A representative office of a foreign corporation in Japan is limited in its type of activity, performing only preparatory and auxiliary operations, such as conducting marketing research, collecting data and establishing business contacts.
A representative office has no right to enter into commercial transactions or receive income. Since it does not conduct commercial activities, there are usually no tax liabilities, and the process of registering a representative office in Japan is less formal.
It should be noted that regardless of the chosen form of organization, it is necessary to strictly adhere to the laws governing the registration, management and preparation of financial statements of enterprises in Japan. This includes maintaining records in accordance with local standards, filing tax reports and performing corporate procedures. The need for an official address and knowledge of local business practices significantly affects the prosperity of a business in Japan.