 |
|||||
 |
|||||
 |
 |
 |
 |
 |
 |
Subsidiary vs Branch
Subsidiary vs Branch
(Note) The appropriate structure will be decided according to your Japanese
business itself!
<Which is preferable Subsidiary or Branch.>
| Subsidiary (Kabushiki-Kaisha) | Japanese Branch | |
| 1. Capital | No minimal capital figure. At least JPY 1. |
N/A |
| 2. Dividends / Profit | Remittance Subject to withholding tax at 20% (or reduced rates under tax treaties) | Not imposed |
| 3. Loan 1) Intra-company (Loan form the head office) 2) Inter-company (Loan form affiliated companies) |
1) N/A 2) Interest is deductible Note: 'Thin Capitalization' rules. |
1) Interest is not deductible 2) Same as left |
| 4. Annual administration | Annual shareholders meeting. | No annual procedure. Registration is required when registered items of the head office is changed. |
| 5. Tax Return Submit by the subsidiary. | No requirement to the parent company. | Submit by the branch with the accounting reports prepared by the head office for worldwide bases. |
| 6. Director | Necessary at least one representative director who is a resident of Japan | Necessary at least one representative who is a resident of Japan |
| 7. Local tax (capital per levy) | Depending on capital amount etc | Disadvantage? (If the capital amount of the head office is huge.) |
| 8. Loss of starting up | Cannot setoff by the parent company | Can setoff by the head office |
Local corporation tax (Per capita levy on corporate inhabitant tax) - Tokyo Metropolitan
| 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 |
| Or under 50 | 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 |
| Or under 50 | 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 |
| Or under 50 | 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 |
| Or under 50 | JPY 180,000 | JPY 130,000 | ||
| Or under JPY 10,000,000 | Over 50 | JPY 140,000 | JPY 20,000 | JPY 120,000 |
| Or under 50 | JPY 70,000 | JPY 50,000 | ||
| Other than above | JPY 70,000 | JPY 20,000 | JPY 50,000 | |
Representative Office vs Branch
PE (Permanent Establishment) issue should be investigated with a tax specialist before setting up a Japan office.
