Representative Office in Japan (2026): Setup, Rules & Visas
A representative office in Japan (駐在員事務所, chuzaiin jimusho) is a non-commercial base for a foreign company. It is also called a liaison office. Many foreign companies use one to explore business opportunities before committing to Japan.
Representative office in Japan: quick definition A representative office can conduct market research, information gathering, purchasing, and advertising for its head office. It cannot engage in sales activities, sign contracts in its own name, or earn revenue. It needs no registration with the Legal Affairs Bureau.
Here are the key facts:
Registration: not required
Corporate taxes: not charged on auxiliary activities
Bank account and lease: signed by the head office or by the representative personally
Exception: foreign banks, insurers, and securities firms must notify the Financial Services Agency first
This guide explains what a representative office can do and how to set one up. It also compares it with a branch office and a subsidiary company (Kabushiki Kaisha & Godo Kaisha).
What is a representative office?
A representative office is not a legal entity under Japanese law. It is a physical office established in Japan by a foreign company, with no legal entity status of its own.
According to guidance published by JETRO (Japan External Trade Organization), representative offices prepare the ground for full business operations. They may conduct market surveys, collect information, purchase goods, and advertise. They do not require registration with the Legal Affairs Bureau (法務局).
How taxes work
A representative office does not pay corporate taxes on auxiliary activities. These include advertising, information provision, market surveys, and basic research.
If its activities go beyond auxiliary work, the office becomes a permanent establishment (PE). The foreign company then owes corporate tax in Japan.
When a foreign national runs the office
A foreign representative needs a work visa from the Immigration Services Agency of Japan. The right visa depends on the person's role and work history. See Step 1 below.
Primary purpose of a representative office
The primary purpose of a representative office is to prepare for business expansion. It supports the head office or parent company in a foreign country with:
Market research before a full expansion
Information gathering
Purchasing and storing goods
Advertising
Liaison with the head office
Many companies establish a representative office as a first step to a business expansion. Some companies start a representative office as a preparation stage for setting up a branch office or subsidiary.
Activities permitted for a representative office in Japan
A representative office in Japan is permitted to carry out non-commercial, preparatory activities on behalf of its foreign head office. These activities are limited to business activities like purchasing and storing assets, gathering information, advertising, and market research.
The following activities are generally permitted:
Market research and industry analysis, including surveys and competitor research
Information gathering related to local regulations, suppliers, distributors, and partners
Advertising, public relations, and promotional activities that do not involve direct sales
Liaison and coordination activities between the Japanese market and the foreign head office
Product or service feasibility studies and market entry preparation
Purchasing goods or services for internal use or evaluation by the foreign headquarters
Storing samples, materials, or products for research, testing, or display purposes
These activities are considered auxiliary and preparatory and do not constitute business operations under Japanese commercial law.
Activities NOT Permitted for a Representative Office
A representative office may not engage in any activity that results in commercial transactions or legal obligations in Japan, including:
Selling products or services
Issuing invoices or receiving payments
Signing contracts under the representative office’s name
Acting as a contracting party on behalf of customers or clients
Conducting revenue-generating business operations
If a foreign company intends to perform any of the above activities, it must establish a branch office or subsidiary company (Kabushiki Kaisha or Godo Kaisha) in Japan instead.
A representative office vs. a branch office
The major difference between a representative office and a branch office is the purpose and the kinds of activities allowed.
A representative office handles non-commercial work, such as market research and PR. It does not require registration with the Legal Affairs Bureau. It cannot earn revenue or conduct business operations for profit.
A branch office is for expanding an operation to Japan without establishing a separate legal entity from the foreign head office. It is required to register the branch office with the Legal Affairs Bureau (法務局 Homukyoku) and be able to engage in sales activities.
|
Representative office |
Branch office |
|---|---|---|
Purpose |
Acts as a preparatory base for business expansion, conducting market research, information gathering, public relations activities, etc. |
Engages in business activities locally with the aim of generating revenue under the parent company. |
Business activities allowed |
Cannot engage in sales activities or record revenue. |
Can engage in sales activities and record revenue. |
Legal responsibilities |
Cannot enter into contracts under the name of the representative office. All contracts are concluded under the name of the foreign head office, which holds the legal responsibility. |
Contracts are concluded under the name of the branch office, and the branch office holds the legal responsibility. |
Registration |
No registration required. |
Registration of the branch office is required. |
Other |
The head office or the representative, as an individual, opens the bank account and signs the lease. |
Opening a bank account or signing lease agreements is done under the name of the branch office. |
A representative office vs. a subsidiary company (Kabushiki Kaisha or Godo Kaisha)
Unlike a representative office, a subsidiary company such as Kabushiki Kaisha (KK) or Godo Kaisha (GK) is an independent legal entity established under Japanese law, with few restrictions on business activities and the ability to operate with a localized management approach.
