Japan to India: questions Japanese companies ask

Most Japanese groups use a subsidiary so that dividends can use Japan's 95% foreign dividend exemption. A liaison office suits an early representative presence but cannot earn income.

Japanese parents are usually KK or GK companies; the core document is the certificate of registered matters. India is 3.5 hours behind Japan all year.

MOFA apostilles official records; private documents are notarised and certified by the Legal Affairs Bureau first. Certified English translations are needed, and MOFA expects recent official documents.

A chuzaiin posted for a full year usually meets the 182-day test and can act as resident director, which many Japanese groups prefer to a third-party nominee.

Japanese-side costs include notarisation, Legal Affairs Bureau certification, MOFA apostille and translation.

Japanese documents usually take two to four weeks; MOFA appointments and postal returns add time.

Japan's Foreign Exchange and Foreign Trade Act can require a report of the outward investment on the Japanese side.

J-GAAP or IFRS valuations for the parent are separate from the FEMA certificate.

The India–Japan treaty applies 10% to dividends, interest, royalties and technical fees. Technical fees are taxable in India even without a PE, so intra-group services need careful pricing.

Japan exempts 95% of qualifying foreign dividends, so the 10% Indian tax is largely final.

The National Tax Agency examines the same transaction; many Japanese groups share India's 31 March year end, which helps.

Chuzaiin who negotiate or sign contracts in India are the main dependent-agent risk.

CFC checks for holdings of 10% or more, local file thresholds and, for listed groups, J-SOX scope.

Japanese parents often close on 31 March like India, so Indian figures are needed early for the May results.

Japanese work rules are a useful base, but notice, leave and termination follow Indian law.

The India–Japan agreement keeps seconded staff in Japanese pension insurance for up to five years with a certificate of coverage.

Chuzaiin and families need employment and dependant visas; plan housing near Japanese schools in Delhi NCR, Bengaluru or Chennai.

APPI requires consent or equivalent safeguards for transfers to India.

Japanese judgments need a fresh suit in India; JCAA or Singapore arbitration awards are enforceable.

The India–Japan CEPA has been in force since 1 August 2011. Japanese investment is strongest in automotive, electronics and infrastructure.

Japanese groups increasingly use India for IT and engineering support for global operations.

The Japanese parent claims a foreign tax credit for Indian tax on a gain.