Management Consulting & Administrative Legal Services
Japan "One-Stop Solution" "Since 1993"
Branch office, KK, GK, Company Registration, Tax, Social Insurance etc.
Japan Branch Office verses (vs) Subsidiary Company Registration, Incorporation, Formation. Difference between Setting-up and Opening of a branch office and Subsidiary Company (Kabushiki-Kaisha [KK] or Godo-Kaisha [GK]) of a foreign company in Japan.
Some Basic differences between Opening a Branch Office and a Subsidiary Company of a foreign corporation in Japan
In terms of the range of business activities allowed, there are no basic differences between branch office and domestic corporation. But regardless of the firm being foreign or not, some companies, depending on the category of business, are required to secure authorization of the supervisory ministries at the time of founding.
A Branch office is not regarded as an independent legal entity, but as acting on the basis of decisions and instructions from the parent company (head office) to provide services and carry out business activities, including purchasing, importing, and sales etc. In transactions with other businesses, the branch office concludes contracts as the representative of its parent company (head office).
Some major differences between Opening a Branch Office and a Subsidiary Company (Kabushiki-Kaisha [KK] or Godo-Kaisha [GK]) of a foreign corporation in Japan
Either a branch office or a domestic corporation may enter into business activities by its own name as a legal business entity. Tax rates are also fundamentally same for a branch office and a domestic corporation. However, the differences are in the following areas:
Local “Resident in Japan": Branch must have a "local resident in Japan" out of the max. two "Representative in Japan" that is allowed for registration. However, in case of a local “subsidiary co." as mentioned below under new law effective Mar'15 it is no more mandatory to have “a local “resident” director” in case of K.K. co. & “Member / Executive Officer” in case of G.K. co. But in case of a G.K. co. the investor must be an overseas corporation!
Time-frame for registration: For procedure please refer to registration flowchart of Branch Office and Kabushiki-Kaisha [KK] Co. & Godo-Kaisha [GK] Co. Upon applying at Legal Affairs Bureau for registration it takes about 2(two) weeks to obtain the registration certificate.
Note: re exception allowed for “subsidiary co.” since the change of regulation effective Mar'15.
Japanese govt. has allowed foreign co. to register a local subsidiary co. (Kabushiki-Kaisha [KK] or Godo-Kaisha [GK]) in Japan without a local “Resident in Japan”. [In case of GK Co. the overseas investor must be a corporation]
But in both cases, it would require a temporarily a local “Resident in Japan” for the purpose of completing the procedure of paid-up capital for KK Co. & equity for GK Co.
In case of a KK Co. a “local resident shareholder” & in case of a GK Co. a “local resident member (equity holder)”.