A branch office is not regarded as an independent corporation, and it is
supposed to engage in business activities such as providing services, purchasing
stock, import and sale sbased upon determinations and directions of its
headquarters. In transactions with other companies, a branch is entitled
to execute agreements with such companies on behalf of its headquarters.
In certain industries such as banks, the oil industry and the gas extraction
industry, the laws may require corporations to have a branch form in order
to enter those industries; therefore, it is recommended to review the related
laws and regulations of the industry in advance.
Change
From Japan Branch to Japanese Corporation
There are two ways for a foreign company to upgrade its branch office
to a corporation in Japan: to establish a corporation by investing
the property of the branch office in such corporation; and to establish
a corporation and then assign the property of the branch office
to such corporation. The Corporate law stipulates the establishment of Japanese corporations.
If a foreign company plans to conduct long-term business operations
in Japan, it may be beneficial to establish a Japanese corporation
without establishing a branch office in order to avoid troublesome
transitional work incidental to a change of corporate form.
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