Should my company open a branch office or a subsidiary in Japan?

	Branch Office	Kabushiki Kaisha (KK)
Minimum Capitalization	No requirement of minimum capital	No requirement of minimum capital
Liability	Foreign company fully liable to creditors, etc.	Liability of the KK's shareholders typically limited to the amount of their equity participation
Losses of The Entity	Losses are included in the head office's income statement	Losses at the KK are not included in the parent company's income statement
Local Corporate Income Tax(per capita tax)	The head office's capital is used to calculate the tax. 10 million yen or less 70,000 yen 10 - 100 million yen 180,000 yen 100 million - 1 billion yen 290,000 yen 1 - 5 billion yen 950,000 yen More than 5 billion yen 1,210,000 yen	The KK's capital is used to calculate the tax. For example, if the KK's capital is 10 million yen, the per capital tax is 70,000 yen.
Transfer Pricing Issues	Higher risk	Lower risk
Directors　& Statutory Auditors	N/A	At least 1 Director Assuming: 1. stated capital < 500 million yen; 2. debts < 200 million yen; and 3. private corporation
Representatives Resident in Japan	At least 1	At least 1

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