A sole-director sole-shareholder KK kabushiki kaisha is relatively simple to administrate because most matters only need shareholder consent. In my experience having been the President of several KK kabushiki kaishas , the main disadvantages of a KK kabushiki kaisha for a foreign company doing business in Japan are: All directors of a KK kabushiki kaisha share joint and several liability, meaning that if any one director is negligent, a plaintiff can recover damages from all directors regardless of their involvement.
A representative director has authority to bind a KK kabushiki kaisha to an obligation, even without Board approval. Structuring performance-linked compensation for directors can have expensive tax consequences, because even if the KK kabushiki kaisha operates as a cost-center, bonuses or commissions paid to directors can create notional pre-tax profits for corporate income tax calculation purposes.
This means a KK must carefully structure its transfer fees, inter-company management fees, etc. The first 3 months of business in Japan Japanese business networking power Setup a Japanese office? Credibility High Medium Advantages Established reputation, trusted by Japanese customers, business partners, and employees, more scalable Less expensive to incorporate, has most of the same legal protections as the KK.
Can be a considered a pass through entity for US parent investors. Disadvantages More expensive to set up, stricter regulatory requirements Relatively recent legal existence, cannot raise additional capital or attract new investors in the public stock market Investment amount for member is not proportionate to authority. Send Us An Inquiry If you would like to schedule a consultation, please fill out and submit the form below.
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Necessary Necessary. A GK is more economical to incorporate, has slightly lower administration costs, and marginally less corporate governance overhead as compared to a KK, but gives similar litigation protection for its foreign parent. The requirement to file a particular schedule depends on the percentage of ownership of shares of a US person in the Kabushiki Gaisha. A US person US citizen, green card holder or resident alien, a domestic partnership, a domestic corporation, and an estate or trust that is not a foreign estate or trust who may need to file Form is an individual or entity who owns:.
Both the individual income tax return and Form should be filed by the due date—including extensions—for that return. In addition to form and its supporting schedules, the following forms are filing requirements:.
The number of Forms filed should be indicated on Form Greenback has tons of experience helping Americans in Japan with their US expat tax returns. Get started with us now.
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