Which is suggested Branch office or Subsidiary.
We often suggest to our potential clients that "Subsidiary is preferable to Branch office".
However your best position is depending on your company's environment.
you should consult with your tax advisor before hand.
（Generally speaking）Subsidiary is suggested.
We suggest Subsidiary due to the below reasons.
1. From the capita per levy point of view, subsidiary is reasonable. (In
case your head office's paid in capital figure is huge, you have to pay
huge amount of local tax even though your Japan branch were a loss situation.)
2. Sized tax would be chargeable in case your paid-in capital exceeds JPY
100M.
3. Financial Statement of head office is required to file for Branch office
when BO submit a tax return to the tax office. Subsidiary is not required
to file shareholder's FS.
4. If your Japan branch is sued to a court, representative of Japan blanch
can attend the court in Japan. In case of subsidiary, director of Japan
subsidiary should attend.
5. Tax advisor's total fee for a Branch office would be expensive due to
the additional jobs 2 and 3 above.
6. It tends to be thought that "a branch is easily liquidated than
a subsidiary", however there is actually not so different of time
scale and costs.
| Category of corporation | Main office is located within the 23 wards | Other than left area | ||
|---|---|---|---|---|
| Capital Amount | Number of staff | Metropolitan tax | Metropolitan | City |
| Over JPY 5,000,000,000 | Over 50 | JPY 3,800,000 | JPY 800,000 | JPY 3,000,000 |
| 50 and below | JPY 1,210,000 | JPY 410,000 | ||
| Over JPY 1,000,000,000 or under JPY 5,000,000,000 |
Over 50 | JPY 2,290,000 | JPY 540,000 | JPY 1,750,000 |
| 50 and below | JPY 950,000 | JPY 410,000 | ||
| Over JPY 100,000,000 or under JPY 1,000,000,000 |
Over 50 | JPY 530,000 | JPY 130,000 | JPY 400,000 |
| 50 and below | JPY 290,000 | JPY 160,000 | ||
| Over JPY 10,000,000 or under JPY 100,000,000 |
Over 50 | JPY 200,000 | JPY 50,000 | JPY 150,000 |
| 50 and below | JPY 180,000 | JPY 130,000 | ||
| On and under JPY 10,000,000 | Over 50 | JPY 140,000 | JPY 20,000 | JPY 120,000 |
| 50 and below | JPY 70,000 | JPY 50,000 | ||
| Other than above | JPY 70,000 | JPY 20,000 | JPY 50,000 | |
Case 1: Branch office is preferable
（Indian company do IT development business in Japan）
Due to the double tax treaty of India and Japan, a branch office would be preferable.