B i
Business
S
Sett up iin JJapan
2012 February
Jimmy Ng
Special Investment Advisor
©2012 JETRO
[Types of Operations]
1. Representative office
2 B
2.
Branch
h Offi
Office
3. Subsidiary Company
-
Kabushiki-Kaisha (joint-stock corporation)
-
G d K i h (li
Godo-Kaisha
(limited
it d liliability
bilit company (LLC))
4. Limited liability partnership (LLP)
©2012 JETRO
[Types of Operations]
Rep Office
Branch
KK
LLP
×
○
○
○
Registration
-
○
○
○
Capital
p
-
-
1y
yen or more
2y
yen or more
Representative
Director
-
Branch Representative
At least 1
No legally stipulated
Director
-
-
At least 1
Corporate auditor
-
-
1 or more may be
appointed
co e subject to
Income
corporate tax
-
Domestic
o est c sou
source
ce
income
Global
G
oba income
co e
Accounting
-
Aggregation with income
in home country required
Completed by accounting of Japanese partnership
Taxation of
repatriated funds
-
No taxation of
repatriated funds after
payment of corporate tax
Taxation at source of dividends,
dividends interest
and royalties
Lawsuits
-
Extend to corporation in
home country
Time required for
establishment
-
3 – 4 weeks
Business Activity
4 – 6 weeks
2 – 3 weeks
[Types of Operations]
Rep Office
Branch
Subsidiary (KK)
LLP
•Not a legal entity
•Not subject to Japanese
income taxes and no filing of
income tax returns
•Loss can be off set from the
HQ’s income.
•Common expenses
accrued in HQ can be
allocated to a branch office a
long as the charges are at
arm’s length.
g
•Remittance of profit to HQ
is not subject to Japanese
withholding income tax.
•Easier to open bank accounts /
rent offices
•When parent company files tax
returns in home country, no
profit/loss from KK will be added
to the parent company’s turnover
•No foreign
g tax credit will be
applied to the parent company.
•All liabilities are contained within
the KK, and the parent company
is not affected.
•Not necessary to have
board meetings
•Responsibility of
membership is limited
•Profit can be distributed
according to voluntarily
determined rate
•Net loss can be
deducted from individual
members’ taxable
income
•NOT allowed to engage in
any commercial transactions
•Activities
Activities are restricted to
storing; purchasing goods;
collecting and supplying
information for HQ;
advertising; market research.
•Internal charges (internal
interest or royalties) are not
allowed to charge to branch
•Not as good as a KK in
terms of recruitment and
consumer image
•More difficult to open bank
accounts and to rent offices
•When HQ file tax returns in
home country, a profit /loss
from branch will be added to
the HQ’s turnover.
• A subsidiary’s loss cannot be off
set from the parent company’s
income.
•Remittance of profit is treated as
dividend, and is subject to
Japanese withholding income tax.
•Directors’ bonuses are not
deductible expenses under
Japanese corporate tax law.
•Cannot be a publicity
traded entity
•Not
Not allowed to changed
to KK
•All membership must
participate in the
business
•Not easy to obtain bank
financing
P
Provide
id advice
d i on market
k t entry
t
©2012 JETRO
[Starting Business operation in Japan]
©2012 JETRO
[Initial Cost Estimation (in Tokyo)]
KK
Short-term housing and temporary office
(3-month rent, temporary office & housing)
Obtaining visas
Company establishment and tax notices
Branch
5,560 - 16,670 (7,698 ~ 23,082)
2,500 (3,462)
1,950 (2,700)
64,340 (89,086)
6,110 (8,460)
(include
(i
l d 5 million
illi Y
Yen ,
S$76,923 Paid in Capital)
Hiring local personnel (one local manager
with 10 million Yen annual compensation)
33,330 (46,149)
(30% commission fees to recruitment agent)
Setting up a permanent office
39,270 (54,374)
Setting up permanent housing
(for foreign national)
11,120 (15,397)
TOTAL
156,120 - 167,230
(216,166 ~ 231,549)
97,340 - 108,450
(134,778 ~ 150,162)
All figures shown in $US; $US1.00=JPY90 (S$1.00 = JPY65)
©2012 JETRO
[Comparison in other business regions]
As of August 2010
©2012 JETRO
[JETRO: Introduction]
JETRO, or the Japan External Trade Organization, is a government-related
organization that works to promote mutual trade and investment between Japan and
the rest of the world.
Originally established in 1958 to promote Japanese exports abroad, JETRO's core
f
focus
in
i the
th 21
21stt century
t
h
has shifted
hift d ttoward
d promoting
ti foreign
f i direct
di t iinvestment
t
t iinto
t
Japan and helping small to medium size Japanese firms maximize their global
export potential.
The JETRO representative office in Singapore today actively encourages foreign
companies to invest and do business in Japan while supporting the efforts of
Japanese small and medium
medium-sized
sized enterprises (SMEs) in the region
region.
©2012 JETRO
[JETRO Global Network]
Overseas Offices: 73 (55 countries)
With more than 70 overseas offices in over 50 countries, JETRO provides companies around
the world with a direct link to business in Japan. And JETRO offices located throughout Japan
make it easyy for foreign
g firms to g
get timely
y and accurate information about specific
p
regions,
g
markets and prefectural incentive programs.
©2012 JETRO
[How does JETRO help]
Invest Japan Business Support Center(IBSC)
©2012 JETRO
[How does JETRO help]
Invest Japan Business Support Center(IBSC)
Consulting Services
● Market advice
● Laws and regulations
Facilities
● Free temporary office spaces
● Well
Well-stocked
stocked library
● National and local government incentives
● Cost simulation
● Incorporation procedures
● Employment and labor issues
¾S
¾Support
t for
f participation
ti i ti in
i domestic
d
ti exhibitions
hibiti
©2012 JETRO
● Multipurpose hall & conference rooms
¾Window to Japan Local Authorities & Government’s
Incentive Schemes
¾Wide Range of Information Resources
-Market Reports
-Statistics
Statistics
-Regional Information
¾Recent Investment from Singapore Supported by JETRO
©2004 JETRO
„
More than 300 Singaporean companies
utilized JETRO’s support & services.
We can help you start a business in Japan
CONTACT US!!
Tel: 6221-8174,
7
Email: [email protected]
©2012 JETRO