Representative Office (type of business entity)

Foreign companies looking to expand into Japan may initially conduct market research and other “non-commercial transactions” through Representative Office.

Representative Office can not be registered in Japan. So it is considered, for tax purpose, as the employee of the Representative Office is operatating office by themselves (like freelance). 

Representative Office is not carrying on sale-type activities in Japan, and therefore not generating any income through its activities. However, the employees of the Representative Office will be liable for Japanese income taxation if the representative office receive income in Japan.

Representative Office can not open bank account in Japan. So the employee of the office must open personal bank account for the Represetantive Office. If the Representative Office hire employee, the employee is hired by the employee for legal aspect.