Who is the Representative of a Foreign Company in Japan? Differences from Japanese Corporations, Requirements, and Registration Methods Explained

When a foreign company starts a business in Japan, it must appoint a representative for its activities in Japan. However, not just anyone can be a representative. The appointed representative must meet legal requirements.

The key points of this article are as follows:

his article summarizes the procedures required for a foreign company to start activities in Japan. It also introduces the rules regarding representatives and bases in Japan.

By understanding the conditions for activities in Japan, a smooth business start becomes possible. Please take a look.

1.How can a foreign company start a business in Japan?

There are two main methods for a foreign company to conduct business in Japan: establishing a subsidiary, or setting up a business office in Japan to operate directly without establishing a local company.

A foreign company is defined as a corporation established outside of Japan and operating under the laws of that country. To directly conduct business in Japan, the foreign company must appoint a representative in Japan.

Here, we will provide a detailed explanation of the key points necessary for a foreign company to conduct business in Japan.

2.Representative of a Foreign Company in Japan

A representative in Japan refers to the person responsible for representing the operations of a foreign company within Japan and exercising its authority. The representative has the authority to sign contracts and documents in the name of the foreign company and conducts transactions and legal procedures within Japan.

2-1. Qualifications of a Representative in Japan

It is common for a representative of a foreign company in Japan to be an individual who has a residence in Japan. Japanese citizenship is not required, so a foreign national can also be appointed as a representative. However, since the representative holds a crucial position with legal responsibilities, reliability and suitability are essential qualities.

2-2. Role of a Representative in Japan

The main roles of a representative in Japan are as follows:

• Act on behalf of the foreign company for all operations within Japan and hold the necessary authority.
• Sign and execute contracts and legal procedures based on Japanese law.
• Facilitate smooth communication with the foreign headquarters and coordinate operations.
• Comply with legal obligations and protect the company’s interests.

As the responsible person representing the foreign company’s operations in Japan, the representative must take appropriate actions to safeguard the company’s interests.

When appointing representatives for each location within Japan

Even if a foreign company with multiple locations in Japan appoints a representative for each location, each representative has full authority regarding all judicial and extrajudicial matters related to operations in Japan.

Even if internal regulations impose restrictions on the authority of each representative, these restrictions cannot be asserted against third parties who are unaware of such limitations.

2-3. Selection and Modification of Representatives in Japan

A foreign company selects and modifies its representative in Japan based on the company law of its home country and the rules stipulated in the foreign company’s articles of incorporation.

The foreign company specifies the name, address, and duties of the appointed or modified representative. These details are compiled into an affidavit, which is then submitted to the Legal Affairs Bureau for the registration of the foreign company.

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3.Requirements for a Foreign Company to Establish a Business Office in Japan

When a foreign company starts business in Japan, it must meet the following three requirements:

• Appoint a representative in Japan
• Apply for the registration of the foreign company
• Disclose its financial status

We will explain each requirement and the conditions for establishing a business office in Japan.

3-1. Appointing a Representative in Japan

To conduct business activities in Japan, at least one representative in Japan is required. This representative can be an individual or a corporation, and it is also possible to appoint a professional such as a lawyer.

In principle, the representative in Japan applies for the registration of the foreign company. However, if it is difficult for the representative to handle the registration, it is possible to request a judicial scrivener to apply on their behalf.

It is Common to Establish a Business Office in Japan

While a foreign company can start business in Japan simply by registering the foreign company without setting up a business office, it is generally common to establish a business office in Japan to conduct business activities.

3-2. Applying for the Registration of a Foreign Company

A foreign company cannot conduct business activities in Japan without registration. Before starting business in Japan, the foreign company must apply for registration.

If the foreign company does not establish a business office in Japan, the registration is based on the address of the representative in Japan. Specifically, the registration of the foreign company is carried out at the address of the representative in Japan. On the other hand, if the foreign company establishes a business office in Japan, the registration is based on the address of that office. Specifically, the registration of the foreign company is carried out at the address of the business office in Japan.

As mentioned later, corporate registration can also be applied for online.

3-3. Disclosing Financial Status

When conducting business activities in Japan, if the foreign company is equivalent to or most similar to a joint-stock company (Kabushiki Kaisha) in Japan, it is required to disclose a balance sheet or its equivalent without delay after approval at the annual general meeting of shareholders or the conclusion of similar procedures.

