For foreign companies, there are three main ways to do business in Japan.

First, you may appoint a Japanese company as your agent in Japan. Your services or products are sold through the agent. In this structure, you are not a party to the contracts with customers and are therefore not directly liable for obligations arising from those contracts.

Second, you may establish a branch office in Japan and sell your services or products directly. In this case, you enter into contracts with customers in your own name and are directly liable for any obligations arising from those contracts.

In both cases, if you continuously conduct business in Japan, you are required to register as a foreign company under the Companies Act. You must appoint at least one representative who resides in Japan. If you establish a branch office, you must also register the address of the branch.

Third, you may incorporate a separate legal entity under the Companies Act. In practice, a Kabushiki-Kaisha (KK) or a Godo-Kaisha (GK) is typically used. In these structures, the owners (i.e., shareholders or members) have limited liability, meaning they are not liable for the company’s obligations beyond the amount of their capital contribution. In this case, the KK or GK itself becomes the contracting party with customers.