About the method that a foreigner establishes the company in
- ☆Regulatory reform makes it easy to establish a company.
As the residence status of “Investor/Manager ”（投資・経営：とうし・けいえい） is
replaced by the residence status of “Manager/Administrator ”（経営・管理：けいえい・かん
り） from April 1, 2015, requirements of acquisition of the new residence status is also
relaxed. (*1 )
1. A foreigner can apply for the residence status of "Manager/Administrator " (residence period four months) before the company establishment.
2. A foreigner does not have to prepare for the investment of 5 million yen alone.
<*1 > In Japan, the foreigner acquiring the residence status such as “Permanent Resident
"（永住：えいじゅう）, “Spause or Child of Japanese National "（日本人の配偶者等：にほん
じんのはいぐうしゃとう）, "Spause or Child of Permanent Resident "（永住者の配偶者等：え
いじゅうしゃのはいぐうしゃとう）, "Long-term Resident "（定住者：ていじゅうしゃ） does
not have working restrictions.
- ☆Procedures to establish a company in Japan.
1. Firstly, when a foreigner establishes a company in Japan, it is necessary to acquire
aresidence status of "Manager/Administrator "（経営・管理：けいえい・かんり）.
An applicant or an agent makes articles of incorporation of the company and get it
authenticated as official at a notary public office. Then, he/she attaches the articles of
incorporation and performs the application procedure of the residence status of
"Manager/Administrator "（経営・管理：けいえい・かんり）with the period of four months
and acquire the residence status. (*2 )
<*2 > The Immigration Bureau examines whether there are stability and continuity of the
business, and whether there is the actual situation of the business activity in Japan.
2. Secondly, the foreigner acquires a residence card by a residence status of
"Manager/Administrator " （経営・管理：けいえい・かんり）and shows this and open
a personal bank account.(*3 )
<*3 > In the residence periods less than three months, he/she cannot open a bank
account in Japan.
3. Thirdly, at the same time that the foreigner reports the place of residence to the
office of the nearest city and district municipalities, he/she may as well prepare
the seal impression beforehand and register it on this occasion.
Documents with regard to the registration of incorporation of the company like a
document certifying that the director of the company has accepted the assumption of
office have to attach the seal impression and a seal certificate.
4.Fourthly, the foreigner decides the principal office to register with regard to the
registration of the company. Because it is not easy for a foreigner to conclude a real
estate contract, he/she is able to perform the registration of incorporation of the company
by using a rental office or a virtual office temporarily. In this case it is desirable to
change the registration of incorporation when he/she was able to obtain an appropriate
5. Fifthly, when the foreigner starts the business in Japan it is essential to confirm before
the registration of incorporation of the company whether the authorization by the
Japanese administration (the police, public health center, the metropolis and districts)
is necessary or whether the organization system conforms to the requirements
providedbylaws and regulations by industry group. (*4 )
<*4 > In the case of the production dealership of pharmaceutical products, it is necessary
to maintain the placement of the persons in charge of both the quality management and
the vigilance management and to administer the organization for this purpose.
6. Sixthly, the foreigner pays the capitalto the bank account and prepares for the
balance certificate (a copy of the bank book). (*5 )
A foreigner attaches the required documents mentioned above and performs the
application procedures of the registration of incorporation of the company in the
local Legal Affairs Bureau.
At the same time he/she registers the seal impression of the company. (*6)
<*5> The foreigner does not have to prepare for the investment of 5 million yen now.
<*6> Upon the arrival of an Application at the offices of an administrative agency, the
agency shall commence its review of the Application without delay.
And unless an Application conforms to requirements that the entries of the written
application be completed, that the written application be attached by necessary
documents, that the Application be filed within a specified period of time, or to other pro
forma requirements provided by laws and regulations, the agency shall promptly either
request the persons who filed the Application toamend the Application, specifying
considerable period of time to make such amendment, or refuse the permission, etc.
sought by the Application.
7. Seventhly , after procedure completion (approximately two weeks later), the foreigner
acquires a certificate of all the registered matters of the company and the
certificate of seal impression of the company and opens an account in the
name of company in a bank.
Furthermore, he/she goes to each public administration office (a tax office, a Labor
Standards Inspection Office, a Hello Work (a Public Employment Security Office) and
a pension office) having jurisdiction over the address of the company and performs a
report of the company establishment and other necessary business formalities.
A series of procedures of the establishment of the company is finished in this way.
