A Taiwanese or Chinese company setting up in Japan: branch or subsidiary?

In short: to keep doing business in Japan, a Taiwanese or Chinese company chooses broadly between a "Japan branch (foreign company)" and a "local subsidiary (kabushiki-kaisha or godo-kaisha)". A Japan branch requires registration of the foreign company, and at least one of the representatives in Japan must have an address in Japan (Companies Act, Article 817). A subsidiary newly incorporates a Japanese company. If the representative lives in Japan and manages the business, the "Business Manager" residence status is needed; but under the standards reform in force from 16 October 2025, capital of 30 million yen or more, employment of one or more full-time employees, Japanese ability, a career background and expert confirmation of the business plan are now required. This article organises the framework; individual eligibility is decided through the immigration, registration and tax procedures.

When a Taiwanese or Chinese company sets up in Japan, which to choose—a branch or a subsidiary?

A base in Japan can be a "representative office" that does no sales activity, a "Japan branch" as a foreign company, or a "subsidiary (local corporation)" as a Japanese company. To do sales (transactions) continuously, you choose a branch or a subsidiary.

	Japan branch (foreign company)	Subsidiary (local corporation)
Legal personality	Part of the home-country company (not a separate entity)	A Japanese company (a separate entity)
Registration	Registration of the foreign company (Companies Act, Article 933)	Incorporation registration of the company (kabushiki-kaisha or godo-kaisha)
Liability	Borne by the home-country company	In principle borne by the Japanese corporation (limited liability)
Representative's address	At least one representative in Japan has an address (Companies Act, Article 817)	Directors, etc. (the address requirement has been relaxed)

A branch is part of the home-country company, so debts in Japan are borne by that company. A subsidiary is an independent Japanese company, so liability is generally separated from the home-country company. Note here Companies Act, Article 821 (pseudo-foreign company): a foreign company that places its head office in Japan, or whose main purpose is to conduct business in Japan, may not continue to transact in Japan. If you try to run, in "branch" form, a business that is substantially based in Japan, you may run into this provision, so when the substance is Japan-centred a subsidiary tends to be chosen.

How does registering a foreign company differ from incorporating a kabushiki-kaisha or godo-kaisha?

For a Japan branch, when a foreign company intends to transact continuously in Japan it appoints a representative in Japan, and must register the foreign company within three weeks of the day the representative was appointed (Companies Act, Article 933). Until it registers, it may not continue to transact in Japan (Companies Act, Article 818; a person who transacts in violation bears, jointly with the foreign company, liability to the counterpart).

To set up a subsidiary, you newly create a Japanese company. A kabushiki-kaisha prepares articles of incorporation, has them notarised by a notary (Companies Act, Article 30), completes the contribution, and comes into existence through the incorporation registration at the location of the head office (Companies Act, Article 49). A godo-kaisha does not need notarisation of its articles, and comes into existence through the incorporation registration after the contribution (Companies Act, Article 579). The minimum-capital system has been abolished, so under the Companies Act incorporation is possible even with capital of 1 yen. However, note that to obtain the "Business Manager" residence status described below, capital, etc., of 30 million yen or more is required (the incorporation requirements of the Companies Act and the requirements for the residence status are different things).

Procedure	Kabushiki-kaisha	Godo-kaisha	Foreign company (branch)
Notarisation of articles	Required (Companies Act, Article 30)	Not required	—
Coming into existence / registration	By incorporation registration (Companies Act, Article 49)	By incorporation registration (Companies Act, Article 579)	Registration of the foreign company (Companies Act, Article 933)
Separate entity?	Separate entity (Japanese corporation)	Separate entity (Japanese corporation)	Part of the home-country company

Documents proving the existence of the home-country (Taiwan or China) company and its representative may require notarisation and authentication in the home country, and the procedure differs by country and region. A translation must also be attached. Confirm this with the destination (registry office, immigration) once the kinds of documents are settled.

What are the requirements of the representative's "Business Manager" residence status?

If the representative lives in Japan and manages the company, the "Business Manager" residence status is needed. It covers activities of conducting the management of trade or other business in Japan, or engaging in the management of that business (Immigration Control and Refugee Recognition Act, Appended Table I-2). The ministerial ordinance setting the landing-permission standards was substantially amended, in force from 16 October 2025 (announced 10 October 2025, updated on the 30th of the same month), tightening the requirements. The main points are as follows.

