Terminology

Affidavit

Foreigners who live outside of Japan are required to obtain affidavits made by notaries public in their home countries. An affidavit is accepted as a substitute for resident card. Your affidavit is made with the information extracted from many documents such as articles of incorporation, bylaw, incorporation registration certificate and corporation nationality certificate, and should be legalized by a notary public in your home country.

Business Transfer

All or a part of business of one company is transferred to another company as a business deal. The procedures of business transfer are also done in accordance with the provisions of the Corporation Law of Japan. In case of transferring any credits or debts and contractual positions that constitute the business, it is necessary to get approval from each party concerned. This is a point where business transfer is different from corporate separation.

Branch

Independent corporate status is not given to a branch. A branch is treated as a part of a foreign company incorporated overseas. This is a point where establishing a branch is different from establishing a subsidiary (a Japanese corporation).
As stated above, for a foreign company to conduct business in Japan, it must have a branch or a subsidiary. The procedures of setting up a branch are relatively simple compared to establishing a subsidiary. All you need to do is deciding a base of operation, appointing the branch representative and registering necessary matters with administrative authorities.
Once you have a branch, you can open a bank account or rent /lease a real property.

Certificate on Registered Matters

Foreigners with registered residences can apply for "Certificate on Registered Matters." In the real estate registration procedures, this certificate is accepted instead of a resident card.

Corporate Separation

All or a part of the assets and liabilities of one company are taken over by another company. Corporate separation is classified into two types, "corporate separation by absorption" and "corporate separation by new incorporation". In the former case, the assets and liabilities are taken over by the existing company, and by the new company in the latter case. Further classification is made by considering who takes over the shares issued by transferee company in exchange for the transferred assets and liabilities. When the shares are issued by transferee company to transferor company, it is referred to as "bunsha" type, and when the new shares are issued to the shareholders of the transferor company, it is referred to as "bunkatsu" type. A type of corporate separation can be chosen out of the four classifications. The procedure of corporate separation must be taken in accordance with the provisions of the Corporate Separation Law of Japan. The process differs depending on which type is chosen.

Corporate Separation by Absorption

Under a "corporate separation by absorption" structure, all or a part of the transferee company's assets and liabilities are assumed by other existing companies.

Corporate Separation by New Incorporation

Under this structure, all or a part of the transferor's assets and liabilities are assumed by a newly established company. Corporate separation by new incorporation can be done either by one company or jointly by multiple companies. This approach is generally used for the purpose of reorganization within group companies.

Equity Transfer

A newly established company acquires all the issued stocks of a target company. As a result, a relationship of parent and child company is created.

Intracompany Transferee Visa

This is the visa for foreign nationals who are transferred from companies established in foreign countries to headquarters, branches or other business places in Japan to be engaged in engineering or international services for a limited period of time.

Investor / Business Manager Visa

This is the visa for foreign nationals (1) who invest, start and operate business in Japan and (2) who operate and manage business in Japan.

Merger

Merger is a M&A approach that combines two or more companies to form a single company that takes over all the rights and obligations of all the companies involved.

Merger by Absorption

One company absorbs another company and takes over all the assets and liabilities of the absorbed company.

Merger by Incorporation

More than two companies merge to form a new company that assumes all the assets and liabilities of the resolved companies.

Representative Office

Before foreign enterprises officially start their business in Japan, they make representative offices for the preparatory operations. Direct business activities are not allowed at such a representative office. But it is possible to do the activities such as market research, information collection, purchasing office items and advertisement. To conduct the business in Japan, a foreign company needs to make a branch or a subsidiary (a Japanese corporation) officially registered.
Since it is not allowed to open a bank account or to rent/lease a real property under the name and address of a representative office, a headquarters' manger or a representative office manager needs to use his/her personal name in some cases. Representative offices do not need to be registered with any administrative authorities.

Signature Certificate

Foreigners with alien registration can request for issuance of seal registration certificate. Foreigners without alien registration need "signature certificate" to certify the authenticity of their signatures. You can obtain information about issuance of signature certificate from your home country's embassy in Japan.

Skilled Labor Visa

This is the visa for foreign nationals who will be engaged in activities which require special industrial techniques or skills.

Stock Swap

One company acquires all of the issued stocks of a target company.
As a result, a relationship of parent and child company is created.

Stock Transfer

One company acquires stocks from stockholders of another company to make it a subsidiary. The interested company acquires stocks from each stockholder of the target company through individual negotiation.

Subsidiary (a Japanese corporation)

Establishing a subsidiary in Japan means that making an independent Japanese corporation capitalized by foreign companies.
Unlike a branch, a subsidiary is a separate company from the parent company overseas. Therefore, any credits or debts incurred from the business activities by the subsidiary belong to the subsidiary. The parent company overseas takes responsibility as a capital investor as provided in the Japanese law.
When a foreign company intends to establish a subsidiary in Japan, it needs to select a corporation type from the types provided in the Japanese Corporation Law. There are four corporation types; joint-stock corporation, limited liability company, unlimited partnership and limited partnerships. The last two types are rarely chosen because equity participants bear unlimited rather than limited liability. Most of the cases, joint stock company or limited liability company is chosen. You can establish a company by registering it through the procedures required by applicable laws and regulations.
Since a subsidiary has a corporate status, you can open a bank account or rent/lease a real property under its name.