Japan PEO Hybrid Structure
Where a Japanese legal entity is required it may still be possible to simplify the structure.
and reduce costs via combining a fully owned Japan subsidiary with a Japan PEO solution
A Business Support Agreement is put in place between your company (outside Japan) and JPS. This agreement is carefully drafted to ensure that your company receives the dedicated support that it requires in Japan while minimizing tax risk – especially Japan permanent establishment (“PE”) risk.
- JPS’s profesionals will assist you to establish a fully owned Japan subsidiary. Most clients will choose either a Godo Kaisha (“GK”) or a Kabushiki Kaisha (“KK”). Visit our FAQ to learn more about choosing a Japan entity that will suit your needs.
- Once the new subsidiary is established JPS can handle all the associated requirements including initial corporate tax filings, establishing bank accounts, ongoing corporate tax compliance, and Japanese VAT filings.
Why Use a Japan Hybrid PEO?
Under this arrangement, employees are hired under a PEO arrangement. At the same time, the client maintains a naked legal entity in Japan. The reasons for having this legal entity in place may include:
- Some Japanese customers may require that you have a legal entity in Japan.
- Maintaining a legal entity in Japan can sometimes support a strong image for a foreign company.
How JPS can assist.
Japans ex-Big 4 professionals can support a PEO Hybrid structure via:
- Providing a PEO solution to support employees in Japan.
- Initial consulting regarding selecting an appropriate entity.
- Advice regarding foundation issues including shareholders and paid in capital.
Provision of legal registered address and nominee directors (if required).
Incorporation of the entity.
Basic compliance to ensure that the Japan entity remains in good standing. This generally consists of limited corporate tax compliance and some annual accounting support.