Open a Subsidiary in Japan

A subsidiary in Japan represents an independent entity set up according to the Japanese legislation, with a foreign entity owning its shares. 

 

The foreign entity may be the sole shareholder of the subsidiary in Japan, though it may be possible to have other shareholders as well, be it an individual or a company, local or foreign. 

 

In this article, our company formation advisors in Japan present you with the main aspects of setting up a subsidiary in this country.

Subsidiaries in Japan are generally set up as a Kabushiki Kaisha (KK), which represents a joint stock entity, or a Godo Kaisha (GK), which is a limited liability entity.

 

Subsidiaries are perceived as offering more security in the local market compared to other types of entities because of their status as a Japanese company. Our company registration representatives in Japan can offer more details on this matter.

 

A subsidiary in Japan can be structured as a separate business with active connections to the parent company.

 

A subsidiary in this country has more legal authority to act independently and may assume liabilities and responsibilities separate from the parent company.

In order to open a KK subsidiary in Japan, the following criteria have to be met:

 

Documents needed to open a subsidiary in Japan

No matter the type of structure employed for the Japanese subsidiary, the parent company must prepare and file the following documents with the Trade Register:

•      -    the application form issued by the local office of the Trade Register in Japan;
•      -    the parent company’s statutory documents and certificate of incorporation;
•      -    the letter of appointment of the subsidiary’s directors and their acceptance letters;
•      -    the notification of the Japanese company’s seal, also known as inkan;
•      -    the incorporation documents of the subsidiary which must be notarized.

 The company registration process of the subsidiary can take up to 4 weeks.

Why open a subsidiary in Japan?

Setting up a subsidiary in Japan has several advantages, among which:

• -       the company can undertake different activities than the parent company;
• -       it will be treated as a tax resident company in Japan;
• -       it can benefit from Japan’s network of double tax treaties;
• -       the Japanese subsidiary is allowed to have non-resident directors.

 

The subsidiary is subject to the local tax laws, including those applicable in case of the Japan consumption tax.

 

If you would like to know more about starting a business in Japan or would like to open a Japanese subsidiary, we kindly invite you to contact our Japan company formation professionals.