There are several choices for foreign companies wishing to establish a subsidiary in Japan: 1. Establishment of a Subsidiary Company 2. Establishment of a Branch Office 3. Registration of a Representative Office.
If you are planning on conducting business in Japan, the best choice is often 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.
Articles of incorporation are needed whenever incorporating a company in Japan. These Articles list absolute matters, which are required by law, and relative matters, which are not required but often included for clarity. Some examples of absolute matters are the purpose, trade name, place of principal office, value of assets and name and address of the company’s promoters. This list of requisite absolute matters will differ depending on the type of company being incorporated.
When a foreign joint stock corporation registers in Japan, it must provide the following information: corporate name, location of head office, business purposes, method of giving public notice, total number of shares to be issued, types and numbers of outstanding shares, rules on the limitation of transfer of shares, amount of capital, directors, representative directors, auditors, and date of company establishment.
If you only need to set up an office in Japan for market research purposes, the easiest method is to register a representative office. Otherwise, if you plan to do business in Japan but do not want to establish a separate corporate entity, establishment of a branch office may be the best option for you.