Requirement	After the amendment (in force 16 October 2025)
Capital, etc.	30 million yen or more (paid-in capital or total contribution). For a sole proprietor, the total invested amount
Full-time employee	Employment of one or more required. The scope is limited to Japanese, special permanent residents, and holders of a status in Appended Table II (permanent resident, spouse of Japanese national, spouse of permanent resident, long-term resident)
Japanese ability	Either the applicant or a full-time employee at a considerable level (B2 or above on the "Reference Framework for Japanese Language Education"; JLPT N2 or above, etc.)
Career	A doctoral, master's or professional degree in a field such as business management, or three years or more of career in the management of business
Business plan	Confirmation by a person with expert knowledge of management (a small and medium enterprise management consultant, a certified public accountant, or a tax accountant)

In addition, using one's home as the business office is in principle not allowed, and where the substance of activity as a manager is not sufficiently recognised—such as by outsourcing the work—it is treated as not falling within the status. On the confirmation of the business plan, the Immigration Services Agency's materials warn that a person other than an attorney or an administrative scrivener preparing, as a business for reward, application documents submitted to public offices may violate the Administrative Scriveners Act.

As transitional measures, the pre-amendment standards apply to applications received and under review by the day before the effective date. Where a person already residing under "Business Manager" files a renewal application by the day three years after the effective date (16 October 2028), eligibility is judged in light of the business situation and the prospect of conformity even if the amended standards are not met. A renewal after those three years must meet the amended standards.

Who do you assign the licences, bank account and initial tax to?

Entering Japan moves registration, immigration, tax, labour and real estate at once. The roles are divided as follows, on the premise of separate contracts with each.

• Choice of branch/subsidiary, preparation of articles, necessary licences, and submission-agency for the "Business Manager" residence application → Yotsuba Administrative Scrivener Office (administrative scrivener; submission agent)
• Registration of the foreign company and incorporation registration of the company (commercial registration) → a judicial scrivener (agency for commercial-registration applications is the judicial scrivener's business)
• Securing the business office, its lease and the important-matters explanation → Yotsuba Real Estate Co., Ltd.
• Corporate tax, transfer pricing, consumption tax and international taxation → a tax accountant
• Employees' working conditions, social insurance and work rules → Yotsuba Labour and Social Security Attorney Office (labour and social security attorney)
• Individual legal judgement on rights, obligations and disputes → an attorney

Have a question about your situation?

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Submission-agency for a residence application may be done by a registered administrative scrivener or an attorney. A labour and social security attorney cannot act as a submission agent for residence applications, so residence procedures are assigned to an administrative scrivener. Opening a bank account after incorporation depends on each financial institution's review standards, and required documents and interviews have tended to increase in recent years. Because we cannot guarantee the possibility or conditions of opening, confirm directly with the financial institution you plan to deal with. Initial tax matters—the corporate establishment notification to the tax office, application for approval of blue-return filing, and notifications on withholding income tax and consumption tax—are handled with a tax accountant.

Yotsuba Administrative Scrivener Office and Yotsuba Real Estate Co., Ltd. are separate businesses. Our office handles, as an independent business, the arranging of the base form, the preparation of articles, licences and the submission-agency of residence applications, while registration, tax, labour and premises are contracted or consulted separately with each qualified professional and business. Our office receives no referral fee. For the whole picture of licensing, see Licensing and Permits; for the flow of engagement, see Engagement Flow; and for fees, see Fee Schedule. For the route of incorporating a company under "Business Manager", also see Company incorporation by a Chinese entrepreneur under "Business Manager"; for an example of viewing business and residence together, see A foreign national's "Business Manager" and opening a group home.

Looking ahead to exit and liquidation, which is lighter?

A base is easier to choose when you compare not only the cost of creating it but also the burden of closing it. Closing a Japan branch (foreign company) requires registrations such as abolishing the business office and the resignation of the representative in Japan, and liquidation of the property in Japan can be an issue (Companies Act, Article 822 provides for cases where the court may order the start of liquidation of all the property that the foreign company has in Japan). Closing a subsidiary (Japanese corporation) goes through the dissolution and liquidation of the kabushiki-kaisha or godo-kaisha, down to the registration of completion of liquidation.

