cs-trans.biz
As Japan does not have any “registered agent system” or equivalents,
it is not easy for a non-resident foreigner to incorporate or form a company in
Japan. According to the Japanese
law, at least one representative or director must have a residence in Japan to
form or keep a company. The same is also required if a foreign
corporation is going to establish an office. Such foreign corporation must appoint a representative in
Japan. Such representative may be
the same person as the representative of the corporation, but is required to
have an address in Japan. Under this situation, it may be a
convenient way to buy a Japanese company when a foreign person wishes to have
his/her business in Japan, especially if such foreign person does not want to
reside in the small apartment in the small, Far East country. To buy a company already operating in
the country is also advantageous because it will save your energy and time to
build a new business in a country of which trade customs is quite unknown to
you. In general, there are four ways to deal a
Japanese company: 1. Transfer of the equity shares 2. Transfer of the operation 3. Merger or consolidation 4. Issuance of new stocks to a third party The differences among those above are
principally the different taxations.
In the case of transferring the equity shares, the shareholders selling
those equity shares are taxed; in the case of transferring the operation, the
company selling the trade rights (goodwill) and other properties are taxed; in
the case of issuing new stocks to a third party, the older shareholders have no
benefits to be taxed (on the contrary, they may suffer due to their decreased
shares in the whole capitalization).
Among them, to deal a company through the
merger or consolidation is too complicated for small companies. The most common way to deal is,
needless to say, through the transfer of the equity shares. It is interesting to know that some of the
company dealings are done for the purpose of dealing the real estates. In Japan, the real estates such as a
land or building are, in general, most expensive. Accordingly, taxation on such dealings is also high. However, the tax on the stock dealing
is not so high. Therefore, if you
want the real estates owned by a company, it may be less expensive to buy the
whole company than directly buy the real estates. The real estates are still owned by the same company, but
you own them indirectly through your ownership of the company. It must be noted, however, it is not
popular for Japanese company owners to sell their company if it is still making
profits. A profitable company may
sell for a good price, but it is said that most of the Japanese companies to be
sold have problems unsolvable by the company owners. It is most probable that you should reconstruct and improve
the operation of the company after purchasing it. One of the possible biggest problems is the liability out of
books. You must especially be
careful in the prior research to find such hidden debts. Furthermore, if you are a non-resident
foreign person, you are subject to the obligation to report under Foreign
Exchange and Foreign Trade Act when you are purchasing a Japanese company. à Resources Books on Japan [Law] Japanese Laws
Promulgated in 2003 Japanese Laws Promulgated in 2002 Japanese Laws Promulgated in 2001 Civil Code Commercial Code
Law Application Principles Act Banking Act Investment Trust and Investment
Corporation Act Foreign Exchange and Foreign Trade
Act Business Registration Act Customs Act Customs Tariff Act Foreign Lawyers Act Can a Small
Business Make Money from Japan? Fund-Raising in/from Japan Venture
Capitals in Japan How to Buy a
Real Estate in Japan? How to Buy a
Company in Japan? [Swiss Private Bank Account for Free]
[Offshore Trust vs. Liechtenstein
Foundation] [Japan Law] [Japan Business] [e-book
Publishing]
List of
Recently Promulgated Japanese Laws
English
Translations of Major Japanese Laws
Japanese Business Information