This site has until now focused on Japanese companies expanding into Thailand, but from this article we are launching a new six-part series dedicated to the opposite direction: Thai companies expanding into Japan. Thai-capital investments into Japan — in food and beverage, auto parts, logistics, hospitality, and startups — have grown steadily over recent years, and demand for a consolidated view across Thai outbound FX rules, Japanese corporate law, FEFTA (the Foreign Exchange and Foreign Trade Act), the Immigration Control Act, and the Japan–Thailand tax treaty has been rising. This series is designed to fill that gap.
Across the six parts, Part 1 addresses entry vehicles (this article), Part 2 the Japanese inward direct investment regime under FEFTA, Part 3 the practical mechanics of incorporation, Part 4 the Business Manager visa, Part 5 taxation and the Japan–Thailand treaty, and Part 6 employment and HR. All information is current as of April 2026.
The audience for this series is the Thai side — a company or individual Thai investor — with Japan as the host jurisdiction. That inverts the angle used elsewhere on this site. Each topic is written in the “in Japan, the rule is X; by contrast, in Thailand, …” order.
Why the Choice of Vehicle Is the First Real Decision
When a Thai company begins to think about going to Japan, the first decision with compounding consequences is the choice of entry vehicle. Japan offers four structures — (i) a subsidiary (Kabushiki Kaisha or Godo Kaisha), (ii) a branch of a foreign company, (iii) a representative office, and (iv) a joint venture — and they differ on legal personality, tax, liability exposure, cost, and exit difficulty.
Switching vehicles later is possible, but moving from a representative office to a subsidiary typically means redoing contracts, reopening bank accounts, re-hiring staff, and reconciling tax positions. Looking at Japan through the lens of Thailand’s Foreign Business Act (FBA) — which regulates foreign participation by industry list — is a common source of mis-framing, because Japan’s regulatory logic is different. The four vehicles, and then a decision framework, follow.
The Four Entry Vehicles
① Subsidiary (Kabushiki Kaisha / Godo Kaisha)
A Thai parent can capitalise a stand-alone Japanese legal entity. Japan offers two widely used forms: the Kabushiki Kaisha (“KK”, a joint-stock company) and the Godo Kaisha (“GK”, Japan’s LLC-equivalent). The parent’s liability is limited to its investment, and the subsidiary can carry out all Japanese operations — trading, employment, and tax — under its own name.
| Item | Kabushiki Kaisha (KK) | Godo Kaisha (GK) |
|---|---|---|
| Governance | Shareholders’ meeting plus directors are mandatory; board of directors and statutory auditor are optional | Members (equity-holders) run the company directly; flexible governance |
| Articles of incorporation | Notarisation required | Not required |
| Approximate setup cost | ~JPY 250,000 (registration tax of JPY 150,000 plus notarisation ~JPY 50,000, etc.) | ~JPY 100,000 (registration tax of JPY 60,000, etc.) |
| External credibility | High — the default for listed and major-counterparty business | Some counterparties still require a KK |
| Suitability for IPO / M&A | High | Conversion to KK is typically required |
| Corporate tax | Same as GK (no substantive difference) | Same as KK |
As a rule of thumb, choose a KK when governance, credibility and future IPO/M&A optionality matter, and a GK when speed and cost are primary. Confirm the latest registration fees with the Legal Affairs Bureau.
Note: under the Notarial Fee Order amendment effective 1 December 2024, the KK articles-notarisation fee is halved to JPY 15,000 where capital is under JPY 1 million, all founders are natural persons (three or fewer), the founders subscribe to all shares issued at incorporation, and no board of directors is established. For Thai-parent expansions where the founder is the Thai parent (a legal entity), the half-fee is unavailable, and the JPY 30,000–50,000 fee in the table above continues to apply.
