two weeks after application for registration)
12. Opening of bank account under company name
13. Notification of stock acquisition to the Bank of Japan
(notification prior to company establishment may be required in certain sectors)
(Note) Time required: about two months after determination of profile of company to be established
1) This profile should contain information including the following: trade name, location of head office, business objectives, business year, amount of capital, issue price of shares, existence of provisions restricting transfer of shares, existence of board of directors, names of directors and representative directors, terms of directors, names of equity participants, and values of their investments.
2) If an individual or corporation with an address in Japan is the promoter of a joint-stock corporation and a foreign enterprise is the underwriter of shares in that corporation when it is established (such a situation is called a "formation with outside offering," or Boshû Setsuritsu), affidavits regarding the parent companies may not be required.
While in this case shares issued when the joint-stock corporation is established are shared by the promoter and foreign enterprise, the joint-stock corporation may be made a 100% subsidiary of the foreign enterprise by subsequently transferring the shares held by the promoter.
3) If a joint-stock corporation is incorporated with the joint equity participation of an individual or corporation with a bank account in Japan, it may not be necessary to apply to a bank for capital custody and issuance of a capital custody certificate. In this case, it is sufficient for the capital to be paid into the joint equity participant’s bank account in Japan, and for documentary evidence to be submitted by the representative director of the joint-stock corporation in place of a bank-issued capital custody certificate in order to certify that payment of the full amount of capital has been received.
General flow of procedures for establishing a Godo-Kaisha (LLC)
1. Determination of profile of Godo-Kaisha to be established 1)
2. Examination at the Legal Affairs Bureau of similar corporate names
3. Acquisition of certification regarding equity participants (in equity participants' own countries):
Acquisition of registration certificates, etc. for companies that will become equity participants, and preparation of affidavits regarding profiles of companies that will become equity participants and affidavits regarding signatures of representatives of companies that will become equity participants (affidavits must be attested by a public notary in equity participants' own countries)
4. Acquisition of certification regarding equity participants (in Japan):
Acquisition of registration certificates for companies that will become equity participants
Acquisition of seal certificates for individuals/companies that will become equity participants
5. Preparation of Godo-Kaisha's articles of incorporation
6. Payment by members of investment stipulated in articles of incorporation
7. Application to the Legal Affairs Bureau for registration of establishment of Godo-Kaisha (Godo-Kaisha establishment date), registration of company seal with the Legal Affairs Bureau
8. Acquisition of certificate of registered information and company seal registration certificate (approx. two weeks after application for registration)
9. Opening of bank account under company name
10. Notification of stock acquisition to the Bank of Japan (notification prior to company establishment may be required in certain sectors)
(Note) Time required: about one month after determination of profile of company to be established
1) This profile should contain information including the following: trade name, location of head office, business objectives, business year, amount of capital, names of members (equity participants) and values of their subscriptions, names of representative members, and names of executive officers (representative members in the case of a corporation).
Registration of establishment of limited liability partnership
A limited liability partnership is formed when two or more individuals or corporations conclude a limited liability partnership agreement, pay the investment specified in the agreement, and register the entity thus established. As the law does not describe in detail how LLPs should operate, unlike in the case of joint-stock corporations, details are laid down in LLP agreements. Accordingly, finalizing the content of the LLP agreement is the most important stage in the process of establishment of an LLP. Furthermore, as a partnership must be established in partnership with an individual resident in Japan or a Japanese corporation, several documents need to be prepared in both Japan and the country of the foreign party.
General flow of procedures for establishing a limited liability partnership
1. Determination of profile of LLP 1)
2. Examination at the Legal Affairs Bureau of similar corporate names
3. Acquisition of certification regarding partners (in partners' own countries):
Acquisition of registration certificates, etc. of companies that will become partners, and preparation of affidavits regarding profiles of companies that will become partners and affidavits regarding signatures of representatives of companies that will become partners (affidavits must be attested by a public notary in partners' own countries)
4. Acquisition of certification regarding partners (in Japan):
Acquisition of registration certificates of companies that will become partners
Acquisition of seal certificates of individuals/companies that will become partners
5. Conclusion of limited liability partnership agreement
6. Payment by partners of investments specified in agreement
7. Application to the Legal Affairs Bureau for registration of LLP, registration of partnership seal with the Legal Affairs Bureau
8. Acquisition of certificate of registered information and partnership seal registration certificate (approx. two weeks after application for registration)
9. Opening of bank account under partnership name
(Note) Time required: about one month after determination of profile of partnership to be established
1) This profile should contain information including the following: name of partnership, location of business establishment, business objectives, business year, names of members and their investments, date of entry into effect of the LLP agreement, and period of existence.
