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Guide to Starting Shitenn (Branch) in Japan

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Guide to Starting Shitenn (Branch) in Japan

Unless otherwise indicated, the Japan Shitenn stated in this guide refers to a branch formed and incorporated in Japan in accordance with the Japan Companies Act. The foreign company refers to the company that incorporated a foreign country, and it is a profit seeking company.

Summary

If the foreign company would like to set up a base in Japan in order to continue their business activities, they could choose to establish a Japan Shitenn (Japan Branch). Japan Shitenn is not an independent legal person and Japan Shitenn existing under and belongs to a foreign headquarter. However, the Japan Shitenn could open the bank account and sign a lease agreement by the name of the Japan Shitenn.

The Japan non-resident could not register a Japan Shitenn, the representative of Japan Shitenn must have a residential address in Japan. Therefore, if the representative of Japan Shitenn is a foreigner, the representative should have the legal status of residence in Japan.

For the incorporation of the Japan Shitenn, the investor needs to provide the Articles of Associations, registration documents (Such as business license, etc.) of the headquarter, the headquarters’ documents shall be notarized at the registered place of the headquarter and it may require to translate into the Japanese language based on the actual situation.

Our guide had specified the information, documents, and materials required for the foreign companies to register a Japan Shitenn.

1.
Documents and materials required to prepare by Foreign Headquarter

(1)
Elect the representative of Japan Shitenn


The representative of the Japan Shitenn could be the Japanese or the foreigner. However, according to the Japan Companies Act, the representative of the Japan Shitenn must have a residential address in Japan. Therefore, if the representative of Japan Shitenn is a foreigner, the representative should have the legal status of residence in Japan.


(2)
Decide the location of the Japan Shitenn

The registration of Japan Shitenn will require a Japan address as the registered address. The virtual office address or the physical address could use for the company registration. However, for the registration of the company, if the company is using a virtual office address, it is a low possibility to open a corporate bank account. Therefore, the client shall discuss with the consultant to decide whether to rent a virtual office address or a physical office before the registration of the Japan Shitenn.


(3) Resolution of the Headquarter to set up a Japan Shitenn

It is a big investment for the foreign headquarter to set up a Japan Shitenn, therefore, the board of directors of the foreign headquarters shall prepare a resolution regarding the establishment of the Japan Shitenn.


(4)
Certification of the Documents of the Japan Shitenn

For the incorporation of the Japan Shitenn, the foreign headquarter will need to provide the registration documents (such as business license, etc.) and the Articles of Associations of the foreign headquarter, the documents shall notarize at the notary office that the headquarter registered place. According to the registration requirements, some of the documents may require translating into the Japanese Language.


(5) The Identification Documents of the Japan Shitenn

The representative of the Japan Shitenn will need to provide their passport copy and the personal seal certificate. If the representative of the Japan Shitenn is a foreigner stay in Japan, they shall provide a passport copy and the signing certificate which equivalent to the personal seal certificate. The signature certificate shall notarize at the notary office of the foreigner’s location.

2.
Procedure for the Registration of Japan Shitenn

(1)    Preliminary check of company name and confirmation of the business scope
(2)    Preparation and certification of the affidavit of the foreign headquarter and the Japan Shitenn (The affidavit of the headquarter shall notarize at the notary office that the headquarter registered)
(3)    Preparation of the Letter of Appointment Acceptance for the representative
(4)    Preparation of the registration form and submit the registration of Shitenn at the Legal Affairs Bureau
(5)    Obtaining a copy of registration form and a seal certificate
(6)    Submit the filing notice to the city government, National Tax Agency and local tax authority
(7)    Opening a bank account with the name of Japan Shitenn

After the procedures are all completed, the Japan Shitenn could start to operate.

3. Procedure to handle the Taxation, Social Insurances, Visas for the Japan Shitenn

(1) Taxation

Japan Shitenn belongs to a part of the foreign headquarter, it will operate business activities according to the working capital of the headquarter, therefore, the expenses in Japan shall burden by the foreign headquarter. The Japan Shitenn shall prepare a separate financial statement and consolidate with the foreign headquarter. The Japan Shitenn could not decide the accounting period, the accounting period of the Japan Shitenn will same as the foreign headquarter.


(2)
Social Insurance

Although the Japan Shitenn belongs to a part of the foreign headquarter, but the Japan Shitenn still a company setting up in Japan, so the Japan Shitenn has the obligation to join the social insurance.


(3) Visa

The Japan Shitenn is considered one of the business offices of the foreign headquarter, therefore the visa applied for the representative or the employees, usually regarded as an Intra-company Transferee Visa. Basically, the representative or employees of the Japan Shitenn could also apply for the Business Management Visa based on the specific situation. The result of the visa application is depending on the judgment of the Immigration Services Agency of Japan. The client is recommended to consult an expert in advance.

A series of the procedures is required from the registration of Japan Shitenn to the accounting service and the tax declaration, it is complicated for the client who first entering Japan. If necessary, Kaizen could provide a one stop service, from the registration of Kabushiki Kaisha, application of Intra-company Transferee Visa, accounting, and bookkeeping service until tax declaration services. Kaizen had the industry experience for about 17 years, Kaizen is a team which provides the services of company formation and registration and has the qualification of CPA in Japan, China, Hong Kong, Singapore, United States, Australia, United Kingdom, etc. or the elite team experts compared to the CPA. Kaizen will do the best to provide professional and high quality services to the client. Please contact us for further consultation.

Reference:

1. Guide to Starting a Kabushiki Kaisha in Japan
    https://www.kaizencpa.com/Knowledge/info/id/610.html

2. Guide to Starting a Goudou Kaisha in Japan
     https://www.kaizencpa.com/Knowledge/info/id/612.html

Download: Guide to Starting Shitenn (Branch) in Japan [PDF]

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