In such cases, when registering, it is necessary to indicate the method of disclosing the balance sheet (such as the web page address). Therefore, be prepared to provide this information.

4.Requirements for a Representative of a Foreign Company in Japan

When a foreign company operates in Japan, it must appoint a representative in Japan. The representative must meet the following conditions:

• At least one representative must have a residence in Japan.
• The representative can be either an individual or a corporation.

We will explain each of these conditions in detail.

4-1. At Least One Representative Must Have a Residence in Japan

When conducting business in Japan, it is necessary to appoint a representative. There is no specific requirement regarding the number of representatives.

At least one of the representatives must have a residence in Japan. While it is not required for this representative to reside in Japan, having a residential address in Japan is a condition.

4-2. Individual or Corporation

The representative in Japan can be either an individual or a corporation. It is also common for professionals such as lawyers to serve as the representative in Japan.

Address Requirements for Corporations

If a corporation serves as the representative in Japan, the following requirements must be met:

• A joint-stock company (Kabushiki Kaisha), a membership company (Godo Kaisha, etc.), a general incorporated association, or a general incorporated foundation that has its head office or principal business office in Japan.
• A foreign company registered in Japan.
• For a foreign company not registered in Japan: It will not be recognized unless the representative has a residence in Japan.

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5.Registration Procedure for the Representative of a Foreign Company in Japan

When a foreign company starts business activities in Japan, corporate registration is required. The corporate registration can be done either online or in writing.

5-1. Registration Items

When registering a foreign company, the following items must be registered:

• The governing law under which the foreign company was established
• The name and address of the representative in Japan
• If the comparable or similar company in Japan is a joint-stock company (Kabushiki Kaisha), the method of public notice as stipulated by the governing law
• If the balance sheet is disclosed electronically, the web page address where the equivalent information of the balance sheet is posted
• The method of public notice (if electronic public notice, the web page address)

5-2. Applicant

The application for corporate registration is generally carried out by the representative in Japan, not the representative in the home country. However, if the representative is unable to carry out the procedure, a proxy such as a judicial scrivener can also handle the application.

5-3. Required Documents

For the registration of a foreign company, the following documents must be submitted:

• A document indicating the existence of the head office
• A document indicating the qualifications of the representative for activities in Japan
• A document indicating the nature of the articles of incorporation or equivalent document of the foreign company
• A document indicating the method of public notice
• If the registration procedure is conducted by a proxy, a document indicating the proxy’s authority

All of these documents must be certified by the competent authority in the home country of the foreign company or by the consulate or embassy of the home country in Japan.

Affidavit Preparation

Generally, an affidavit is prepared and submitted by the representative in the home country or the representative in Japan.

However, if the governing law of the foreign company provides that employees or other individuals have the authority to certify the registration items of the foreign company, it may be accepted by submitting a translation of the relevant governing law along with the affidavit.

Affidavit Preparation Agencies

Documents submitted for the registration of a foreign company must be certified by the competent authority in the home country or by a consulate or other authorized official in Japan (Commercial Registration Act, Article 129, Paragraph 2).

Specifically, the affidavit must be prepared by the following agencies:

• The competent authority in the home country (the authority responsible for the registration of the foreign company in its home country or jurisdiction of incorporation)
• A notary public in the home country
• A consulate of the home country in Japan

It should be noted that the affidavit required for the registration of a foreign company will not be accepted if it is certified by a consulate of the home country in the representative’s country of residence. The procedure must be completed either in the home country or at the consulate of the home country in Japan.

6.Summary

This article explained the key points that a foreign company should know before starting business activities in Japan. In summary, the content is as follows.

At least one of the representatives in Japan must have a residence in Japan, but the business base for conducting business does not need to be within Japan. However, to conduct business activities in Japan, corporate registration and the disclosure of financial status are required.

Additionally, the representative in Japan can be a corporation as well as an individual. To facilitate smooth procedures in Japan, a law firm or similar entity can serve as the representative in Japan. If you are uncertain about the procedures, it is advisable to consult a judicial scrivener office that is well-versed in the Japanese business operations of foreign companies.