(Jetro "How to Set Up Business in Japan" http://www.jetro.go.jp/)
Ishiwari Accouting Office
Ishiwari CPA office is a professional service firm which has provided a wide range of accounting, financial and tax consulting services to clients since 1990's. Our philosophy is to build close relationships with clients, meet each business needs and help them to achieve business objects by offering tailored solutions to our clients at the reasonable fee. We provide wide ranges of services including, Accounting, Tax advisory services, Business Startup & IPO support, Financial and Management Consulting, Payroll and Social insurance, and outsourcing services to both Japanese companies and Non-Japanese International companies.
Ishiwari CPA office provides services with Japanese and American companies operating in Japan. We are committed to provide the highest quality of professional services in order to add values to your business operations.
Name of office; Ishiwari CPA Office
Address; Takanawa OS Bldg 6F, 3-19-20 Takanawa, Minato-ku, Tokyo 108-0074, Japan
Phone; +81-3-3442-8004
A branch office may begin business operations after registering its establishment with the Legal Affairs Bureau; branch offices of foreign companies must register in accordance with the registration requirements for Japanese corporations of most similar form to that of the foreign company. In order to select the most similar form of Japanese corporations and to determine the information to be registered, reference should be made to the foreign company's articles of incorporation, establishment certificate, registration certificate, and other such documentation. Once the details of the branch office to be registered—the address of the branch office, the representative in Japan, the date of establishment of the branch office and the disclosure method for balance sheets—are determined, the information that must be registered can be ascertained.
Document(s) certifying the information to be registered must be submitted when applying for registration of the establishment of a branch office, and the certified document(s) must be issued by the competent authorities in the home country of the foreign company. It is often convenient to use an "affidavit" on information for registration certified by that country's embassy/consulate in Japan 1).
General flow of procedures for establishing a branch office
1. Determination of branch office information to be registered
2. Examination at the Legal Affairs Bureau of similar corporate names
3. Establishment of branch office (date of branch office establishment is at the branch office's discretion)
4. Preparation of affidavit on establishment of branch office
5. Certification of affidavit by embassy/consulate in Japan 1)
6. Application to the Legal Affairs Bureau for registration of branch office establishment; registration of company seal with the Legal Affairs Bureau
7. Acquisition of certificate on registered information and company seal registration certificate(approx. two weeks after application for registration)
8. Opening of bank account under branch office name
(Note) Time required: about one month after determination of branch office information to be registered
1) If your embassy does not provide notary services, certification by a public notary in your home country is required.
1.3.2 Registration of establishment of a subsidiary company
Subsidiary companies are established through registration with the Legal Affairs Bureau. The application date for registration will also be the date of establishment, and the company may carry out business operations from that date. Some of the documents needed for the subsidiary establishment procedures should be prepared in the home country of the foreign company: document(s) certifying the profile of the foreign company, document(s) certifying the representative authority of the foreign company's representative and document(s) certifying the authenticity of the signature of the foreign company's representative.
The foreign company's articles of incorporation, establishment certificate, registration certificate and other official documents as well as an affidavit notarized by a notary public in the home country of the foreign company are ordinarily used. These documents will be required in completing the procedures for certifying the subsidiary company's articles of incorporation in Japan. These documents may also be needed when requesting a financial institution in Japan to take custody of the subsidiary's capital and issue a capital custody certificate. The capital custody certificate is a certificate issued by a financial institution when the full amount of the subsidiary's capital has been remitted to a special account specified by the financial institution asked to take custody. The certified articles of incorporation and the capital custody certificate will both be needed when applying for registration of company establishment.
General flow of procedures for establishing a Kabushiki-Kaisha (joint-stock corporation)
1. Determination of profile of joint-stock corporation to be established 1)
2. Examination at the Legal Affairs Bureau of similar corporate names
3. Preparation of joint-stock corporation's articles of incorporation
4. Acquisition of registration certificates, etc. for parent company, and preparation of affidavits regarding profile of parent company and affidavits regarding signatures of representatives of parent company (affidavits must be attested by a public notary in equity participants' own countries) 2)
5. Notarization of joint-stock corporation's articles of incorporation by Japanese notary public
6. Application to bank for capital custody and issue of capital custody certificate 3)
7. Remittance of joint-stock corporation capital to special bank account
8. Appointment of directors and other officers, such as representative directors and auditors
9. Examination by directors and auditors of legality of establishment procedures
10. Application to the Legal Affairs Bureau for registration of joint-stock corporation establishment (joint-stock corporation establishment date); registration of company seal with the Legal Affairs Bureau
11. Acquisition of certificate on registered information and company seal registration certificate(approx. two weeks after application for registration)
12. Opening of bank account under company name
13. Notification of stock acquisition to the Bank of Japan
(notification prior to company establishment may be required in certain sectors)
(Note) Time required: about two months after determination of profile of company to be established
1) This profile should contain information including the following: trade name, location of head office, business objectives, business year, amount of capital, issue price of shares, existence of provisions restricting transfer of shares, existence of board of directors, names of directors and representative directors, terms of directors, names of equity participants, and values of their investments.
