Discover the Types of Corporations in Japan with InvestJapan.com

Learn about the different types of businesses that exist in Japan and get a better understanding of your own options. On Invest Japan.com you'll find summarized explanation of the foreign enterprises allowed in Japan and decide which one is the best for your needs.

Japan is a highly organized country and you will find that your business runs smoother there if it fits the preexisting conventions. Overseas companies that wish to conduct their affairs in Japan should make the time and decide what category their businesses fall into. There are four main groups any enterprise can fit into, and which a few rare exceptions, they include all possible cases.

Different Options for Businesses in Japan

Foreign companies generally establish a business presence in Japan in one of the four following models.

Companies that Open a Branch office in Japan

Branch office is a very popular option for most overseas companies that are dealing in Japan. It is easier than establishing a subsidiary company and has some undeniable advantages. As soon as the location of a branch office is fixed, it is immediately allowed to operate (assuming registration process was properly accomplished). Branch offices in Japan, while limited from legal point of views, are permitted to open bank accounts and lease any real-estate they require for their operation.

From a legislative point of view, branch offices in Japan have no real corporate status, but are instead included in the corporate status of the overseas company they belong to. As such, the "mother company" is liable for any debts. A Japanese branch office, however, may open bank accounts and lease real estate in its own name.

Temporary Option: Representative offices

International companies that wish to conduct preliminary evaluations and tests of their potential Japan-based business are advised to do so using a representative office. The purpose of these is t evaluate rather a certain enterprise should engage in activities in Japan and prepare for operations. These types of offices are not allowed to sale products or even open a bank account. They are, however, allowed to buy merchandise, run surveys and conduct marketing experiments. The real advantage of a representative office and what makes it so popular for foreign companies is the fact that it needs no registration.

Parent Companies Opening Subsidiary companies

The definition of a subsidiary company is simply putting it a business that is controlled by another separate business entity often referred to as "Parent Company". All types of subsidiary companies in Japan can be established by following the preconditions specified by the Japanese law and then registering. The liability for the parent company is this case is that of an equity participant.

Limited liability partnerships

The Japanese style of limited liability partnerships is not a corporation, but more like a legal partnership established only by the equity participants. These participants are liable, but in a limited level only. There is also a difference in taxation in this possible case.