Acknowledged PE Risk of Representative Office

I heard that the representative office has a risk of PE accreditation. Specifically, what kind of risk is it? The PE accreditation in Japan poses a taxation risk such as corporate tax. ★ Explanation ★ PE stands for Permanent Establishment and in Japanese is called 「恒久的施設」(kōkyū-teki shisetsu). A Permanent Establishment is a certain place where…


Possibility of Bank Account by a Representative Office

Can a representative office open its own bank account? If a representative office wishes to open bank account, it cannot be named under the representative office itself. As such, it should be under the personal account of the Representative Director of the office. ★ Explanation ★ Though a representative office in Japan cannot perform sales…


Employing Workers for a Representative Office

Can a representative office hire employees? If so, do they qualify for insurance? A representative office may hire employees in Japan. In theory, this means the employed individuals would be employed by the foreign company. Also, they are qualified to avail of insurance. ★ Explanation ★ Representative offices are allowed to hire employees, and have…


Representative Office’s Public Documents

Can the existence of a representative office be confirmed through public documents? The existence itself of a representative office in Japan cannot be proven through public documents. ★ Explanation ★ Compared to a “Japan subsidiary” and “Japan branch office” (both registered entities in accordance with Japanese law), a representative office in Japan does not undergo…


Commercial Registration for a Representative Office

When establishing a representative office, do we need to register it with the legal affairs bureau? There is no need to register the establishment of a representative office. ★ Explanation ★ The representative office may perform its activities, which include collecting information, conducting market research, advertising, and buying/storing goods, etc., freely in Japan without having…


Reduced Consumption Tax Rates and the Point Reward Project for Cashless Payments

Introduction It has been quite some time already since Japan increased its consumption tax rates to 10% starting October 1, 2019. Together with the increase in tax rates is the introduction of the “Reduced Consumption Tax System” and the “Point Reward Project for Cashless Payments”. With these two new schemes, consumer’s purchasing patterns can vary,…


Activities of a Representative Office

What kind of activities can a representative office perform in Japan? A representative office can collect information, conduct market research, advertise and buy and store goods, etc. However, it cannot perform directly any business activities. ★ Explanation ★ A representative office generally performs tasks with the purpose of preparing and supplementing for the actual, full-scale…


Costs of Setting-up a Branch Office in Japan

What are the costs when setting-up a Japan branch office? The registration and license tax levied during the registration cost either 60,000 JPY or 90,000 JPY. ★ Explanation ★ The costs of establishing a branch office in Japan varies depending on whether the foreign company will set-up a business office or not. If only a…


Pseudo-foreign Companies

What is a pseudo-foreign company? It is a foreign company with a head office in Japan. ★ Explanation ★ A foreign company is a corporation or other foreign organization established in accordance with foreign laws and regulations, and is considered to be the same as or similar to companies (Companies Act 2-2). Companies Act (Definitions)…


On Establishing More than One Business Office

Can a foreign corporation have several business offices in Japan? Yes. ★ Explanation ★ There are no limits placed on the number of business offices that can be set-up. When a foreign company with an existing business office in Japan will set-up another business office in Japan, they will need to register this new location…