Closing a Branch Office in Japan

Branch Office Closing Procedure and Steps. Closure Registration Certificate. Resignation of all Representatives in Japan. Tax Office and other Statutory Requirements.

The procedures for Closing a Branch Office are required when upgrading a branch office to a subsidiary company. A branch office cannot be directly reorganized into a joint-stock corporation (Kabushiki-Kaisha {K.K.}) or a limited liability company (Godo-Kaisha {LLC}).

The Steps and Procedure for Closing a Branch Office in Japan:

The official legal procedure for closing a branch operation in Japan is to apply with the Legal Affairs Bureau. Upon receiving the branch closure registration certificate, the final statement of accounts and reporting must be made to the tax offices in Japan.

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The below-mentioned procedures are required to close a legal branch office entity of a foreign company in Japan.

A public notice must be published in the Official Gazette for creditors. After the public notice, creditors must have at least one month to submit any objections.

Branch Office Closure Registration in Japan

Basic Flow of procedures for closing a Branch Office (legal entity) in Japan.

1. The decision regarding the closure of the branch and the resignation of all Representatives in Japan by the foreign company (Parent Co/Head Office).

2. Call a meeting for creditors individually regarding objections (if any) for branch office closure. Also, a public notice must be published in the Official Gazette for creditors.

3. Creditors must be given a minimum of one month after the public notice to submit any objections.

4. Must submit Notification to Tax authorities.

5. Ascertainment of residual property (if any).

6. Branch office closure procedure (at least one month) after the above closure notice.

7. Preparation of the Affidavit regarding the closure of the branch office (legal entity) and the resignation of all Representatives in Japan.

8. Attestation of the Affidavit in the embassy or consulate in Japan or at the Notary Public office in the parent company's home country.

9. Application for the branch office closure with the Legal Affairs Bureau to register the closure.

10. Obtaining the branch closure registration certificate from the Legal Affairs Bureau (it takes approx. two weeks from the date of application).

11. Closing of bank accounts. Final accounts and BSPL need to be prepared, and all taxes (all dues) need to be paid for the branch's closure in Japan. Notify tax authorities of branch office closure, etc.

Branch Closing and Upgrading to a Subsidiary Company: The above procedures for closing a branch office must be completed when upgrading a branch office to a subsidiary company. Because a branch office cannot be directly reorganized into a joint-stock corporation (Kabushiki-Kaisha {KK}) or a Limited Liability Company (Godo-Kaisha {GK}, LLC), the branch office closure procedures and the subsidiary company establishment procedures must be carried out simultaneously. However, in such instances, the branch office's assets may be passed on to the subsidiary through investment in kind.

For the time frame, please refer to the Branch Closing Registration flowchart.

For further information, please contact us by mail.