Insights & Guides
Practical knowledge on Japan market entry — from company setup and visas to trade logistics and branding.
Does a Japan Contract Need a Withholding Tax Gross-Up Clause?
Yes, in most cross-border Japan contracts where a Japan-based party pays fees, royalties, or interest to a non-resident counterparty. The payor must withhold Japan income tax at source before the...
What Is Japan's Effective Corporate Tax Rate for a Foreign-Owned SME in 2026?
A foreign-owned small or medium enterprise (SME) in Japan pays a combined effective corporate tax rate of roughly 30 to 35 percent on taxable income once national corporate tax, local enterprise...
Does Your Japan Distribution Contract Need a No Agency / No Partnership Clause? (2026)
Yes. A Japan distribution or sales-representative contract without a no agency / no partnership clause leaves open the risk that a court or counterparty reads the local rep as holding authority to...
How Much Can a Japan KK Deduct for Client Meals in 2026?
A Japan subsidiary with paid-in capital of JPY 100,000,000 or below can deduct the greater of a flat JPY 8,000,000 annual allowance or 50% of eligible entertainment meal spend. A larger company...
Bilateral vs Unilateral APA in Japan: Which Fits Your Transfer Pricing Risk? (2026)
A bilateral Advance Pricing Arrangement (APA) with Japan's National Tax Agency (国税庁, NTA) and the counterparty tax authority fits foreign-owned subsidiaries with material related-party flows and...
Arbitration vs. Tokyo District Court: Which Fits Your Japan Contract? (2026)
Use the Tokyo District Court (東京地方裁判所) as exclusive jurisdiction when both parties operate in Japan and any judgment will only ever need to be enforced there. Use arbitration, typically at the...
Does a Japan Contract Need a Force Majeure Clause? (2026)
Yes. The Civil Code (民法) already excuses a debtor from damages when non-performance results from a cause not attributable to them (Article 415, paragraph 1 proviso), but Japanese courts construe...
Japan Sales Agent PE Risk in 2026: Does a Local Rep Create a Taxable Presence?
Appointing a Japan sales agent or distributor does not automatically create a Permanent Establishment (PE). The determining factor is whether the agent habitually concludes contracts in your...
How High Can a Liability Cap or Damages Clause Go in a Japan Contract? (2026)
A liability cap or a pre-agreed liquidated damages figure is generally enforceable in a Japan-governed contract, but a Japanese court can void the clause entirely, not just reduce it, if the...
When Must You Remove Business Equipment From Japan to Avoid Fixed Asset Tax? (2026)
Japan's Fixed Asset Tax (固定資産税) assesses whoever owns qualifying business equipment on January 1, with no proration for how many days that year the asset was actually in the country. Removing or...