How is Establishing a Company Different in the U.S. than in Japan?(どう違う?米国と日本の会社設立)

Slicon Valleyの標識画像


Hi. This is John Sasaki again.

For those of you who remember my previous comment about my dog, Ichigo, here is another photo. Now I think she looks like a gremlin. What do you think?


Last time I wrote about 4 basic ways to expand your business to the United States(http://jsvlaw.com/test/blog/1169.html).

This time let me focus on subsidiaries, as this is usually the first step, even if you eventually decide on one of the other ways to enter the U.S. market.

Specifically, let me discuss 5 ways that establishing a company in the U.S. is different than it is in Japan. For the portions on Japan, I have consulted with my friends at AZX.

1. Branches vs. Corporations

When a U.S. company comes to Japan, one of the first discussions is whether to establish a branch or a separate corporation. Part of the reason for this discussion is that branches can be established with less expense and the process is simpler.

In the U.S., there is almost never such a discussion. Foreign companies coming to the U.S. almost always establish separate corporations, basically for 2 reasons.

First, the cost and time difference between establishing a branch versus a separate corporation in the U.S. is not so significant.

More importantly, there are certain legal and tax implications of a U.S. branch, which is not considered a separate legal entity from its parent. A U.S. subsidiary corporation established by a Japanese parent company is a separate entity, from both a legal and tax standpoint. The Japanese parent company is simply a shareholder, with limited liability. And the subsidiary is taxed separately from the parent.

On the other hand, a U.S. branch could expose the Japanese parent company to legal liability in the U.S., as well as U.S. tax-related obligations. My understanding is that the same is basically true in Japan, but the likelihood of a U.S. company trying to sue the Japanese parent of a U.S. branch in the U.S. is much higher than a Japanese company trying to sue the U.S. parent of a Japanese branch in Japan.

So, use a separate corporation in the U.S.

2. Federalism

What is “federalism”, and what does it have to do with corporations? Federalism is the doctrine in the U.S. that each state is like its own country, with its own laws. But, at the same time, each state must comply with applicable U.S. federal laws. Certain matters are governed on a federal level, while others are governed on a state level. Corporations are governed on a state level.

So, whereas in Japan each company is governed by the same law (i.e., Japanese national law), in the U.S. you can and must choose a specific state’s law to govern your corporation. And more than one state’s law could apply to your corporation if you are not careful.

How do you choose the proper state? That’s a discussion for a future article.

3. Contributions in Kind

In Japan, contributions in kind generally require (with certain exceptions) a third party valuation to determine the value of the contributed assets.

In the U.S., each state has its own requirements (as discussed above), but in general there is no third party valuation requirement. The value of the contributed assets can be determined by the board of directors of the U.S. company issuing the shares.

Services can also be used as a contribution in kind in exchange for shares. However, it is important to note that these must be services that have already been performed at the time the shares are issued, not for a promise of services to be provided in the future.

4. Role of Directors

In Japan, historically the directors have managed the day-to-day operations of the company, and corporate auditors have supervised the directors. More recently, Japanese corporations have adopted a more Western approach to corporate management, with executives, who are not directors, having a more active role in management. But directors still generally have executive authority.

In the U.S., each state has its own requirements (as discussed above), but we do not have the function of corporate auditors. Instead, we have officers, who manage the day-to-day operations of the company, and directors, who supervise the officers and provide the company’s overall direction. And directors who are not officers generally do not have executive authority.

So, make sure that you properly understand the roles, responsibilities and authority of directors in U.S. corporations, which can be different than those of directors in Japan. If you want to be involved in the day-to-day management of the company, it is more important for you to be an officer than a director.

5. No Commercial Registration

In Japan, part of the incorporation process is to register certain information at the local legal affairs bureau. This includes (i) the company’s name and address, (ii) the company’s business purposes, which must be specific, (iii) the number of authorized and outstanding shares, (iv) the amount of the capital, (v) the name and address of the representative director, and (vi) the names of the other directors and the corporate auditors.

In the U.S., each state has its own requirements (as discussed above), but we do not have a commercial registration system. Most of the information that is required to be registered in Japan is not required to incorporate a company. The typical information required to incorporate a U.S. company are (i) the company’s name, (ii) the company’s purpose, which does not need to be specific, (iii) the number of authorized shares, and (iv) the name and address of an agent resident in the state of incorporation. The other matters are addressed after the incorporation of the company, and are determined internally, without registration or other public filing. This simplifies the incorporation process, because you don’t need to determine these matters before you start the incorporation process.

This becomes more of an issue after incorporation in Japan, as every change to the information required to be registered must also be registered. In the U.S., most of those changes are handled internally, which greatly simplifies changes in the organizational structure of a U.S. company.

As mentioned above, each state has its own requirements, so make sure to check the actual requirements once you determine the applicable state law. The points above are based on general corporate law principles in the U.S., but different states may have different laws regarding these matters.

If you have any questions, please feel free to contact me at jsasaki@jsvlaw.com.









1. 支社か別法人か







2. 連邦制

「連邦制」とは? 会社と何の関係があるでしょう? 連邦制とは、各州が独立の国のように自州の法律を有する米国の制度です。ただし各州は連邦法にも従う必要があります。一定の事項は連邦レベルで規律され、その他の事項は州レベルで規律されることになります。会社法は州レベルでの規律になります。


どの州を選ぶのが適切か? それは今後の記事で。

3. 現物出資




4. 取締役の役割




5. 商業登記はありません






【参考和文作成:弁護士 林 賢治】

和文の記事:AZX法律事務所 AZXのブログの記事: http://www.azx.co.jp/blog/?p=1253