Foreign Company Registration Summary! Differences with Foreign Corporations

Foreign companies must register when conducting business activities in Japan.

The key points of this article are as follows:

In this article, we have summarized important information for foreign companies conducting business in Japan. We cover the definition of a foreign company, registration procedures, and more.

Understanding the necessity of registration and the process flow will enable smoother business activities. Please take a look.

1. What is a Foreign Company?

A foreign company refers to a company, or an entity similar to a company, that is established under foreign laws and regulations, rather than Japanese laws. When a foreign company begins business activities in Japan without establishing a company under Japanese laws, it must appoint a representative for its activities in Japan. Additionally, at least one of these representatives must have an address in Japan.

As mentioned later, foreign companies are required to register before starting business activities. The registration of a foreign company must be completed within three weeks from the time the representative for activities in Japan is appointed. If the representative is appointed abroad, the registration must be completed within three weeks from the date the Japanese representative becomes aware of their appointment.

1-1. Differences from Foreign Corporations

A foreign corporation is an entity established under foreign laws. This term not only includes foreign companies as described above but also encompasses a wide range of entities such as foreign public interest corporations, religious corporations, foundations, administrative divisions (such as states), and other types of corporations. Essentially, any corporation not established under Japanese laws falls under the category of a foreign corporation.

1-2. Differences from Domestic Corporations

A domestic corporation refers to a general corporation established under Japanese laws, such as the Companies Act. When establishing a new subsidiary in Japan as a local entity of a foreign corporation, it becomes a domestic corporation in accordance with Japanese laws. However, if a foreign corporation sets up a branch office in Japan, it is treated as a foreign corporation.

Furthermore, when a foreign company begins business activities in Japan, it must appoint at least one representative with an address in Japan. In contrast, domestic companies do not have this requirement. Even if none of the representatives have an address in Japan, the domestic corporation can still conduct business activities in Japan as long as it is registered.

1-3. Differences from Foreign-Affiliated Companies

Foreign-affiliated companies refer to enterprises where overseas companies enter the Japanese market and conduct business. There are two main forms of foreign-affiliated companies: one involves acquiring shares of an existing Japanese company through investment, and the other involves establishing a new subsidiary.

Legally, these companies are treated as domestic corporations established under Japanese law, not as foreign corporations. However, since they are financed and operated by foreign investors or corporations (foreign capital) rather than Japanese investors, they are called “foreign-affiliated companies.”

A “foreign corporation” is established under foreign laws, while a “domestic corporation” is established under Japanese laws. These classifications are based on the laws governing the corporation, whereas “foreign-affiliated companies” are classified based on who provides the capital.

In many foreign-affiliated companies, the parent foreign corporation has significant influence. This influence often extends to the company culture, such as the corporate atmosphere and evaluation systems, which are strongly influenced by the parent company.

2. Registration Obligation of Foreign Companies Under the Companies Act

The Companies Act stipulates that foreign companies must register when conducting business activities in Japan. Therefore, even if a foreign company establishes a base in Japan, it cannot operate within the country until it completes the registration of the foreign company.

Foreign company registration is conducted at the Legal Affairs Bureau. Note that the bureau to which you apply depends on whether the foreign company has a branch office in Japan.

2-1. When There is a Branch Office in Japan

If there is a branch office in Japan, the registration procedure is carried out at the Legal Affairs Bureau that has jurisdiction over the branch office. Additionally, the application for corporate registration can be done online. Proceed with the registration procedure in accordance with the methods of similar or analogous companies in Japan.

2-2. When There is No Branch Office in Japan

If there is no branch office in Japan, the registration procedure is conducted at the location of the representative in Japan. If the representative is a corporation, carry out the registration procedure at the location of the corporation’s office.

Contact

3. Foreign Company Registration Procedures

When a foreign company operates in Japan, it is necessary to register the corporation at the appropriate time. This section explains the content of the registration procedures, required documents, application deadlines, and fees.

3-1. Registration Details

When a foreign company registers in Japan, the following details must be registered:

• The governing law under which the foreign company was established (foreign law)
• The name and address of the representative for business activities in Japan (either an individual or a corporation)
• If the company has a form similar to a Japanese corporation, the method of public notice according to the governing law
• If the company has a form similar to a Japanese corporation and discloses its balance sheet online, the web address where the balance sheet can be viewed
• The method of public notice. If there is no regulation, it must be stated that the public notice will be published in the official gazette
• If the method of public notice is electronic, the web address where the contents of the notice can be viewed

3-2. Applicant

The registration procedure for a foreign company must be carried out by the representative in Japan. An overseas representative cannot be the applicant, even if they reside in Japan.

3-3. Required Documents

A corporate registration application form must be submitted. Unless applying online, the applicant or the applicant’s agent must sign and seal the form.

If there is no seal, a signature can be used as a substitute. However, when using a signature, a certificate from the competent authorities in the home country (signature certificate) proving the authenticity of the signature must also be submitted.

Additionally, the following documents must be submitted with the corporate registration application form:

• Documents proving the existence of the head office of a foreign company
• Documents proving the qualifications of the representative in Japan
• Documents equivalent to the articles of incorporation of a foreign company (documents showing the business content and nature of the foreign company)
• Documents indicating regulations on the method of public notice (not required if there are no regulations)
• If an agent is applying for corporate registration, documents proving the agent’s authority

All of the above documents must be authenticated by the competent authorities in the home country of the foreign company or by the Japanese consul or other competent authorities. Additionally, when attaching documents created in a foreign language, in principle, a Japanese translation of all such documents must also be attached.

When applying for registration of a business office or a representative in Japan, if minutes of the shareholders’ meeting or board of directors’ meeting of the foreign company (authenticated by the competent authorities in the home country of the foreign company or by the Japanese consul or other competent authorities) are attached, only the parts related to the registration of the business office or representative in Japan need to be translated, and translation of unrelated content can be omitted.

3-4. Application Deadline

The corporate registration of a foreign company must be completed within three weeks after establishing a business base in Japan or appointing a representative in Japan.

However, if the representative in Japan is unaware of their appointment as a representative, the corporate registration must be completed within three weeks from the time they become aware of their appointment.

3-5. Fees (Registration and License Tax Amount)

The corporate registration fee (registration and license tax amount) for a foreign company varies depending on the form of the business establishment.

When the name or address of the representative in Japan, or the business content, changes, the registration details must also be updated. In such cases, a change registration procedure is required. Note that payment of the registration and license tax is also required for change registration.

Reference: National Tax Agency “No.7191 Registration and License Tax Amount Table”

Contact

4.Summary

This article explained important information that foreign companies need to know when conducting business activities in Japan.

In summary, the contents are as follows:

Foreign companies must register when conducting business activities in Japan. Even without a business office in Japan, timely registration is required.

If the registration process is challenging, select a reliable person or agent to handle it. Missing the appropriate timing can complicate registration and may restrict business activities in Japan.