FAQ

February 23, 2016

Are non-compete clauses legal in Japan?

The Japanese Constitution protects the freedom of choice of employment. Therefore, within limits, people should be able to work for whatever company they want.
February 23, 2016

What is the difference between a Representative Office and a Branch Office?

Establishing a Representative Office is perhaps the simplest way to establish your company’s presence in Japan. A Representative Office allows a foreign company to conduct market surveys, collect information, purchase goods and conduct PR campaigns. However, Representative Offices are not allowed to engage in sales activities. Forming a Representative Office does not require registration but many aspects of business, such as opening a bank account or renting office space, must be conducted by the head office of the foreign company or the head of the Representative Office acting in an individual capacity.
February 23, 2016

What type of business is the best option for establishing a subsidiary in Japan?

There are several choices for foreign companies wishing to establish a subsidiary in Japan. One possible choice is the Joint-Stock Corporation (Kabushiki Kaisha). Kabushiki Kaisha are publicly traded companies and hence, the representative need not be a member of the Kabushiki Kaisha. The liability of members is limited to their contributions in capital, and transfers of shares may be made freely, notwithstanding restrictions in the Articles of Incorporation.
February 23, 2016

What are the options for establishing a partnership in Japan?

A Gomei Kaisha is the Japanese equivalent of a general partnership. The partners represent the company and therefore any transfers of equity are subject to unanimous approval by all partners. Unlike general partnerships in other countries, Gomei Kaisha are incorporated, rather than contracted into. Hence, “pass‐through taxation” is unavailable, and partners cannot escape double taxation via profits and dividends.