Setting Up a Branch/Subsidiary of a Foreign Company in Japan | Procedures and Registration Process

As of October 2026 · Administrative Scrivener Yukiko Horiuchi

Hello. I’m Yukiko Horiuchi, a certified administrative scrivener at the Horiuchi Administrative Scrivener Office.

"We want to keep our head office overseas and create a base in Japan. Which is better, a branch or a subsidiary?" We often receive such consultations from overseas companies. Your choice changes the registration procedure, the documents prepared in your home country, and the visas for people coming to Japan.

In this article, let's look at the process for a foreign company to set up a branch or subsidiary in Japan, including the documents prepared in the home country and notifications under the Foreign Exchange Act.

1. What Is the Difference Between a Branch and a Subsidiary?

The biggest difference is who bears responsibility for the business in Japan. A branch is the overseas head office itself doing business in Japan, so the head office bears liability for contracts and debts. A subsidiary is independent as a Japanese company, so liability in principle is limited to the amount invested.

(data) item	a branch	Subsidiary (kabushiki kaisha/godo kaisha)
Legal status	Part of the overseas head office	An independent Japanese company
registration	Registration of a foreign company	Incorporation registration
Scope of liability	Borne by the head office	In principle up to the amount invested
capital stock	Not required (no capital as a branch)	From 1 yen under the Companies Act
representative	At least one representative in Japan must have an address in Japan	Even people not living in Japan can be representatives
Taxes in Japan	Income arising in Japan is taxed	The subsidiary's income is taxed

Considering credibility with business partners and financial institutions, future business expansion and the procedures for withdrawal, many companies seem to choose a subsidiary. If you only do market research without doing business in Japan, a representative office, which requires no registration, is another option. A comparison by form is introduced in detail in "Guide to Establishing a Company in Japan | Comparing Corporate Forms and Visas [2026]".

2. How Do You Set Up a Japanese Branch?

A Japanese branch is set up by registering as a "foreign company" at the Legal Affairs Bureau. Until registration, you cannot conduct continuous transactions in Japan.

The registered items are organized based on the Japanese company type closest in nature to the head office (usually a kabushiki kaisha), with items specific to foreign companies added, such as the branch location and the representative in Japan. At least one representative in Japan must have an address in Japan.

1. Decide the items to register (trade name, branch location, representative in Japan, etc.)
2. Secure an office for the branch
3. In the home country, prepare and authenticate an affidavit on the company outline and the establishment of the branch
4. Prepare Japanese translations of the affidavit, etc.
5. Apply to the Legal Affairs Bureau for registration of a foreign company
6. Obtain the certificate of registered matters and proceed with opening a bank account and notifications to the tax office, etc.

3. What Is the Process for Establishing a Japanese Subsidiary?

A Japanese subsidiary is established as a Japanese kabushiki kaisha or godo kaisha with the overseas head office as the investor (promoter). The date of applying for incorporation registration at the Legal Affairs Bureau is the incorporation date. The main flow for a kabushiki kaisha is as follows.

1. Decide the company outline (trade name, business purpose, head office location, capital, officers)
2. In the home country, prepare the parent company's registration certificate, affidavit and the representative's signature certificate
3. Draft the articles of incorporation and have them notarized at a notary office (not required for a godo kaisha)
4. Pay the capital into a Japanese bank account
5. Apply to the Legal Affairs Bureau for incorporation registration (this date is the incorporation date)
6. Open a corporate account, file notifications with the tax office and for social insurance, and complete Foreign Exchange Act procedures

Paying in capital is where people often stumble. As a rule, payment must be made into a bank account in Japan, so if none of the officers or promoters has a Japanese account, you must first decide whose account to use.

4. What Documents Are Prepared in the Home Country?

For both a branch and a subsidiary, documents showing that the head office exists and that the representative has authority are prepared in the home country. Broadly, there are three types.

Documents in foreign languages need Japanese translations. Since obtaining and authenticating home-country documents takes time, this determines the overall schedule. Required documents differ depending on the head office's country and the company's situation. We provide a document list tailored to your situation together with the necessary forms.

5. Is Notification Under the Foreign Exchange Act Required?

A foreign company setting up a subsidiary or branch in Japan constitutes "inward direct investment, etc." under the Foreign Exchange Act. In many industries, a post-establishment report through the Bank of Japan is sufficient, but some industries related to national security require prior notification and a review period.

6. What Visas Do Employees Sent to Japan Need?

People working at the Japanese base need a status of residence suited to their position. Registering the base does not automatically grant a visa.

• Business and Management: for people who run and manage the business as representative of a Japanese branch/subsidiary or branch manager. With the October 16, 2025 revision, requirements such as capital of 30 million yen and above and at least one full-time employee were added (see "Summary of New Business Manager Visa Requirements [2026]」）。
• intra-company transfer: when employees who have worked continuously for 1+ year at the overseas head office, etc. are sent to a Japanese branch/subsidiary for a fixed period.

Which status of residence applies also changes the scale and funds needed for the base. If you plan who will be invited to Japan and on which visa when deciding the form of the base, you will not need to redo your plans later.

Frequently Asked Questions

Can a branch be converted into a subsidiary?
A branch cannot be converted directly into a subsidiary. You establish a new subsidiary and close the branch as separate procedures.

How long does it take to set up?
Including preparation of home-country documents, it takes about 2 months for a branch and 2–3 months for a subsidiary (according to JETRO).

Can the subsidiary's representative continue to live abroad?
Yes, it is possible under the Companies Act. However, considering opening a bank account and daily operations, having an officer/staff member living in Japan makes procedures easier.

Related Articles

• Guide to Establishing a Company in Japan | Comparing Corporate Forms and Visas [2026]
• Summary of New Business Manager Visa Requirements [2026]

summary

When a foreign company enters Japan, deciding between a branch and a subsidiary is the starting point. Then, planning the home-country documents, Foreign Exchange Act notifications and visas for people sent to Japan together makes launching the base smoother.

We provide one-stop support from preparing documents such as the articles of incorporation to applying for status of residence (registration applications are handled by a partner judicial scrivener). Details of our support are onCompany Formation and Japan Entry Support.

We hope this article helps you as you consider setting up a base in Japan. If you have any questions, please feel free to contact us.