Q15: When doing business in Japan and wanting to facilitate borrowing from financial institutions, which is more suitable: a Japanese corporation or a Japanese branch? A: Generally, a Japanese corporation is considered more advantageous.
ringo tax corporation
Japanese Certified Public Accountant ・Tax Accountant Hiroya Aihara
Ringo Tax Corporation
A: Generally, a Japanese corporation is considered more advantageous.
Q: Why is a Japanese corporation considered more advantageous?
In the case of a Japanese corporation, the amount of capital is listed in the registry, clearly indicating the intention to expand business within Japan. This ensures a certain level of creditworthiness when borrowing from financial institutions.
Q: What about in the case of a Japanese branch?
In the case of a Japanese branch, the information of the foreign corporation can be opaque in terms of debt collection and loan screening, leading to a lower evaluation of creditworthiness. Additionally, interactions with the foreign corporation may be required for debt collection, complicating the process.
Q: On what criteria do financial institutions base their lending decisions?
The approval of loans is determined based on a variety of factors. Each financial institution has its own criteria for screening, and international circumstances as well as the relationship with the individual or corporation also play a role. Therefore, while a Japanese branch may be at a disadvantage, the creditworthiness and reputation of the foreign corporation can also alter the evaluation.