- ☆Three kinds of organizations called a subsidiary company, an overseas
office or a representative office
- 1. When a foreign company (corporation established abroad) goes into Japan
and is going
to perform business activities there, according to Foreign Exchange and Foreign
TradeControl Act,the commercial law or the company law, they can consider
three kinds of organizations called a subsidiary company, an overseas office or
a representative office to carry out investment in Japan.
- 2. When a foreign company (corporation established abroad) performs business
with either three kinds of base forms mentioned above in Japan, it is necessary to
investigate beforehand whether the prior or subsequent report based on each
businesslaws andregulations is need.
When the foreign company needs to perform a prior report to the Bank of Japan,
it cannot establish a subsidiary company or an overseas office after a report for at least
Therefore, especially, in the case of a subsidiary company or an overseas office, it is
essential to confirm through the Bank of Japan whether the prior report to the
Minister ofFinance and a Minister having jurisdiction over the business
concerned is needed according to Foreign Exchange and Foreign Trade Control Act.
- 3.There is a concept to be used in international tax practice called the “PE“ (permanent establishment)(*7).
The "PE", which is the abbreviation of the word "permanent establishment", points to the
constant "place", "facilities", "function" or "bases" that is used when each three kinds of
organization performs business activity in Japan.
Regarding the income of the business of an organization, if the organization does not own
the "PE" in Japan , neither the income tax collected at the source nor the corporation tax
is levied at all. This is also a world common rule of taxation.
Therefore, a subsidiary company and an overseas office perform profit-making activity,
because they are defined as the organization which owns “PE”. On the other hand, a
representative office cannot perform profit-making activity because it is defined as the one
which does not own “PE”.
<*7> A permanent establishment (PE) is a fixed place of business which generally gives
rise to income or value added tax liability in a particular jurisdiction. The term is defined in
many income tax treaties and most European Union Value Added Tax systems. The tax
systems in some civil law countries impose income and value added taxes only where an
enterprise maintains a PE in the country. Definitions of PE under tax law or tax treaty may
contain specific inclusions or exclusions.(from the free dictionary)
- 4. The activities of the representative office are restrictive. Then the
establishing the representative office are relatively simple. (*8)
However the requirements on establishing a subsidiary company or an overseas office are
complicated and similar to a normal process of establishing the company except Company
name and Capital. With regard to the registration of incorporation of the company
thepreparationof the affidavit(*9) is essential.
<*8> Because the representative office does not own PE, it cannot make profit in
business. The contents of activity which are permitted are as follows. They are the
reporting to the company of the own country, advertising, a marketing research, a basic
investigation and the asset purchase and safekeeping.
<*9> An affidavit is voluntarily made without any cross-examination of the affiant and,
therefore, is not the same as a deposition, a record of an examination of a witness or a
party made either voluntarily or pursuant to a subpoena, as if the party were testifying in
court under cross-examination.(from the free dictionary)
- 5. When a foreign company (corporation established abroad) receives a certification
articles of incorporation at a notary public office of Japan for the purpose of establishing a
subsidiary company or an overseas office, the company has to prepare for the document
regarding establishing the company (like a certificate of the establishment of the
company, a certificate of all the registered matters of the company or
a business license), and the affidavit about the company profile which is issued in the
government office (a notary public office) of the own country and the certificate of the
signature of the companyrepresentative.
(When the parent company in Japan establishes a subsidiary, the company has to prepare
for a certificate of registered matters of the company and its seal certificate.)
- 6. The summaries of the difference in the operation in Japan of three base
forms of a
subsidiary company, an overseas office and the representative office are as follows.(*10)
<*10> The summaries of the difference in the operation in Japan of three base forms of a
subsidiary company, an overseas office and the representative office
Overseas Office representative
Necessary Necessary Unnecessary Company
Unlimited (*11) Parent company 's
Unlimited (*11) Election of
(One or more
directors live in
(One or more
employees live in
(One or more
employees live in
Capital Necessary (More
than 1 yen )
Unnecessary Unnecessary Bank Account Company name Company name Representative's
The same as a
Relaxed Not performed
Possible Possible Impossible (*8) Account
The same as a
Depends on the
- Remittance to
Possible Possible - Lawsuit
(or Debt and
Not retroactive to
company of the
own country as a
Retroactive to the
parent company of
the own country
The same as a
The same as a
- <*11> Registration of the Identical Trade Name at the same location