|
A representative office |
A subsidiary (KK or GK) |
|---|---|---|
Legal entity status |
Not a legal entity; established for information gathering and market research purposes. |
An independent legal entity established under local laws. |
Business activities allowed |
Cannot engage in sales or revenue-generating activities. |
High degree of freedom to conduct business and pursue profits locally. |
Establishment Process |
The simplest and most cost-effective option, no need for registration. |
Relatively complex. Involves preparing company documents, registering the company at the Legal Affairs Bureau, and obtaining necessary tax and social insurance registrations, with a KK requiring notarization of the articles of incorporation, making its process slightly more complex than a GK. |
Representative office vs other business structures in Japan: Which should you choose?
Choosing the correct business structure is essential when entering the Japanese market. A representative office, branch office, and subsidiary company each serve different purposes and are suitable at different stages of expansion.
The following guidance explains when a representative office is the right choice, and when it is not.
Choose a representative office in Japan if:
You are researching the Japanese market before making a full business commitment
Your activities are limited to market research, information gathering, advertising, or liaison work
You do not need to generate revenue, issue invoices, or receive payments in Japan
You want a low-cost, low-risk entry option without legal registration
You plan to later transition into a branch office or subsidiary once viability is confirmed
A representative office is best suited for foreign companies in the early exploratory phase of entering Japan.
Do NOT choose a representative office if:
You plan to sell products or services in Japan
You need to sign contracts locally under a Japanese entity name
You want staff employed by a Japanese legal entity, such as a KK or GK
You require a corporate bank account in the company’s name
You intend to conduct profit-generating business activities
In these cases, establishing a branch office or subsidiary company (Kabushiki Kaisha or Godo Kaisha) is more appropriate.
Summary: Representative office vs branch vs subsidiary
In simple terms:
A representative office is a non-commercial presence for research and preparation
A branch office allows commercial activity without creating a separate legal entity
A subsidiary company (KK or GK) is a fully independent Japanese legal entity with the highest level of operational freedom
Understanding these differences helps foreign companies choose the most efficient and compliant structure for entering the Japanese market.
Benefits of setting up a representative office
Setting up a representative office is a cost-effective and generally easier way to enter the Japanese market without a full commitment.
Here are some benefits of establishing a representative office in Japan.
No registration fees: you skip the Legal Affairs Bureau process entirely
Simple required procedures: generally easier than opening a branch or subsidiary
No corporate taxes or consumption tax in most cases, because sales activities are not allowed
Cost effective: you pay only for your office, staff, and visas
Low risk: ideal for testing the Japanese market before full investment
However, if you are thinking about revenue-generating activities right away, a representative office is not suitable.
Do you need to register a representative office in Japan?
No. A representative office does not require registration under the Companies Act. You also do not notify the tax office for corporate tax purposes.
Two exceptions apply:
Financial institutions: foreign banks, insurance companies, and securities firms must give prior notification to the Financial Services Agency.
Payroll: if you pay salaries in Japan, you register with the tax office to pay withheld income tax.
A branch office is different. A foreign company that conducts continuous transactions in Japan must register under Article 818 of the Companies Act.
How to establish a representative office in Japan
The process of establishing a representative office in Japan can be summarized in four basic steps as described below.
1. Appoint a representative for the office
Choose a representative to run the office. They can be Japanese or a foreign national, but they must have a residential address in Japan.
A foreign representative needs a suitable work visa. The two most common options are:
Intra-company Transferee: the person must have worked at the head office or an overseas branch for at least one year immediately before the transfer. No degree is required.
Engineer/Specialist in Humanities/International Services: the person generally needs a bachelor's degree. Ten years of work experience, or three for some roles, can replace the degree.
A representative office can sponsor an Intra-company Transferee visa, even without legal entity status. Staff who already hold Permanent Resident or spouse status can work without a new visa.
Representative vs representative director
A representative office has a representative, often called a chief representative. A representative director (代表取締役, daihyo torishimariyaku) is different. It is an officer of a Japanese company, such as a KK.
2. Secure an office
A representative office cannot usually lease property in its own name. Instead, one of these parties signs the lease:
The head office of the foreign company
The representative, as an individual
Choose a real, usable office if your staff need visas. Immigration may request the lease agreement, a layout plan, office photos, and the head office's decision to open the office.
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3. Open a bank account
A representative office cannot open a Japanese bank account in its own name. You have two options:
The head office opens an account, usually a non-resident account
The representative opens a personal account that includes the office's name
A personal account usually follows this format: "(name of representative), Japan Representative Office, (name of company)."
