A representative office is established as a location for carrying out preparatory and supplemental tasks enabling foreign companies to engage in full-scale Japan business operations. The establishment of representative office does not require official registration or formalities. You may conduct market survey, collect information, purchase goods and advertise but must not engage in sales activities. Further, the representative office cannot open bank accounts or bind a legal contract in its own name.
A foreign company wishing to engage in sales activities in Japan must establish a branch office or subsidiary company. After appointing a branch manager who is a resident having a legitimate address in Japan, the branch office is permitted to engage in business operations by registering at local Register Office. The branch may open bank accounts and bind a legal contract in its own name. The branch does not have its own legal corporate status but is treated as the same of corporation in terms of the tax filing.
All types of subsidiary companies are established by following the legal procedures stipulated by Japan Corporation Law. The subsidiary is independent from the foreign company (parent company) meaning the foreign company must bear the liability of an equity participant stipulated by law for all debts and credits generated by the activities of the subsidiary. All subsidiary companies must join social security system when the entity starts to employ in Japan.
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