All Company Setup Options Explained in Native English (KK, GK, Branch)
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Let us explain the different types of companies in Japan and which one is best for you.
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The KK is a joint stock company, equivalent to the American C Corp. The GK is a limited liability company (LLC). Either the KK or GK could be right for your company but your decision will affect everything that happens once it is formed including tax, corporate secretarial, financial, HR and immigration compliance. Let us help you make the right choice for you and avoid delays regarding what comes next. If you have questions about establishing a Japanese Branch Office, please contact us to discuss further.
See more information about the KK and GK below:
Kabushiki Kaisha Advantages
Most common type of entity in Japan with a higher credibility which can be helpful when dealing with local customers, employees and business partners. The GK, while still very credible, is a newer type of entity recently established in 2006, and therefore still has a weaker image in Japan. That being said, the difference between a KK and a GK in terms of image has become impossible to quantify now that the GK has been around for a while.
KK allows for a scalable organization, with the ability to have a Board of Directors, list on the stock exchange, and raise additional money through selling shares, etc. In contrast the GK can do none of these things.
Clear organizational distinction between ownership (shareholders) and management (directors). In contrast GK investors are legally considered partners, who help run the company, and investment amount is not automatically proportionate to authority over the company or voting rights.
Goudou Kaisha Advantages
The registration process and ongoing corporate compliance for GKs is simpler and less expensive compared to KKs. KKs are required to submit an Articles of Incorporation, and annually hold shareholders' meetings, publish financials and submit other reports, whereas GKs do not have any of these requirements.
If the GK is wholly owned by an American corporation, the American corporation has the option to elect the GK to be considered a “disregarded entity,” allowing it to be treated as a branch of the US for US tax purposes. This option does not exist with the KK.
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