Structures to do business in Japan
You have several ways to do businesses in Japan depending on the nature of your business. For most of foreign companies, subusidiary is recommendable option.
There are two types of companies with limited liability in Japan. The most popular one is Kabushiki Kaisha (KK) and the other one is Godo Kaisha (GK).
KK is Japanese joint stock corporation.
GK is Japanese limited liability company. GK is similar to partnership also.
There are more types of companies, such as unlimited partnership, and limited liability partnership and the like. But actually they are not used so much.
Foreign companies can do business with their registered branch. Doing continuous business without registered branch is illegal under Japanese laws, if they do business under the name of foreign company.
Branch registration requires a representative who is Japanese or lives in Japan with long term visa status, and registered office.
Generally speaking branch office is not so recommendable if it’s not required for some reasons, because of parent company’s unlimited liability, and applicable international taxation. Normally accounting fee will be higher than that of domestic subsidiaries.
If your company doesn’t do continuous business activities, representative office will be one of your choice. Normally it is difficult for representative offices to sponsor visa applications of employees. So it is recommendable to hire a Japanese citizen to let them handle things in Japan.
The activities allowed to do for representative office are limited to the followings:
- Providing information to parent company
- Advertising and publicity
- Marketing research
- Basic research
- Purchasing and safe-keeping of assets for parent company