② Branch of a Foreign Company
Rather than forming a Japanese legal person, the Thai parent establishes a Japanese office of the Thai company itself. Articles 818 to 823 of the Companies Act govern foreign companies, and commercial registration is mandatory under the Commercial Registration Act. At least one representative in Japan must be appointed, and at least one such representative must have a residential address in Japan.
Contracts are signed in the Thai parent’s name, so the parent bears direct contractual exposure for Japanese operations. For tax purposes, the branch is a permanent establishment (PE) and profits attributable to the PE are subject to Japanese corporate tax. PE allocation issues are covered in Part 5.
A structural limit worth knowing is the “deemed foreign company” rule under Article 821. A foreign company whose principal business activity is in Japan is not permitted to engage in continuous transactions in Japan — the provision is designed to prevent circumvention of Japanese law. A branch cannot therefore be used to run a Japan-centric business of material scale.
③ Representative Office
The lightest vehicle: no legal personality and no corporate tax (in principle). Permitted activities are narrow — information gathering, market research, publicity, purchasing of goods or materials, and communication with overseas related parties. Sales activity, contract execution, and collection of consideration are prohibited, and doing them converts the risk profile — a branch or subsidiary becomes required.
Withholding on employees’ salaries remains, but corporate tax does not arise as long as activities stay within scope. Setup and running costs are the lowest of the four, but the conversion cost when the business grows — through a branch or subsidiary — should be factored in from day one.
④ Joint Venture
A Thai investor forms a new Japanese company with a Japanese partner. The shell can be a KK or a GK. What matters is the Shareholders’ Agreement (SHA): board composition, reserved matters and veto rights, deadlock resolution, and exit mechanics (transfers, tag-along, drag-along).
If the Thai side’s equity is 10 percent or more, the investment falls within the Japanese inward direct investment regime under FEFTA. Governing law and the dispute resolution clause of the SHA are designed with the same framework as our Thai Contract Essentials Part 5 (dispute resolution).
Comparison of the Four Vehicles
| Item | Subsidiary (KK/GK) | Branch | Representative Office | Joint Venture |
|---|---|---|---|---|
| Japanese legal personality | Yes (separate) | No (part of the parent) | No | Yes (separate) |
| Inward direct investment | Yes | Yes (branch establishment) | Generally no | Yes |
| Commercial registration | Required | Required (foreign company) | Not required | Required |
| Sales activity | Allowed | Allowed | Not allowed | Allowed |
| Contracting party | The subsidiary | The Thai parent | None | The JV |
| Corporate tax | Worldwide (domestic corporation) | PE-attributable income only | Generally none | Worldwide |
| Parent liability | Limited to investment | Full and direct | Scope of parent activity | Limited to investment |
| Setup cost | Medium to high | Medium | Low | Medium to high |
| Exit cost | Liquidation (6–12 months) | Relatively simple closing registration | Simple closing | JV termination plus liquidation |
| External credibility | High (especially KK) | Medium | Low | Depends on the partner |
| Visa availability | Business Manager, etc. | Intra-company Transferee / Business Manager | Intra-company Transferee | Business Manager, etc. |
A Four-Step Decision Framework
- Step 1 — Will you carry out sales, contracting or invoicing in Japan?
- No (information gathering and market research only) → Representative Office
- Yes → go to Step 2
- Step 2 — Will you share management with a Japanese partner?
- Yes → Joint Venture (build the SHA with reserved matters, deadlock and exit)
- No → go to Step 3
- Step 3 — Do you want to insulate the parent’s liability, or anticipate IPO / M&A / large financings?
- Yes → Subsidiary (prefer KK for governance and credibility)
- No (small scale, short-term) → Branch or GK
- Step 4 — Is your sector subject to a prior notification requirement under FEFTA?
- If yes, build the ~30-day screening window into the project plan (covered in Part 2).
The Thai-Side Piece — BOT Rules and Internal Approvals
Outbound investment from Thailand sits under the Bank of Thailand’s foreign exchange rules. Thai residents are generally permitted to make outbound direct investments within defined conditions and thresholds, but prior BOT approval may still be required depending on size, sector, and related-party characteristics. The current thresholds and procedures should be confirmed on the BOT’s FX regulation pages, and the Japan-entry funding plan should be designed together with the Thai-side FX process.
