Establishment of a Japanese Corporation No Longer Requires a Domestic Representative Director
Until recently, administrative guidelines required that at least one representative director of a Japanese corporation maintain a residential address in Japan. This meant that in the process of establishing a new corporation (“Kabushiki Kaisha” or “KK”) in Japan, corporate registration could not be completed unless one or more representative directors had local addresses.
For foreign entities, this often meant having to find someone in Japan to serve as that representative director.
On March 16, 2015, the Ministry of Justice announced that going forward, those guidelines which gave rise to this residency requirement for a representative director of KK would be abolished. Thus, it is now possible for foreign entities to establish a Japanese corporation without the need for a local representative director.
It also appears that in the absence of any rulings or statements to the contrary, this new scheme applies to other forms of Japanese companies as well. Please inquire with us at email@example.com for more details.
Note however that this decision does not apply to requirements for the operations of a foreign company. Article 817(1) of the Companies Law still requires a foreign company to have a representative domiciled in Japan, if such company intends to carry out transactions continuously in Japan. Thus, we caution our foreign clients that, while establishment of corporations has now been simplified, the reality is that a local representative may, depending on the case, still be essential in order for a foreign company itself to do business in Japan.