Legal Responsibility of Representatives in Japan

October 30, 2019

Question:

Please tell me the most basic method for foreign companies to do business transactions continuously in Japan.

Answer:

It is necessary to have a representative in Japan.

Explanation:

Foreign companies cannot continuously perform transactions in Japan unless they duly appoint and register a representative in Japan (Articles 817 and 818 of the Companies Act).

Anyone who conducts transactions without registering both the representative and the company itself, then the person who conducted those transactions and the foreign company are jointly responsible for settling obligations arising from said dealings (Companies Act 818-2).

Thus, the most basic way for foreign companies to continuously perform transactions in Japan is to appoint a representative in Japan and register their company.

For example, if you are not doing in-store sales to Japanese customers, there is no need to set up a sales office in Japan. In such a case, it is sufficient to just select and register a representative manager in Japan.