Pseudo-foreign Companies in Japan

November 13, 2019

Question:

What is a pseudo-foreign company?

Answer:

It is a foreign company with a head office in Japan.

Explanation:

A foreign company is a corporation or other foreign organization established in accordance with foreign laws and regulations, and is considered to be the same as or similar to companies (Companies Act 2-2).

Source: Japanese Law Translation Database System
https://www.japaneselawtranslation.go.jp/

Furthermore, for a foreign company to continue transactions in Japan, it must have a representative in Japan (Companies Act 817-1).

Also note that regardless of it being a foreign company, if it were a foreign company with a head office in Japan or one with the purpose of conducting business in Japan, the foreign company concerned is different from the original foreign company.

Such companies are called pseudo-foreign companies, and it is stipulated that these companies cannot engage in transactions on a continuous basis in Japan (Companies Act 821-1).

Source: Japanese Law Translation Database System
https://www.japaneselawtranslation.go.jp/

A foreign company with a head office in Japan is one whose location for business operations is situated in Japan.

In addition, a foreign company with the main purpose of conducting business in Japan is one established on the premise that doing business in Japan is essential to the company’s existence and is thus established to do so.