2) If an individual or corporation with an address in Japan is the promoter of a joint-stock corporation and a foreign enterprise is the underwriter of shares in that corporation when it is established (such a situation is called a "formation with outside offering," or Boshû Setsuritsu), affidavits regarding the parent companies may not be required.
While in this case shares issued when the joint-stock corporation is established are shared by the promoter and foreign enterprise, the joint-stock corporation may be made a 100% subsidiary of the foreign enterprise by subsequently transferring the shares held by the promoter.
3) If a joint-stock corporation is incorporated with the joint equity participation of an individual or corporation with a bank account in Japan, it may not be necessary to apply to a bank for capital custody and issuance of a capital custody certificate. In this case, it is sufficient for the capital to be paid into the joint equity participant’s bank account in Japan, and for documentary evidence to be submitted by the representative director of the joint-stock corporation in place of a bank-issued capital custody certificate in order to certify that payment of the full amount of capital has been received.
General flow of procedures for establishing a Godo-Kaisha (LLC)
1. Determination of profile of Godo-Kaisha to be established 1)
2. Examination at the Legal Affairs Bureau of similar corporate names
3. Acquisition of certification regarding equity participants (in equity participants' own countries):
Acquisition of registration certificates, etc. for companies that will become equity participants, and preparation of affidavits regarding profiles of companies that will become equity participants and affidavits regarding signatures of representatives of companies that will become equity participants (affidavits must be attested by a public notary in equity participants' own countries)
4. Acquisition of certification regarding equity participants (in Japan):
Acquisition of registration certificates for companies that will become equity participants
Acquisition of seal certificates for individuals/companies that will become equity participants
5. Preparation of Godo-Kaisha's articles of incorporation
6. Payment by members of investment stipulated in articles of incorporation
7. Application to the Legal Affairs Bureau for registration of establishment of Godo-Kaisha (Godo-Kaisha establishment date), registration of company seal with the Legal Affairs Bureau
8. Acquisition of certificate of registered information and company seal registration certificate (approx. two weeks after application for registration)
9. Opening of bank account under company name
10. Notification of stock acquisition to the Bank of Japan (notification prior to company establishment may be required in certain sectors)
(Note) Time required: about one month after determination of profile of company to be established
1) This profile should contain information including the following: trade name, location of head office, business objectives, business year, amount of capital, names of members (equity participants) and values of their subscriptions, names of representative members, and names of executive officers (representative members in the case of a corporation).
Registration of establishment of limited liability partnership
A limited liability partnership is formed when two or more individuals or corporations conclude a limited liability partnership agreement, pay the investment specified in the agreement, and register the entity thus established. As the law does not describe in detail how LLPs should operate, unlike in the case of joint-stock corporations, details are laid down in LLP agreements. Accordingly, finalizing the content of the LLP agreement is the most important stage in the process of establishment of an LLP. Furthermore, as a partnership must be established in partnership with an individual resident in Japan or a Japanese corporation, several documents need to be prepared in both Japan and the country of the foreign party.
General flow of procedures for establishing a limited liability partnership
1. Determination of profile of LLP 1)
2. Examination at the Legal Affairs Bureau of similar corporate names
3. Acquisition of certification regarding partners (in partners' own countries):
Acquisition of registration certificates, etc. of companies that will become partners, and preparation of affidavits regarding profiles of companies that will become partners and affidavits regarding signatures of representatives of companies that will become partners (affidavits must be attested by a public notary in partners' own countries)
4. Acquisition of certification regarding partners (in Japan):
Acquisition of registration certificates of companies that will become partners
Acquisition of seal certificates of individuals/companies that will become partners
5. Conclusion of limited liability partnership agreement
6. Payment by partners of investments specified in agreement
7. Application to the Legal Affairs Bureau for registration of LLP, registration of partnership seal with the Legal Affairs Bureau
8. Acquisition of certificate of registered information and partnership seal registration certificate (approx. two weeks after application for registration)
9. Opening of bank account under partnership name
(Note) Time required: about one month after determination of profile of partnership to be established
1) This profile should contain information including the following: name of partnership, location of business establishment, business objectives, business year, names of members and their investments, date of entry into effect of the LLP agreement, and period of existence.
