1 Incorporation

Doing business in Japan

Some literature insist that setting up a corporation in Japan takes time and costs more than other types of businesses.

Although this statement is true, the costs associated with incorporation are outweighed by the benefits. Japanese business people and banks, as well as your future customers, are likely to feel more comfortable doing business with an incorporated foreign-owned entity. By incorporating an operation in Japan, the parent company demonstrates its commitment to doing business here.

It is also important to consider tax-related consequences, particularly the effects of your Japanese operation on the parent company’s tax situation.┬áBusinesses must carefully weigh the impact of a consolidated tax return, withholding tax on dividends, a net operating loss carry-forward period of nine years and tax treaties, if applicable.