Representative Office In Japan (Liaison Office)

There are questions on social insurance and labor insurance when a representative office in Japan is opened to establish an affiliated company. In addition to that, there are questions on social insurance and labor insurance for a representative if Japanese is appointed as a representative of the office in Japan. Followings are answers to those questions.

Social Insurance
1.Social insurance is applicable if the office is incorporated or registered.
2. A representative of registered office like K.K., Y.K. or branch is allowed to join social insurance.
3. Employees of unincorporated companies like representative office who have over five employees have to join social insurance compulsory.
4. Employees of unincorporated companies like representative office who have fewer than five employees are allowed to join the insurance at their discretions.
5. A representative of unincorporated companies or unregistered companies like representative office is allowed to join the insurance on a case-by-case basis. He has a possibility to be able to join the insurance at his discretion, provided that he is certified to be employed in an organization chart and paid his salary from representative office of Japan. If his salary is paid by direct remittance from the parent company, application to the insurance has a possibility to be denied.
6. Required documents to join at discretions.
Agreements of employees, certificate of residence, taxation certificate, enrollment certificate to tax agency, lease agreement, bank account number of representative etc.

Labor Insurance
1. Enrollment
Labor insurance including workers' accident insurance and employment insurance is applicable for all employees regardless of the forms of the office, such as corporations, individuals and representative offices etc.
Once the company employs workers, the company has to apply labor insurance.
2.A representative of representative offices
He is not allowed to join labor insurance basically. A representative is construed as a sole proprietor. For enrollment of board of members and a representative to labor insurance exceptionally, they are required to be judged their current status on a case-by-case basis. They are required to be involved in similar working conditions to their employees and have possibility to face occupational accident.
Construing them as employee will depend on whether employment contract and operating agreement are made, whether they are a board of members and what kinds of communication has been made with the headquarter. If those who manage the representative office in substance have a lot of discretionary power on behalf of the nominal representative in the head office outside Japan, they have only small possibility to be judged as employee and they will not be construed as being managed.
( Jan 1, 2004 )

Insurance Enrollment (PDF)

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The contents of Core Issues should not be construed as legal advice. Individual problems for information should be referred to legal counsel .