(Jetro "How to Set Up Business in Japan" http://www.jetro.go.jp/)
Ishiwari Accouting Office
Ishiwari CPA office is a professional service firm which has provided a wide range of accounting, financial and tax consulting services to clients since 1990's. Our philosophy is to build close relationships with clients, meet each business needs and help them to achieve business objects by offering tailored solutions to our clients at the reasonable fee. We provide wide ranges of services including, Accounting, Tax advisory services, Business Startup & IPO support, Financial and Management Consulting, Payroll and Social insurance, and outsourcing services to both Japanese companies and Non-Japanese International companies.
Ishiwari CPA office provides services with Japanese and American companies operating in Japan. We are committed to provide the highest quality of professional services in order to add values to your business operations.
Name of office; Ishiwari CPA Office
Address; Takanawa OS Bldg 6F, 3-19-20 Takanawa, Minato-ku, Tokyo 108-0074, Japan
Phone; +81-3-3442-8004
Types of operation in Japan
Foreign companies generally establish a business presence in Japan in one of four modes.
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.
2. Branch office
Foreign companies wishing to engage in business operations in Japan must establish a branch office or a subsidiary company. 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.
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 (LLC)), or similar entity stipulated by Japan's Corporate Law. Both unlimited partnerships (Gomei-Kaisha) and limited partnerships (Goshi-Kaisha) are granted corporate status under the Corporate Law, 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.
4. Limited liability partnership (LLP)
It is also possible to do business by using a Yugen Sekinin Jigyo Kumiai. This type of entity, considered the Japanese version of a limited liability partnership (LLP), is not a corporation, but a partnership formed only by the equity participants, who have limited liability.
LLPs are also distinguished by the fact that internal rules can be freely determined by agreement between the equity participants, and that taxes are levied on profits allocated to equity participants without LLPs themselves being liable for taxation.
Ishiwari Accouting Office
Ishiwari CPA office is a professional service firm which has provided a wide range of accounting, financial and tax consulting services to clients since 1990's. Our philosophy is to build close relationships with clients, meet each business needs and help them to achieve business objects by offering tailored solutions to our clients at the reasonable fee. We provide wide ranges of services including, Accounting, Tax advisory services, Business Startup & IPO support, Financial and Management Consulting, Payroll and Social insurance, and outsourcing services to both Japanese companies and Non-Japanese International companies.
Ishiwari CPA office provides services with Japanese and American companies operating in Japan. We are committed to provide the highest quality of professional services in order to add values to your business operations.
Name of office; Ishiwari CPA Office
Address; Takanawa OS Bldg 6F, 3-19-20 Takanawa, Minato-ku, Tokyo 108-0074, Japan
Phone; +81-3-3442-8004
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.
2. Branch office
Foreign companies wishing to engage in business operations in Japan must establish a branch office or a subsidiary company. 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.
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 (LLC)), or similar entity stipulated by Japan's Corporate Law. Both unlimited partnerships (Gomei-Kaisha) and limited partnerships (Goshi-Kaisha) are granted corporate status under the Corporate Law, 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.
4. Limited liability partnership (LLP)
It is also possible to do business by using a Yugen Sekinin Jigyo Kumiai. This type of entity, considered the Japanese version of a limited liability partnership (LLP), is not a corporation, but a partnership formed only by the equity participants, who have limited liability.
LLPs are also distinguished by the fact that internal rules can be freely determined by agreement between the equity participants, and that taxes are levied on profits allocated to equity participants without LLPs themselves being liable for taxation.
Ishiwari Accouting Office
Ishiwari CPA office is a professional service firm which has provided a wide range of accounting, financial and tax consulting services to clients since 1990's. Our philosophy is to build close relationships with clients, meet each business needs and help them to achieve business objects by offering tailored solutions to our clients at the reasonable fee. We provide wide ranges of services including, Accounting, Tax advisory services, Business Startup & IPO support, Financial and Management Consulting, Payroll and Social insurance, and outsourcing services to both Japanese companies and Non-Japanese International companies.
Ishiwari CPA office provides services with Japanese and American companies operating in Japan. We are committed to provide the highest quality of professional services in order to add values to your business operations.
Name of office; Ishiwari CPA Office
Address; Takanawa OS Bldg 6F, 3-19-20 Takanawa, Minato-ku, Tokyo 108-0074, Japan
Phone; +81-3-3442-8004
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