How to register a branch-office in Japan
In the previous section about using a Japanese branch-office to start business in Japan, we noted that many of our clients decide to incorporate a KK kabushiki kaisha, often after independent in-depth evaluations of Japan’s available business entities. Although the number is rapidly declining, some clients do decide to register a Japanese branch-office because it seems simpler to administrate. You must however carefully consider the tax and accounting issues associated with tax-efficiently managing a Japanese branch-office before proceeding. For those who think that administrating a branch-office in Japan is easier than administrating a Japanese company, be aware that if those of your company’s details needed when it registers the branch-office in Japan later change, it must register such changed details within 60 days: that can create an administrative nightmare.
- Motion of the Board of Directors
Your company’s Board of Directors, or comparable authorized officer, must pass a written motion or consent to register a branch-office of your company in Japan.
- Appointment of the Japanese Branch-Office’s Representative
Your company must appoint a Japanese or foreigner resident in Japan as the representative of its Japanese branch-office.
- Representative’s Affidavit
The branch-office’s representative manager must create the Representative’s Affidavit in Japanese and notarize it at the embassy or consulate of the your company’s head-office country. Alternatively, your company’s authorized officers can notarize it. If the document is bilingual, only the Japanese text has legal effect. To create and support the Representative’s Affidavit, the representative manager needs the following information and documents:
- Company Name
The Japanese branch-office’s name will be the same as your company’s name, so Venture Japan LLC’s branch-office in Japan would be named “Venture Japan LLC”.
- Articles of Incorporation and By-Laws
The representative will need a notarized copy of your company’s current Articles of Incorporation and By-Laws (or equivalent), together with a Japanese translation.
- Certificate of Incorporation
The representative will need a notarized copy of your company’s current Certificate of Incorporation, together with a Japanese translation.
- Authorized Shares, Issued Shares and Paid-In Capital
The Japanese branch-office’s representative manager will need details of the numbers of your company’s authorized shares and issued shares, and the current amount of its paid-in capital.
The representative will need the registered name and address of each of your company’s directors. The name and address of each director is public record. Each director should take legal advice about the joint and several liabilities of directors of Japanese companies.
- Details of Other Branch-Offices
The Japanese branch-office’s representative manager will need details of all other branch-offices your company has registered elsewhere in the world.
- Scope of Business
The representative will need details of the Japanese branch-office’s proposed business. A branch-office in Japan can only do the specific business described in the Representative’s Affidavit; the business must also appear in your company’s Articles of Incorporation or By-Laws. The Japanese branch-office can later change its scope of business by filing a revised notarized Representative’s Affidavit together with a revised copy of your company’s Articles of Incorporation or By-Laws reflecting the change.
- Registered Office Address
A Japanese branch-office must have a registered office address in Japan where it can receive official documents.
- Date of Establishment
The representative needs to know the date the branch-office started business in Japan, which is up to 21 days before the date of filing the Representative’s Affidavit.
- Financial Year
A Japanese branch-office’s financial year can start on any day of the year and end within 12 months of starting. Its first financial year must end within 12 months of its date of registration.
- Company Name
- Representative Seal
The representative of a branch-office in Japan must have a seal registered for use on the company’s official documents. The Japanese government registers the representative seal in the representative’s name, thus only he or she can legally apply it to documents. The branch-office’s representative must apply his or her registered personal seal to the application for registration of the representative seal. If the representative manager is not Japanese and does not have a registered personal seal, then he or she must sign the application and provide a notarized evidence of signature.
After notarization of the Representative’s Affidavit, he or she must file it, together with the translated copies of your company’s current Articles of Incorporation, By-Laws and Certificate of Incorporation, and the Registration of Representative Seal document, at the Bureau of Legal Affairs in the area where the branch-office has its registered office. At this point the branch-office legally exists since its date of establishment, but its name will not appear on the official Company Register for 7 – 10 days.
- Receipt of Certificate of Incorporation and Representative Seal ID Card
7 – 10 days after filing, the branch-office’s representative can collect the branch-office’s Certificate of Registration and the Representative Seal ID Card, from the Bureau of Legal Affairs in the area where the branch-office has its registered office.