Internally, Thai-parent board approvals, and shareholder approvals where the corporate form requires them, should be sequenced early. The taxation of dividends received from the Japanese subsidiary and withholding at source are structured around the Japan–Thailand tax treaty (covered in Part 5). Where relevant, the Thailand Board of Investment’s Thai Overseas Investment Support Center (TOISC) offers support that can be worth exploring.
Japan vs. Thailand — Structural Differences to Internalise
| Topic | Japan | Thailand |
|---|---|---|
| Core of foreign-investment regulation | Inward direct investment regime under FEFTA (prior notification for listed sectors) | Foreign Business Act (list-based sector regulation) |
| Minimum capital | JPY 1 in principle, but the Business Manager visa requires JPY 30,000,000+ in capital following the 16 October 2025 reform — see Part 4 | THB 2,000,000 per employed foreigner (for non-BOI companies) |
| Foreign ownership of real estate | Generally permitted | Generally not permitted (limited BOI-based exceptions) |
| Incorporation mechanics | Application to the Legal Affairs Bureau; practitioners (judicial scrivener / administrative scrivener) typically involved | Shifting toward full online completion via the Department of Business Development (DBD) |
| Consumption tax / VAT on a new entity | Two-year exemption if capital is under JPY 10 million (with exceptions). For taxable periods starting on or after 1 October 2024, however, a new subsidiary can be a “specified newly established corporation” subject to consumption tax from year one if a related determining person (e.g. the parent) has annual income — including offshore income — above JPY 5 billion. CP-, SCB- and similar large-cap Thai-parent 100% subsidiaries should check this carefully. | VAT registration required once the revenue threshold is exceeded |
Common Pitfalls
- Operating beyond the scope of a representative office — sales or invoicing activities trigger PE risk on the tax side and status-of-residence issues on the immigration side
- Starting with a GK, only to be told by a counterparty that they “only deal with KKs” — start with a KK when public-sector or major-corporate counterparties are in scope
- Becoming a minority shareholder in a JV without proper veto design — without reserved matters, deadlock resolution and exit clauses, you are exposed to being decision-making silenced
- Forgetting the FEFTA prior notification — executing an in-scope investment before notification risks illegality (see Part 2)
- Appointing only non-resident directors — technically possible, but frequently obstructs bank account opening, tax filings, and day-to-day operations; placing at least one Japan-resident director is the safer design
Coming Up Next
Part 2 turns to the next step after choosing the vehicle: the inward direct investment regime under FEFTA. We will walk through the list of designated sectors, the notification route (via the Bank of Japan to the Ministry of Finance and line ministries), the review window, and the practical considerations under the national security, public order and public safety review standards — areas where Thai investors most often underestimate preparation time.
Get in Touch
For Thai-capital expansion into Japan across corporate law, FEFTA, immigration, and the tax treaty, JTJB’s Bangkok office (Thai law and on-the-ground practice) and Tono, Tanami & Kosada Law Firm (Tokyo, all aspects of Japanese law) work together to provide a single-window service. Please feel free to contact us from the earliest stage of vehicle comparison.
Related
- Thai Companies Expanding into Japan, Part 4: The Business Manager Visa — October 2025 Reform
- Thai Contract Essentials Part 5 — Thai Courts vs International Arbitration (Dispute Resolution)
- Thai PDPA Practical Guide 2026
- Thailand Foreign Business Act and Nominee Reform — April 2026
This article is for general informational purposes based on publicly available information as of April 2026 and does not constitute legal advice. For specific matters, please consult a qualified professional. Our practice handles Japan-entry matters through cooperation between JTJB International Lawyers’ Thai-qualified attorneys and the Japanese-qualified lawyers of Tono, Tanami & Kosada Law Firm.