How to Register a Branch Office in Japan

Thinking about starting a business or bringing your business to Japan?

Due to Japan's large economy and political stability, many foreign entrepreneurs seek business opportunities in Japan.

However, setting up a company or a branch office in Japan requires navigating complex processes and loads of paperwork.

But don't worry, because this article will walk you through everything you need to know about starting a branch office in Japan.

Quick Answer: A branch office in Japan is a legally registered extension of a foreign company, not a separate legal entity. It allows foreign businesses to operate and generate revenue in Japan while remaining fully controlled—and fully liable—under the overseas head office.

What is a branch office in Japan?

A branch office is a legally registered extension of a parent company that operates in another country. Unlike a subsidiary, a branch office is not a separate legal entity, meaning the parent company remains fully responsible for its obligations.

In Japan, a branch office is defined as a facility established separately from the head office that is officially registered. 

The head office can delegate some of its authority to the branch, allowing it to make decisions related to operations or hiring.

Since the scope of delegated authority can be freely determined, it is also possible to limit the branch’s authority to a minimum for risk management purposes.

Branch Office vs. Subsidiaries (KK & GK)

There are multiple ways to start a business in Japan. 

If you already have a company overseas and wish to open a business in Japan as an extension of a foreign company, then a branch office is a good idea.

However, if you wish to start a business in Japan as a separate legal entity from the head office, you can also consider establishing subsidiaries (Kabushiki Kaisha or Godo Kaisha).

Here are the differences between a branch office and a subsidiary.

👉Comparison: GK vs. KK

Unlike subsidiaries, a branch office is not considered a separate legal entity. Instead, it operates as an extension of the foreign head office, making it a practical option for companies that want to enter the Japanese market quickly without going through the full incorporation process.

Is a branch office the right choice for your business in Japan?

A branch office is not the right structure for every foreign company. Whether it is suitable depends on your business goals, risk tolerance, and long-term plans in Japan.

A branch office in Japan may be suitable if:

• You want to enter the Japanese market quickly without incorporating a new company

• You plan to operate as an extension of your foreign head office, not as a separate legal entity

• You do not need to raise capital in Japan

• You want direct control by the overseas headquarters

• Your Japanese operations will focus on sales, support, or limited local activities

A subsidiary (KK or GK) may be a better option if:

• You want to establish a separate legal entity under Japanese law

• You need higher credibility with Japanese banks, clients, or business partners

• You plan to raise funds or issue equity in Japan

• You want to limit the parent company’s legal and financial liability

• You are building a long-term, Japan-based operation with local governance

Key decision takeaway

A branch office offers speed, simplicity, and cost efficiency, but it comes with full parent-company liability and limited local independence. A subsidiary requires more setup effort but provides stronger legal separation, credibility, and flexibility for long-term growth in Japan.

Branch Office vs. Representative Office

A branch office and a representative office are similar and can be confusing, but there is a large difference that you need to keep in mind.

A representative office also requires a head office, just like a branch office. 

However, a representative office is not a legal entity and must only operate for non-commercial purposes under a parent company. 

A representative office is often used for the preparation for establishing a branch office, market research, non-commercial PR, or liaison activities. It cannot engage in activities that generate revenue or profit.

Examples of foreign companies establishing branch offices in Japan

Here are some common use cases of foreign companies opening branch offices in Japan.

1. A foreign IT company opening a support center in Japan

2. A foreign manufacturer (e.g., auto parts) establishing a sales base in Japan

3. An overseas financial institution (e.g,. banks) opening a branch in Japan

Pros and cons of a branch office

Here are some pros and cons of establishing a branch office in Japan.

Pros of a branch office

• The establishment process is relatively simple and cost-effective.

• The head office's expertise and technology can be directly utilized.

• Business results in Japan can be reflected in the head office's performance.

• Flexible adjustments to business development in Japan are possible.

👉Read also: 【2025】The Real Cost of Starting a Business in Japan

Cons of a branch office

• Compared to a Japanese corporation, the branch may have lower social credibility.

• The head office is responsible for the business activities in Japan.

• There may be tax-related restrictions.

Step-by-Step Guide to Branch Office Registration

Step 1: Appoint a representative in Japan

You must appoint a representative for the Japan branch. 

