B i
Business
S
Sett up iin JJapan
12 March 2013
Jimmy Ng
Special Investment Advisor
©2013 JETRO
Types of Operations in Japan
©2013 JETRO
1. Representative office
2 B
2.
Branch
h Offi
Office
3. Limited liability partnership (LLP)
4. Subsidiary
y Company
p y
-
Kabushiki-Kaisha (joint-stock corporation)
-
G d K i h (li
Godo-Kaisha
(limited
it d liliability
bilit company (LLC))
©2013 JETRO
[Types of Operations]
Rep Office
Branch
LLP
KK
Legal Status
-
Foreign Entity
Corporation
Corporation
Registration
-
Required
Required
Required
Business Activity
-
Allowed
Allowed
Allowed
Share Capital
-
-
2 yen or more
1 yen or more
Credibility
-
<
ᇞ
<
ᇞ
<
○
Bank Account
Individual Bank
Account
Corporate Account
Corporate Account
Corporate Account
Law suits
Could reach HQ
Could reach HQ
Do not reach HQ in
principle
Do not reach HQ in
principle
-
Branch Representative
Not legally stipulated
At least 1
Ti
Time
required
i d for
f
establishment
1d
day
A
Approx.
1 month
th
A
Approx.
2 – 3 months
th
A
Approx.
1 – 3 months
th
Registration Cost
-
400, 000 – 500, 000 JPY
400, 000 – 600, 000 JPY
600,000 – 650, 000 JPY
Legal Registration Fees
-
90 000 JPY
90,000
Min 60,
60 000 JPY
Min 150,
150 000 JPY
Income subject to
corporate tax
-
Domestic source
income
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, interest
and royalties
Representative Director
Global income
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
as long as the charges are
g
at arm’s length.
•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 are restricted to
•Activities
storing; purchasing goods;
collecting and supplying
information for HQ;
advertising; market research.
•Internal charges (internal
interest or royalties) are not
allowed to be levied to the
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 allowed to be
•Not
converted 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
©2013 JETRO
Starting Business operation in
Japan
p
©2013 JETRO
©2013 JETRO
[Initial Cost Estimation (in Tokyo)]
KK
Branch
5,380 – 16,130 (6,670 ~ 20,000)
Short-term housing and temporary office
(3
(3-month
th rent,
t temporary
t
office
ffi & housing)
h
i )
Obtaining visas
Company establishment and tax notices
2,420 (3,000)
1,885 (2,340)
62,265 (77,200)
5,910 (7,330)
(incl de 5 million Yen , S$66,667
(include
S$66 667
Paid in Capital)
Hiring local personnel (one local manager with 10
million Yen annual compensation)
32,250 (40,000)
(30% commission fees to the recruitment agent)
Setting up a permanent office
38,000 (47,125)
Setting up permanent housing
(for foreign national)
10,760 (13,345)
TOTAL
©2013 JETRO
151,180 – 161,835
(187,340 ~ 200,675)
94,200 – 104,950
(116,810 ~ 130,140)
All figures shown in $US; $US1.00=JPY93 (S$1.00 = JPY75)
[Comparison in other business regions]
As of August 2010
©2013 JETRO
JETRO: Your gateway to Japan
©2013 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
has
h 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.
©2013 JETRO
[JETRO Global Network]
Overseas Offices: 73 (55 countries)
Domestic Offices: 36
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 the 36 JETRO offices (HQ in Tokyo &
g
Japan
p make it easy
y for foreign
g firms to g
get timely
y and accurate
Osaka)) located throughout
information about specific regions, markets and prefectural incentive programs.
