Sarkar Office Japan KK

Sarkar Office Japan KK

Management Consulting & Administrative Legal Services
Japan "One-Stop Solution" Since 1993
Branch office, KK, GK, Company Registration, Tax, Social Insurance, etc.
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Sarkar Office Japan

Japan Branch versus Subsidiary Company

Japan Branch Office versus (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

There are no fundamental differences between the branch offices and domestic corporations regarding the range of business activities allowed. 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 the founding.

A branch office of a foreign company carries commercial transactions in Japan as per the parent company's decision/instruction and usually is not expected to independent decision-making.

Japan "One-Stop Solution" "Since 1993"

Opening Branch Office in Japan

A Branch office is not regarded as an independent legal entity but as acting based on decisions and instructions from the parent company (head office) to provide services and carry out business activities, including purchasing, importing, sales, etc. In transactions with other businesses, the branch office concludes contracts as its parent company (head office).

Difference between Branch Office and Subsidiary Company in Japan

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.

KK, GK Incorporation without Japan Resident

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 the same for a branch office and a domestic corporation. However, the differences are in the following areas:

  • A new management body need not be set up for a branch office, and there is no detailed statutory requirement for the management of a branch office. While a domestic corporation must have statutory officers or a management body such as directors, auditors, the board of directors meetings, and shareholders meetings, a branch does not require to do so but only needs a Representative in Japan.
  • Dividends paid by a domestic corporation to a foreign shareholder are subject to withholding tax. In contrast, remittance of branch profits after tax to its head office is not subject to withholding tax.
  • The head office some expenses may be allocated to its branch if it is spent for branch purpose.
  • Interest or royalty paid by the head office for activities of its branch may be deducted by its unit, although such interest or royalty is subject to withholding tax.
  • Local “Resident in Japan": Branch must have a "Local Resident in Japan" out of the maximum of two "Representative in Japan" that is allowed for registration. However, in the case of a local “Subsidiary Company" as mentioned below under new law effective March'2015, it is no more mandatory to have “A Local Resident” Director” in the case of K.K. co. and “Member / Executive Officer” in case of G.K. co.

Time-frame for registration: For the procedure, please refer to the registration flowchart of the Branch Office and Kabushiki-Kaisha [KK] Co. & Godo-Kaisha [GK] Co. Upon applying to Legal Affairs Bureau for registration, it takes about 2(two) weeks to obtain the registration certificate.

Note: The exception is allowed that "No Local Resident in Japan" is required as a mandatory requirement for registration of a “subsidiary company” since the change of regulation effective Mar'2015.

Japanese govt. has allowed foreign companies to register a local subsidiary company(Kabushiki-Kaisha [KK] or Godo-Kaisha [GK]) in Japan without a local Resident in Japan."

Option regarding the formation of a legal business entity in Japan for ongoing commercial activities:  The choice is either to establish a “Branch Office” or a local “Subsidiary Co. (Kabushiki-Kaisha or Godo-Kaisha)." 

For further information please contact us by mail. Contact Sarkar Office Japan KK

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