The choice between a representative office or branch office is important to understand before making the decision to establish a base of operations in Japan. 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.
Establishing a Branch Office in Japan allows a foreign company to engage in business in Japan while maintaining the simplicity of keeping all decisions and responsibility within the foreign company. A Branch Office’s location must be registered and may open bank accounts and rent property in its name, but it is not considered a separate business entity. Rather, the Branch Office is treated as an extension of the foreign company and the foreign company remains directly responsible for all debts and credits generated by the Branch Office in Japan.
If you have any questions about the choice to establish a representative office or branch office or about setting up a business in Japan, please contact our office for a legal consultation with one of our lawyers.