A specific purpose company, or a specific purpose vehicle, is set up to accomplish a certain goal, such as securitization or risk mitigation. To open a SPV company in Japan, founders follow the general registration requirements. Our team that can help you open a company in Japan can also assist with the setup of an SPV.
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What is an SPV?
A special purpose vehicle is a company set up for a distinct purpose. Investors who open a SPV company in Japan may choose to do so for purposes of asset management, isolating financial risk, purchasing real estate, or pursuing different investment strategies.
The process for company incorporation in Japan in the case of an SPV is detailed below by our team. We can also help you if you need to open a company in another country, such as Korea, where the time frame for incorporation is 2-4 weeks, compared to 2-4 weeks in Japan.
How is an SPV used?
Those who open an SPV company in Japan may choose to do so for different purposes. As previously stated, this corporation is formed for a specific purpose, as its name suggests. This also means that the company can have a limited duration, in which case this is specified in its Articles of Incorporation.
Some common uses for a special purpose vehicle include:
- Risk sharing: the vehicle is used to isolate certain risks associated with a project in which the founding company is involved;
- Securitization: separating loans from other obligations;
- Asset transfers: the special purpose vehicle can be created to own and transfer certain types of assets;
- Property ownership: the special purpose company can be set up specifically for investments in Japanese real estate.
If you would like to know more about special requirements or tax considerations when setting up a special purpose vehicle in Japan, our team can answer your questions.
How is an SPV structured?
A key feature of the special purpose vehicle is that it is separate from its founding parent company. This allows the foreign entity to use the SPV in Japan for risk management or risk segregation, among other purposes.
To open a SPV company in Japan is to register a local company, such as the Japanese equivalent of a public or a private limited company.
What are the steps for SPV incorporation in Japan?
The main steps for company formation in Japan are the following:
- Choose a suitable business form: this can be the joint-stock company or the limited liability company;
- Meet the minimum incorporation requirements: the minimum capital for the aforementioned types of companies in Japan is 1 yen or more. Additionally, a minimum number of company directors is required according to the chosen business form;
- Choose the business name: the name of the company must be unique. Prior verification is possible with the Legal Affairs Bureau;
- Draw up the incorporation documents: these are the company’s Articles of Incorporation. Our team can help you draft and have them notarized accordingly;
- Register the business: the company is registered with the Japanese Legal Affairs Bureau. Once this is done, a bank account can be opened for the company.
Generally, a corporation set up in Japan will be taxed as follows:
- 23.2% standard, national corporate income tax applicable to companies with share capital over JPY 100 million;
- 15% reduced corporate income tax for companies with a lower share capital (applicable on the first JPY 8 million);
- The reduced corporate income tax rate does not apply if all the company’s shares are owned by another legal entity with a share capital of JPY 500 or more.
In addition to matters related strictly to company incorporations, our immigration lawyers in Japan can answer questions about the requirements for foreign investors to apply for and obtain the proper visa that allows them to come to the country for business purposes.
Setting up a special purpose vehicle in Japan can help investors with particular asset management purposes or other strategies they agree upon for their business.
Our team can help you open a SPV company in Japan. Contact our local incorporation experts in the country for more details.