Corporation(Subsidiary) vs Branch office
| Company | Branch | |
| Sales activities | Possible | Possible |
| Registration | Required | Required |
| Legal personality | Yes | No |
| Capital | Required | Not required |
| Director / Head | At least 1 Director | At least 1 Head |
| Independent decision making | Possible | Not allowed |
| Responsibility for debts and obligations | The company in Japan | Parent company |
| Bank account | Possible | Possible |
| Property rent | Possible | Possible |
| Accounting | Independent accounting | Part of parent company |
| Visa | Required | Required |
Overview of pros and cons
| Company | Branch | |
| Pros | High credibility, easier to borrow funds from banks compared with a branch | Allowed to off set profit and loss when calculating taxable income in home country where parent company locates |
| Easier to obtain management visa for Directors | Slightly cheaper cost for setting up | |
|
Limited liability (No responsibility of debts and obligations to parent company) |
No capital injection required | |
| No directors address in Japan required | More difficult to borrow funds from banks in Japan compared with a corporation | |
| Cons | Unable to off set profit and loss when calculating taxable income in a country where a parent company locates | Belongs responsibility of debts and obligations to parent company |
| Slightly higher costs for setting up | One of the representatives must have resident registration in Japan (if you can obtain a Visa of permanent resident, spouse, or business management etc., nationality does not matter) | |
| May imposed withholding tax on the transfer of funds from Japan to the home country where parent company locates | May heavily imposed pro-forma standard taxation and the evenly allocated resident tax depending on the amount of capital of the parent company | |
| Capital injection is required | Required various documents such as affidavits in foreign languages | |
| Required re-registration for director in every 10 years at max |