This person can be either Japanese or a foreign national but must have a residential address in Japan. If you appoint multiple representatives, it is acceptable as long as at least one resides in Japan.

Step 2: Confirm trade name and business eligibility

Conduct research on the trade name (商号 Shogo) to avoid duplication or legal issues.

At the same time, confirm that your intended business activities comply with Japanese regulations.

Step 3: Prepare the required documents for registration

The following documents are required to register the Japan branch:

1. A document to acknowledge the existence of the head office

2. A document certifying the qualifications of the representative in Japan

3. A copy of the Articles of Incorporation of the foreign company or other documents sufficient to identify the nature of the foreign company

4. Translation of the 3 documents above

5. If there is a provision regarding the method of public notice under Article 939, Paragraph 2 of the Companies Act, a document certifying this must be provided *It is common practice to consolidate the documents above into a single affidavit

Step 4: Notarize the Affidavit

Submit the Affidavit to a notary public or Japanese embassy/consulate in the country where the foreign head office is located. (Procedures vary by country, so confirm the exact requirements in advance.)

If notarization is done at a Japanese embassy or consulate, fees typically range from 500 to 2,000 yen.

Step 5: Apply for registration at the Legal Affairs Bureau

Prepare the registration application and submit it along with the required documents to the Legal Affairs Bureau with jurisdiction over the branch office location.

The following documents are required for registration at the Legal Affairs Bureau:

1. Affidavit

2. Original and Japanese translation of the foreign company’s certificate of registration

3. Representative’s registered personal seal (実印 Jitsuin) and certificate of seal registeration (印鑑証明書 Inkan Shomeisho) 

4. Corporate seal(s) to be used in Japan (at least one official seal is required)

It takes approximately 1 to 2 weeks from document submission to completion of registration.

Tax and other obligations for branch offices

Tax, liability, and permanent establishment considerations for branch offices in Japan

A branch office in Japan is not a separate legal entity. As a result, the foreign head office remains fully responsible for the branch’s obligations, liabilities, and compliance in Japan.

Tax treatment of a branch office in Japan

• Income attributable to the Japan branch is generally subject to Japanese corporate tax

• The branch is treated as a permanent establishment (PE) for tax purposes in most cases

• The Japanese tax authorities may review transactions between the branch and the head office to ensure arm’s-length pricing

• The parent company may be required to file corporate tax returns in Japan related to branch activities

Legal and financial liability

• The foreign parent company is directly liable for contracts, debts, and legal claims arising from the branch’s operations

• There is no legal separation between the branch office and the head office

• Legal disputes or compliance issues in Japan may affect the parent company globally

Permanent establishment (PE) risk

• A branch office typically constitutes a permanent establishment under Japanese tax law and tax treaties

• PE status may trigger corporate income tax, local tax, and filing obligations in Japan

• The scope of taxable income depends on the activities performed in Japan and the authority granted to the branch

Practical implications for foreign companies

• Branch offices may face greater scrutiny from tax authorities compared to representative offices

• Certain banks, partners, or government programs may prefer or require a Japanese subsidiary

• Professional tax and legal advice is strongly recommended before choosing a branch office structure

Legal obligations after branch office registration

After the branch office registration is completed, there are obligations to follow.

1. Notify/file at the tax office

   • Notification of Incorporation

   • Notification on the Establishment of a Salary-Paying Office

   • Application for Filing the Blue Return

   • Application for Special Approval Concerning Payment Date of Income Tax Withheld at the Source

2. Notify/file at a Labor Standard Inspection Office

   • Notice of Establishment of Labor Insurance Affiliation

   • Tax Return for Estimated Insurance Premium for Labor Insurance

3. Notify/file at a Japan Pension Service Office

   • Notification of New Application for Health Insurance and Employee's Pension

   • Notification of the Acquisition of Eligibility for Health Insurance and Employee's Pension

   • Notification of Dependents Eligible for Health Insurance

4. Notify/file at a Public Employment Security Office

   • Notice of Establishment of a Workplace Covered by Employment Insurance

   • Notice of Acquisition of Eligibility for Employment Insurance

Support for Branch Office Setup in Japan

Working with a bilingual legal advisor is strongly recommended for navigating branch office registration, employment law, and ongoing compliance.

