Which is your appropriate vehicle? - Setting up a presence in Japan.

Here is a chart map for considering the type of corporate structure which you are establishing a presence in Japan. There are lots of things to be checked before to decide the type. These are example of the factors. Please try this chart map for your hints.

Most important thing is the appropriate structure will be dictated by the business itself.

* It is strongly suggested that you should consult with your tax advisor, JETRO or Development agencies etc..

Subsidiary? ----- Branch? ------or----Representative Office???

START Do you sale or trade in Japan?	NO	What is your business purpose in Japan?	Gathering information only.	Rep. Office
			Purchasing only.	Rep. Office
			Any other purpose than above.
YES			If you still have a sale agent in Japan, and would like to expand a business in Japan market, it may be suggested that you should set up a branch or subsidiary, rather than rep office. Consult with your advisor.
SUBSIDIARY or BRANCH
Can you disclose Head office's accounts to Japanese authority?	NO	SUBSIDIARY does not have an obligation to disclose a parent company's accounts.	Does your business have a risk for PL (Products Liability) issues?	To avoid your director of the head office come to Tokyo to appear in court (i.e. to avoid to receive a summons), establish subsidiary.
YES (Branch has obligation to disclose it.)
Do you have  a business plan to expand a trade in Japan?	YES (Tax planning)	Do you want to set off a starting up loss with the head office's income?	Branch may set off. (Subsidiary cannot)
		Do you want to deduct an interest of loan from the parent company?	can deduct. (Branch's interest may not deductible at head office's calculation.)
		Which is higher of the tax rate in your home country or Japan?	If home country's rate is higher, and you have enough Foreign Tax Credit allowance in the Head office, subsidiary may be better.
		Do you have any other tax planning?	Suggested: Consult with your tax advisor!
YES (company image)
Do you want to emphasize that your company is Foreign one?	NO	It may be interested that you set up a subsidiary with a name of Japanese style.
YES		Some Japanese people tends to think.	Generally speaking, a Kabushiki-Kaisha (subsidiary) is more attractive for Japanese potential employer than a branch. KK is much easier to win the confidence comparing with a branch. Some of Japanese people have a bad image that a branch of foreign company may close the office without any notice.
Some "Original brand name + Japan KK" has competitiveness.	Subsidiary
Or			The most important thing isyour business plan itself. * It is strongly suggested that you should consult with your tax advisor, JETRO or Development agencies etc..
Some Japan branch of foreign company has better image to customers than Subsidiary.	Branch