to global topsite mapprivacy policycontact
to topabout usよくある質問

 



Q1: Is there any juridical rule for the bookkeeping of a company?

A1: The accounting of the company is related to various laws such as tax law, company law or financial transaction law. But as long as it is registered on double-entry book-keeping basis, it is all right. If you keep books other than double-entry method, you miss some faborable treatment in tax. Japanese book-keeping system are almost the same as international accounting standard, though partially, there exists Japanese specific accounting standard. Please ask details to the specialist.

Q2: Is there a rule in the frequency of book-keeping? Like for every month, every year or quarterly?

A2: With respect to corporate income tax or company law, you need to close your book at least once a year. As for the consumption tax, you can select quarterly or monthly tax filing but most companies select annual basis. But some companies such as listed in Stock Exchange are required under more complex rules.

Q3: Can we outsource our book-keeping process to an accounting office? How about tax declaration?

A3:Book-keeping can be done by any third party. However, preparation of tax return must be done by anyone with lisence to do so (certified public tax accountant, etc.) unless your company does it by itself.

Q4: How much is the usual pay rate for the book-keeping / tax return preparation service by an accounting office ?

A4: It depends on the content and the quantity of it. However, when you just ask for the bookkeeping and tax return, the general price range is 100,000 yen ~ 1,000,000 yen per year. Usually, the fee will be decided considering that how many working hours will be necessary for the accounting office.

Q5: I would like to establish a subsidary company in Japan, but I have not found the proper financial manager yet. Until then, is it possible to ask the fund management to an accounting office?

A5:It is possible. However, there are not many accounting offices doing it. You will probably need a good research to find a suitable accounting office. It is better to ask some business person about the reputation of the office if possible.

Q6: (Concerning the Japanese subsidiary company) We will do our accounting by in-house staff. Can we ask audit to an Japanese account office ?

A6:Yes. If you have a big budget, it is usual to ask Big 4 Accounting firm in Japan. But there are many small-but-reliable accounting offices and you can save your budget by using them.

Q7: I want to takeover an existing company in Japan rather than found a new company. What kind of methods are there?

A7:The simplest way is to buy the stock of the target company. Otherwise, if you have your own branch in Japan already, you can buy major asset from the target company and take over its business.

Q8: How should a price be decided when buying a company? Is there any business practice unique to Japan?

A8: To decide the value of the company, there are basically two methods. one is to value the company's net asset, the other is to value its future profit. Net Asset method focuses on the balance sheet of current cost. The latter method uses the projection of earnings or cash flow. Since neither of them is perfect, you should decide considering both results. In addition, among Japanese, there sometimes occur some special cases such as calculating the stock prices based on a past dealing case. When such special proposals are requested from your counter part, it will be good to consult with an expert.

Q9: I want to ask evaluation of our company to a professional. Where should I ask to? How much is the avarage fee ?

A9: There are financial institutions, accounting offices, and consultant companies, etc. that specialize in company valuation. Fee and quality are vary considerably. We reccomend that before carrying out a formal request, you should make some simple questions to them about their knowledge, experience, and so on.

Q10: What is "Due Diligence" specifically?

A10: "Due Diligence" is used in various senses. But it is often used as "the appraisal at the purchace of the company". In this case, due diligence means to make an appraisal of the target company such as to see if there is no accounting error or fraud, to measure their assets at fair value, etc.

Q11:What else do I have to take care when purchasing a company?

A11:In addition to appraising financial data, it is necessary to check the problems in management after the purchase. For instance,from the legal point of view, check the existing contracts, or measure risks to be sued. From the marketing point, check the growth potential of the target company, etc.

Q12: What kind of methods are there for fund raise in Japan?

A12: Raising funds by issuing stock,(capital increase) or concluding money mutual contract (the loan) are most common ways. There is also a way of the corporate bond, but it is not often used for an unlisted company. Moreover, you can procure capital from a financial institution, individual investor or from your business partner. If your company already have certain dgree of business achievement,there is also a method of raising a big fund by listing on the securities market.

Q13: When borrowing money from the bank in Japan, what do I need to care about?

A13: Most Japanese banks will not lend money to a newly establishing company. They often request your management result in Japan for at least 2 years. Exceptionally, the financial institution of government affiliation will positively lend start-up fund. But even with this case, you need to prepare considerable amount of your own.

Q14: One of my Japanese friends asks me whether or not he can invest in my company. What kind of difference is there between that he invests to the company of my base country and that he makes investment to my subsidiary in Japan ?

A14: When he invests in the Japanese company, his legal right is regulated by the Japanese company law. On the contrary, when an investment is made to your country, the regulation of your country is effective. Also there are differences with respect to taxes for the investor.

Q15: In order to found a company in Japan, what kind of cost is required?

A15: It is explained in the other page "Business Law in JAPAN (Q9)" in this site. Please refer to there.

Q16: What kind of taxes are imposed on a company in Japan?

A16: It is explained in the other page "Tax practice in JAPAN" in this site. Please refer to there.

Q17: We requested the bookkeeping to an accountant's office in Japan, but they do not prepare a budget of cash balance forecast. Is this common in Japan?

A17: Yes. Most accounting offices do not undertake the documents for the future as such. Even if they undertake it, they charge you an additional fee.

Q18: What should I care to make a budget and short-term cash flow forecats ?

A18: First of all, decide what investment your management plan to do in the future. Additionally, separately from the future plan, if there are things of which the payment has already settled or orders which cannot be cancelled, the accounting section have to be reported all of these information. After that, the information will be totaled by Excel sheet or other software.

Q19: In several years, we want to go IPO in the Stock Exchange in Japan. What kind of conditions are necessary?

A19: In Japan, there are some stock exchanges in Tokyo, Osaka, Nagoya, Sapporo and Fukuoka etc., and the initial listing requirements differ in each. Moreover, there are plural markets inside one stock exchange and the standards are also different by every market. There are a numerical standard of the achievement etc. and a substance standard of an internal state of control etc. Please consult the specialist about details.

Q20: Is a company with a foreign manager possible to be listed on stock market in Japan? Are there any restriction in foreigner's holdings ratio?

A20: There is no problem at all even with the foreign manager. Also, as to the holding ratio, there is regulations in some parts of the industry such as aviation, communication and broadcast etc., but the majority of the industries, it is liberalized.