Registering a Branch Office (Shiten) in Japan: Registration and License Tax Considerations

Japanese Attorney at Law - Bengoshi L.L.

• 5 min read

For companies operating in Japan, establishing, relocating, or closing a branch office (支店 - shiten) are common strategic decisions made to optimize operations, expand market reach, or streamline the business structure. Each of_ these actions necessitates formal registration procedures with the Legal Affairs Bureau (法務局 - Homukyoku) to update the company's official records. Consequently, these registrations trigger Japan's Registration and License Tax (登録免許税 - Toroku Menkyo Zei), with varying amounts depending on the nature of the registration (establishment, relocation, or closure) and where the registration is filed (i.e., at the head office registry versus the branch office registry).

Understanding these tax implications is essential for businesses to accurately budget for such administrative undertakings and ensure compliance.

I. Establishment of a Branch Office (支店の設置 - Shiten no Setchi)

When a company decides to open a new branch office after its initial incorporation, this constitutes a change in its registered particulars and must be duly recorded.

  1. Internal Decision-Making: The decision to establish a new branch, including its location and date of establishment, is typically made by a resolution of the board of directors (or by a majority of directors if the company does not have a board). This authority cannot generally be delegated to individual directors.
  2. Registration Filings: The establishment of a branch office must be registered at two locations:
    • At the Legal Affairs Bureau governing the company's head office (本店所在地 - honten shozaichi): This updates the main corporate register to include the new branch. The registration must be applied for within two weeks from the date the branch is established.
    • At the Legal Affairs Bureau governing the new branch office's location (支店所在地 - shiten shozaichi): This establishes the branch's presence in that jurisdiction. This registration must typically be applied for within three weeks from the date of establishment (or from the date of the head office registration).
  3. Information to be Registered: Key details include the address of the new branch and the date of its establishment.

B. Registration and License Tax for Branch Establishment

The tax amounts differ for the head office and branch office registrations:

  • Registration at the Head Office Registry:
    • Tax: ¥60,000 per new branch office established. This is as per the Registration and License Tax Act, Appended Table No. 1, Item 24(1)(ル).
    • If multiple branches are established simultaneously and registered under a single application at the head office, the ¥60,000 fee applies to each new branch. For instance, establishing two new branches would incur ¥120,000 in tax at the head office registry.
  • Registration at the Branch Office Registry (for the newly established branch):
    • Tax: ¥9,000 per application. This is as per Item 24(1)(コ)(イ) of the same table. This fee is for registering the branch's existence in its own local jurisdiction.

Example: A company establishes one new branch.

  • RLT at head office registry = ¥60,000.
  • RLT at the new branch's local registry = ¥9,000.
  • Total RLT for establishing one branch = ¥69,000.

II. Relocation of a Branch Office (支店の移転 - Shiten no Iten)

When an existing branch office moves to a new address, this also requires registration updates. The complexity and tax implications can vary slightly depending on whether the relocation is within the same Legal Affairs Bureau's jurisdiction or to an area covered by a different one.

  1. Internal Decision-Making: Similar to establishment, the decision to relocate a branch is typically made by the board of directors.
  2. Registration Filings:
    • Relocation to a New Jurisdiction (管轄外移転 - kankatsugai iten): If the branch moves to an area governed by a different Legal Affairs Bureau:
      • Registration is required at the head office registry (within two weeks).
      • Registration is required at the old branch office's registry (to record its departure from that jurisdiction, within three weeks).
      • Registration is required at the new branch office's registry (to record its arrival in the new jurisdiction, within three weeks).
        Applications for the old and new branch locations are often submitted via the head office registry or the old branch registry.
    • Relocation within the Same Jurisdiction (管轄内移転 - kankatsunai iten): If the branch moves but remains within the geographical area covered by the same Legal Affairs Bureau:
      • Registration is required at the head office registry (within two weeks).
      • Registration is required at the branch office's registry (which remains the same office, just updating the address, within three weeks).

B. Registration and License Tax for Branch Relocation

  • Registration at the Head Office Registry:
    • Tax: ¥30,000 per relocated branch office. This applies whether the move is within the same jurisdiction or to a new one. This is as per Item 24(1)(ヲ) of the Appended Table.
    • If multiple branches are relocated and registered in a single application at the head office, the ¥30,000 fee applies to each relocated branch.
  • Registration at the Branch Office Registry(ies):
    • For relocation to a new jurisdiction:
      • At the old branch office's registry: ¥9,000 per application (for registering the "departure").
      • At the new branch office's registry: ¥9,000 per application (for registering the "arrival").
    • For relocation within the same jurisdiction:
      • At the branch office's registry (which remains the same office): ¥9,000 per application (for registering the new address within that jurisdiction).

Example 1: One branch relocates to a new jurisdiction.

  • RLT at head office registry = ¥30,000.
  • RLT at the old branch's local registry = ¥9,000.
  • RLT at the new branch's local registry = ¥9,000.
  • Total RLT = ¥48,000.

Example 2: One branch relocates within the same jurisdiction.

  • RLT at head office registry = ¥30,000.
  • RLT at the branch's local registry = ¥9,000.
  • Total RLT = ¥39,000.

III. Closure of a Branch Office (支店の廃止 - Shiten no Haishi)

When a company decides to close down a branch office, this act also requires formal registration.

  1. Internal Decision-Making: The decision to close a branch is typically made by the board of directors.
  2. Registration Filings: The closure must be registered:
    • At the head office registry (within two weeks of closure).
    • At the registry office governing the location of the closed branch (within three weeks).

B. Registration and License Tax for Branch Closure

  • Registration at the Head Office Registry:
    • The closure of a branch is treated as a "change in registered particulars" (登記事項の変更 - toki jiko no henko).
    • Tax: ¥30,000 per application. This is as per Item 24(1)(ツ) of the Appended Table.
    • Notably, if a company closes multiple branch offices simultaneously and these closures are included in a single application to the head office registry, the tax remains ¥30,000 for that one application. It is not per branch closed, unlike establishment or relocation at the head office level.
  • Registration at the Closed Branch Office's Registry:
    • Tax: ¥9,000 per application to register the closure in that local jurisdiction.

Example: A company closes two branch offices, A and B. The closures are registered in one application at the head office.

  • RLT at head office registry = ¥30,000 (for the single application covering both closures).
  • RLT at Branch A's local registry = ¥9,000.
  • RLT at Branch B's local registry = ¥9,000.
  • Total RLT = ¥48,000.

General Principles for Payment of Registration and License Tax

As with other types of corporate registrations:

  • The Registration and License Tax must be paid at the time of submitting the application.
  • Payment can be made in cash (with an official receipt attached), by affixing revenue stamps (収入印紙 - shunyu inshi) for the correct amount, or via electronic payment if the application is filed online.

Conclusion

Managing a company's network of branch offices in Japan involves distinct registration requirements and associated Registration and License Tax liabilities for establishment, relocation, and closure. The tax amounts vary significantly depending on whether the registration is filed at the head office registry (where per-branch fees often apply for establishment and relocation, but a per-application fee applies for closures) or at the local branch office registry (which typically has a lower, per-application fee). Companies should carefully factor these tax costs into their decisions regarding branch network strategy and ensure timely and accurate registration to maintain compliance with Japanese corporate law. Given the specific rules for each scenario, consultation with a judicial scrivener (司法書士 - shiho shoshi) is advisable for handling these registration procedures.