👉 English-speaking corporate lawyers

👉Bilingual accountants

👉Immigration lawyers

💡MailMate offers bilingual incorporation/branch office setup support and after services tailored for foreign business owners to expand to Japan

Mailmate's incorporation/branch office setup support + virtual mail services are a bilingual service for foreign entrepreneurs who want to start a business in Japan.

• Incorporation support: MailMate helps with company registration applications, business addresses, and much more!

• Japanese phone number service with bilingual receptionist: MailMate will answer incoming calls and relay the message to you.

• Virtual mail service: MailMate receives your business mail at a virtual address, scans and uploads it to your dashboard, where you can read, forward, or request translation for Japanese documents.

• Bill payment service: MailMate also offers a bill payment service and will pay it on your behalf by taking it to the local convenience store, so that you will never miss a payment.

MailMate has been helping entrepreneurs successfully start companies in Japan!

Frequently asked questions

What is a branch office in Japan?

A branch office in Japan is a legally registered extension of a foreign company. It is not a separate legal entity, meaning the overseas head office retains full legal and financial responsibility for the branch’s activities in Japan.

Is a branch office in Japan considered a separate legal entity?

No. A branch office is not a separate legal entity under Japanese law. All liabilities, contracts, and compliance obligations belong directly to the foreign parent company.

Can a branch office in Japan conduct business and earn revenue?

Yes. A properly registered branch office can engage in commercial activities, enter into contracts, and generate revenue in Japan. This is a key difference from a representative office, which is limited to non-commercial activities.

Is a branch office in Japan subject to Japanese taxes?

Yes. Income attributable to the Japan branch is generally subject to Japanese corporate tax. In most cases, a branch office is treated as a permanent establishment (PE) for tax purposes.

Does opening a branch office create permanent establishment (PE) risk?

Yes. A branch office typically constitutes a permanent establishment under Japanese tax law and applicable tax treaties, triggering corporate tax and filing obligations in Japan.

Who is legally liable for a branch office in Japan?

The foreign head office is fully liable. Because a branch office has no separate legal status, any debts, lawsuits, or contractual obligations incurred in Japan directly affect the parent company.

Who can be appointed as a branch office representative?

The representative may be a Japanese or foreign national, but at least one representative must have a residential address in Japan. Multiple representatives may be appointed if required.

Does a branch office need Japanese directors or shareholders?

No. A branch office does not have directors or shareholders under Japanese corporate law. It operates under the authority delegated by the foreign head office.

Is it difficult for a branch office to open a bank account in Japan?

It can be more challenging compared to a Japanese subsidiary. Some banks require extensive documentation or may prefer dealing with locally incorporated entities, depending on the branch’s activities and structure.

Can a branch office sponsor work visas in Japan?

In many cases, yes. A registered branch office that meets immigration and operational requirements may sponsor work visas, although approval depends on business scale, stability, and role necessity.

What is the difference between a branch office and a representative office in Japan?

A branch office may conduct revenue-generating business activities, while a representative office is limited to non-commercial functions such as market research or liaison activities and cannot earn income.

What is the difference between a branch office and a subsidiary in Japan?

A branch office is an extension of a foreign company, while a subsidiary (KK or GK) is an independent legal entity incorporated under Japanese law. Subsidiaries generally offer higher credibility and liability separation but require more complex setup.

Is professional support recommended for setting up a branch office?

Yes. Due to language barriers, tax exposure, and compliance requirements, working with bilingual legal and accounting professionals is strongly recommended.

In closing

Establishing a branch office in Japan is a practical option for foreign companies looking to expand their operations without creating a separate legal entity. 

The process is relatively simple and cost-effective compared to setting up a subsidiary, and it allows you to leverage your existing brand, expertise, and resources directly in the Japanese market.

Unlike establishing a subsidiary, opening a branch office also allows you to meet market demands in Japan more quickly. 

That said, a branch office may come with limitations, such as lower social credibility compared to a Japanese corporation and potential challenges with banking or certain contracts. 

Carefully consider your business goals, structure, and long-term plans before deciding.

If a branch office is the right fit for your company, working with bilingual experts such as MailMate will make the process significantly smoother. From legal registration to ongoing compliance, having experienced support can save you time, money, and stress!