みなと国際会計事務所 Accounting Intelligence blog by a CPA in Tokyo

みなと国際会計事務所 Accounting Intelligence blog by a CPA in Tokyo, tax tips, accounting, running business

Opening up a branch or starting a company in Japan

time 2017/01/29

It is not difficult to open up a branch or a company here in Japan now a days.

To open a branch

You need to appoint a Japan resident as the representative person of the branch. This person has to be a resident of Japan but his or her nationality does not matter. This person does not have to be a Japanese.

You need to have an affidavit that includes information of the headquarter company such as:

company name,
established date in home country,
address,
capital,
name of director,

and information that are related to its Japanese operations such as:

office address of the Japan office,
date of establishing the branch,
name of the representative person,
method of public notice (gazette or web).

Based on the above information, you need to prepare application form. The template and sample are available in the ministry’s website.

Ministry of Justice website

The other document required is a seal certificate, if this representative is a Japanese or resident with his seal registered or she is not Japanese nationality without his seal registered,

The registration tax is 90,000 Japanese yen and fee to be paid to lawyers or accountants are in average 100,000 to 150,000 yen.

It will take approximately 10 business days to process and complete the registration by the government. It is very simple, isn’t it?

Tax consideration – corporate tax

The tax implication is different between setting up a branch and a corporation. A branch is a part of the company that will create the branch in Japan. Therefore, all the loss or income will be taken into account for your tax calculation in your home country (HQ). In another word, it will be consolidated. On the other hand, if it is a company (subsidiary), it is a legally separate entity. Tax calculation is to be done separately. Expenses or income incurred by the subsidiary should not affect P and L of the parent company until dividends are paid.

Consumption tax

Then you may want to think about consumption tax implication. As a default, small and medium sized corporations (SMEs) are not required to file for consumption tax. But in certain particular situations, this is not the option for you. By becoming a tax filer of consumption tax, you may benefit by getting refund.

Here are more detailed information.