©2013 JETRO
[How does JETRO help]
Invest Japan Business Support Center(IBSC)
©2013 JETRO
[How does JETRO help]
Invest Japan Business Support Center(IBSC)
Consulting Services
● Market advice
● Laws and regulations
● National and local government incentives
● Cost simulation
Examples of consultation
•Market and industry information
•Information
I f
ti on relevant
l
t legal
l
l systems
t
•Cost estimates
•Taxation, labor and legal issues
•Obtaining residence status and visas
•Information on incentives from national and
● Incorporation procedures
oca go
governments
e
e s
local
● Employment and labor issues
•Establishing an office
•Finding human resources
•Finding
Fi di an office
ffi location
l
ti
•Support for Participation in Japan Trade Fairs
•Networking with potential business partners
Invest Japan Business Support Center(IBSC)
Facilities
● Free temporary office spaces
● Well-stocked library
● Multipurpose hall & conference rooms
Temporary office space offered free of charge
Tenancy Eligibility:
Foreign company considering to start a business
in Japan
Tenancy period:
Up to 50 business days in principle (The period
can be extended as required, but a tenancy fee
will be charged.)
Tenancy fee:
Free (Deposit and communication fee are
required.)
Equipment:
Desks,chairs,telephones,fax machines and
broadband connections
©2013 JETRO
Common facilities:
Conference rooms, multipurpose hall, business
library
[Window to Japan Local Authorities
& Government’s Incentive Schemes ]
Incentives for Promoting Asian Site Location
Asia Business Location Bill
The Competent Authorities
The Japanese government will take support measures for certified global companies, including
tax breaks and patent fee exemption
exemption, in order to motivate global companies to locate their
R&D facilities or regional headquarters in Japan.
Ministry of Economy, Trade
and Industry
Subsidy Program for Projects Promoting Asian Site Location in Japan
The Competent Authorities
Establishment of R&D facilities OR Regional Headquarters in Japan by Global Companies
Ministry of Economy, Trade
and Industry
Eligible Costs:
Survey design costs, Facility costs, Equipment costs, Facility rental fee
Subsidy Rates/Maximum Amount:
-up to
t 1/2 for
f SMEs
SME
-up to
t 1/3 for
f non-SMEs
SME
-up to
t 2/3 for
f disaster
di
t afflicted
ffli t d areas
Incentives regarding Special Zones
Comprehensive
p
Special
p
Zones
The Competent
p
Authorities
Special regulatory measures, tax reduction, etc. are available for companies with business plans
in designated 7 zones.
*Hokkaido, Ibaraki, Tokyo, Kanagawa, Aichi/Gifu, Kyoto/Osaka/Hyogo, Fukuoka has been
selected
Regional Revitalization
Bureau, Cabinet Secretariat
Special Zones for Reconstruction
The Competent Authorities
Special regulatory measures, tax reduction, etc. are available for companies with business plans
in disaster afflicted areas.
*Disater afflicted areas are stipulated in the Act on Special Provisions of Article 3 of the Public
Finance Act
Ministry of Economy, Trade
and Industry
©2013 JETRO
Immigration Treatment Incentive
Points-based
Points
based preferential immigration treatment for highly skilled foreign professionals
The Competent Authorities
Under the points-based system, foreign professionals who earn 70 points or more will be
recognized as "highly skilled foreign professionals" and will be given preferential immigration
treatment.
Immigration Bureau, Ministry
of Justice
Other Government Subsidies
z The Innovation Center Establishment Assistance Program
zSubsidy for Industry Reconstruction in Ibaraki
Ibaraki, Tochigi and Miyagi
zThe Innovation Center Establishment Assistance Program
zProjects Promoting Domestic Location of Innovative, Low-carbon Technology-Intensive Industries
zSubsidy Program for Domestic Site Location
zSubsidy for Industry Reconstruction in Fukushima
Prefectural and Municipal Incentives
http://www.jetro.go.jp/en/invest/incentive_programs/
©2013 JETRO
[Recent Success Story from Singapore
Supported by JETRO]
n
JETRO’s support:
¾ Factory search
o at o p
provision
o so o
on sett
setting
g up
¾Information
¾Introduced to subsidy for the establishment of new business facilities in the prefecture
¾Introduced staffing agencies
April 28, 2011
Selected as one of the companies eligible for the “Japanese Fiscal Year 2010 Subsidy
Program for Projects Promoting Asian Site Location in Japan
©2013 JETRO
„
More than 350 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]
©2013 JETRO