In general, a subsidiary is easier to handle for separating liability and for transfer or reorganisation, while a branch can be lighter for initial set-up cost and small-scale trial entry. Which is "lighter" varies with the business scale, the scope of liability, tax, and the prospect of future capital increase or sale, so it cannot be said uniformly. Designing both the entrance (set-up) and the exit (withdrawal)—registration by a judicial scrivener, tax by a tax accountant, residence by an administrative scrivener—is the safe route.

FAQ

Q. What is the biggest difference between a Japan branch and a subsidiary?
A. Legal personality. A branch is part of the home-country company and not a separate entity, and debts in Japan are borne by the home-country company. A subsidiary is a Japanese company (a separate entity), and liability is generally separated from the home-country company. Also, a foreign company that places its head office in Japan or whose main purpose is business in Japan cannot continue transacting in branch form (Companies Act, Article 821, pseudo-foreign company). When the substance is Japan-centred, a subsidiary tends to be chosen.

Q. I heard capital of 1 yen is fine—can I still get the Business Manager visa?
A. Company incorporation and the residence status are different requirements. Under the Companies Act the minimum-capital system is abolished, so incorporation itself is possible even with capital of 1 yen. But the "Business Manager" residence status, under the amendment in force from 16 October 2025, now requires capital, etc., of 30 million yen or more and employment of one or more full-time employees. That you can incorporate and that the residence status is granted must be considered separately.

Q. Can I leave all of the company registration and the residence application to an administrative scrivener?
A. The roles are divided by task. Preparation of articles, licences and submission-agency for the residence status are the administrative scrivener's; agency for registration of the foreign company and incorporation registration (commercial registration) is the judicial scrivener's business. A labour and social security attorney cannot act as a submission agent for residence applications. Each professional is engaged separately as an independent business, and our office receives no referral fee.

Q. I already reside under Business Manager—what happens at renewal?
A. There are transitional measures. A renewal application by the day three years after the effective date (16 October 2028) is judged in light of the business situation and the prospect of conformity even if the amended standards are not met. A renewal after those three years must meet the amended standards. Confirm the individual prospect within the immigration procedure with the documents assembled.

Sources (Primary Information)

• e-Gov Law Search, "Companies Act" (Act No. 86 of 2005), Article 30 (notarisation of articles), Article 49 (coming into existence of a kabushiki-kaisha), Article 579 (coming into existence of a membership company), Article 817 (a foreign company's representative in Japan), Article 818 (prohibition of continuous transaction before registration), Article 821 (pseudo-foreign company), Article 822 (liquidation of a foreign company's property in Japan), Article 933 (registration of a foreign company) (accessed 2026-09-17)
• e-Gov Law Search, "Immigration Control and Refugee Recognition Act", Appended Table I-2 "Business Manager" (accessed 2026-09-17)
• Immigration Services Agency, "On the amendment of the permission standards for 'Business Manager' (in force 16 October 2025)" (announced 10 October 2025, updated on the 30th of the same month) / "On the amendment of the landing-standards ministerial ordinance for the 'Business Manager' status" (accessed 2026-09-17)
• The ministerial ordinance setting the standards under Article 7, paragraph 1, item 2 of the Immigration Control and Refugee Recognition Act, "Activities listed in the lower column of the Business Manager row of Appended Table I-2", and Appended Table III of the Enforcement Regulation (confirmation of the business plan) (accessed 2026-09-17)
• Judicial Scriveners Act, Article 3 (the judicial scrivener's business = agency for commercial registration, etc.); Administrative Scriveners Act, Articles 1-2 and 1-3 (the administrative scrivener's business) (accessed 2026-09-17)

This article is general information and does not guarantee the choice of base form, the grant of the residence status, or the possibility of registration or tax. The review of the "Business Manager" residence status is made by the Immigration Services Agency; confirm the details of requirements and transitional measures in the latest published materials. Agency for registration of the foreign company and incorporation registration (commercial registration) is by a judicial scrivener; corporate tax, transfer pricing, consumption tax and international taxation by a tax accountant; employees' working conditions, social insurance and work rules by Yotsuba Labour and Social Security Attorney Office; securing the business office, its lease and the important-matters explanation by Yotsuba Real Estate Co., Ltd.; and individual legal judgement on rights, obligations and disputes by an attorney, each as an independent business under a separate contract or consultation. Our office receives no referral fee. Individual judgements are made by a qualified professional after a meeting. Written by Joji Uramatsu, administrative scrivener and licensed real estate broker.