Banks generally ask for:
The representative's passport
The representative's residence card
A company brochure
The lease agreement
A bank seal (see our guide to registering a hanko)
Requirements vary by bank, so confirm the details first.
4. Hire staff and set up payroll
A representative office can hire employees in Japan. When you do, you take on employer duties:
Enroll staff in social insurance, workers' accident insurance, and employment insurance
Submit a Notification of Establishment of a Salary-Paying Office to the tax office within one month of opening
Withhold income tax from each salary payment. You pay it monthly, or twice a year with approval if you have fewer than 10 employees.
Foreign staff need a suitable work visa. For specific rules, consult a tax office or certified tax accountant.
Additional Items For Consideration
Before you establish a representative office in Japan, review these tax and regulatory points.
Accounting and tax
A representative office does not file corporate tax returns in Japan. It does not charge or pay consumption tax on sales, because it makes none.
Watch the limits closely. If the office starts core business work, tax authorities can treat it as a permanent establishment. The foreign company would then owe corporate taxes on the related income.
Keep clear records of the office's activities and expenses for the head office's accounting.
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Financial institutions: FSA prior notification
Foreign banks, insurance companies, and securities firms follow stricter rules. They must notify the Financial Services Agency before they establish a representative office. The Banking Act, the Financial Instruments and Exchange Act, and other financial laws set this requirement.
How to upgrade to a branch office or subsidiary company
A representative office cannot convert into a branch or company. You establish a new branch office or subsidiary company instead.
Upgrade when you need to:
Engage in sales activities or issue invoices
Sign contracts in the company's own name
Open a Japanese bank account in the company's name
Your two options
Branch office: register with the Legal Affairs Bureau and appoint a representative in Japan. The branch stays part of the foreign company.
Subsidiary company: incorporate a KK or GK as a separate Japanese company. It has its own legal entity status.
Staff visas may need to change after the upgrade. A manager of a new branch or subsidiary may need a Business Manager visa.
Support for a representative office setup in Japan
Working with a bilingual legal advisor is strongly recommended for navigating a representative office setup in Japan, especially if you are considering a representative office as a first step to a branch office or subsidiary establishment.
👉 English-speaking corporate lawyers
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Representative office: Frequently asked questions
What is a representative office in Japan?
A representative office (駐在員事務所, chuzaiin jimusho) is a non-commercial base for a foreign company in Japan. It can conduct market research, information gathering, purchasing, and advertising. It cannot engage in sales activities or earn revenue. It is not a legal entity under Japanese law.
Does a representative office need to register in Japan?
No. A representative office does not require registration with the Legal Affairs Bureau. You also do not notify the tax office for corporate tax. Foreign banks, insurers, and securities firms are the exception. They must give prior notification to the Financial Services Agency.
Can a representative office engage in sales activities?
No. A representative office cannot sell products or services, issue invoices, or sign sales contracts. It is limited to preparatory and auxiliary activities. To engage in sales, the foreign company must open a branch office or subsidiary company.
Does a representative office pay corporate taxes in Japan?
Not on auxiliary activities, such as market research and advertising. It also does not charge consumption tax, because it makes no sales. If its activities go beyond auxiliary work, it becomes a permanent establishment. The foreign company then owes corporate tax in Japan.
Can a representative office open a bank account in its own name?
No. Either the head office opens an account, or the representative opens a personal account. A personal account usually includes both names, such as "(representative), Japan Representative Office, (company)." Banks typically ask for a passport, residence card, company brochure, lease, and bank seal.
Can a representative office hire employees?
Yes. A representative office can hire staff in Japan. It must enroll them in social and labor insurance. It also registers with the tax office to withhold income tax from paid salaries. It pays the withheld tax monthly, or twice a year with approval if it has fewer than 10 employees.
Which visa does the representative of a representative office need?
Most foreign representatives use an Intra-company Transferee or an Engineer/Specialist in Humanities/International Services visa. Intra-company Transferee requires one year of work at the head office or an overseas branch. Engineer/Specialist generally requires a bachelor's degree, or ten years of experience (three for some roles).
Do foreign banks need approval to open a representative office in Japan?
Foreign banks, insurance companies, and securities firms must notify the Financial Services Agency before they open one. The Banking Act, the Financial Instruments and Exchange Act, and other financial laws set this requirement. Other foreign companies need no approval or registration.
In closing
A representative office is the simplest and most cost effective way to test the Japanese market. It needs no registration and pays no corporate taxes on auxiliary work.
Its restrictions are strict. It cannot engage in sales activities, sign contracts in its own name, or open a bank account in its own name.
When you are ready to sell, open a branch office or a subsidiary company. Our team at MailMate can help with that next step.
Read also: The Business Manager Visa Japan, Explained
Sources
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