Branch Registration
1. Overview
“Branch Registration” refers to the registration of a Japan Branch of a foreign company. Since a “Branch” is not a subsidiary it is not legally recognized as having independent corporate status, and is treated merely as an extension of the foreign company. Accordingly, credits and liabilities resulting from the activities of the branch ultimately belong to the foreign company. A branch is permitted to open bank accounts and lease real property under the branch name.
One of the features of a branch is that the setup procedures are somewhat simpler than for the incorporation of a subsidiary. By designating a Japan Representative, setting up an office location (if necessary), and registering other necessary information with the Legal Affairs Bureau of Japan, it is possible to commence business activities Japan.
When setting up a branch, while it is not absolutely necessary to rent office space, in most cases an office is rented. Since the procedures for registering a branch regardless of whether office space is rented or not are essentially the same, for the sake of simplicity, this website will refer to both cases simply as “Branch Registration.”
2. Branch Registration Procedures
For a foreign company to commence business activities in Japan, a Japan Representative must be designated and then registration of the foreign company is required. More than one Japan Representatives may be designated, however at a minimum one of them must be a resident of Japan.
Matters such as the location of the head office, business purposes, capital, composition of officers, the name and address of the Japan Representative and the location of the Japan Branch of the foreign company must be registered.
The following briefly summarizes the steps required to register a branch. To manage expectations, it is generally advised to expect the process to take approximately four weeks from commencement to the completion of registration.
- 1. Resolution of Foreign Company
A resolution made by the foreign company for the registration of a branch in Japan, designation of the Japan Representative etc. A resolution of the Board of Directors is most common. - 2. Branch Registration
Based on the decisions of the foreign company, establish a base of operation in Japan. Designate the Japan Representative and address, and rent an office if office space is required. At this point the preparations to commence business in Japan are complete; however, until conclusion of the registration of the foreign company, business activities are not permitted. - 3. Registration of Foreign Company
Register a basic summary of the foreign company, the name and address of the Japan Representative, branch address and other matters with the Legal Affairs Bureau of Japan. - 4. Commencement of Business Activities
Business activities may be commenced from date of registration. Can open a bank account and submit necessary notifications to the tax and social insurance offices once registration is complete.
3. Necessary Documents
Generally speaking, the following documents are required for Branch Registration.
Documents to verify the matters to be registered with the Legal Affairs Bureau and notarized by government authorities, Notary Public or consular office in the country the foreign company is located must be submitted.
Some examples could include, Articles of Incorporation, incorporation certificates, Annual Reports, Board of Director resolutions for the selection of the Japan Representative, and appointment letters. Documents written in foreign languages must be translated to Japanese.
Information about the foreign company to be registered with the Legal Affairs Bureau include the trade name, head office location, the law under which the foreign company was incorporated, capital amount, number of shares issued, names and address of company officers and others and the collection of documents describing all of the above matters can be a time consuming and difficult.
Therefore, in practice, an Affidavit containing the above information and notarized by a Notary Public or consular office is permitted as an alternative method. As part of our Branch Registration service, we will draft the required Affidavit; however, we will require copies of the Articles of Incorporation of the foreign company and other documents which form the basis of the Affidavit.
In Japan it is customary to use seals rather than a signature on official documents. Therefore, an imprint of the seal of the Branch Representative will need to be registered with the Legal Affairs Bureau. To do this, a branch seal is required. We can order the necessary seals for our clients. The cost of seals can vary considerably depending on the material used to make the seal.
The registered personal seal certificate of the Japan Representative is also needed to register the branch seal. For foreign nationals who have not registered a personal seal with their local government office, a Signature Certificate may be used as an alternative. The Signature Certificate must be notarized by a Notary Public or consular office.