In general, if a foreign company establishes a subsidiary company in Japan as a base for its business in Japan, it must establish a joint-stock corporation (Kabushiki-Kaisha (KK)) or limited liability company (Godo-Kaisha (LLC) or GK)).

KK or GK must be incorporated after certain required procedures in accordance with Japanese law.

A subsidiary is a separate corporation from the foreign company, so the foreign company will bear the liability of an equity participant stipulated by law for all debts and credits generated by the activities of the subsidiary. Other methods by which a foreign company may invest in Japan using a Japanese corporation but without establishing a subsidiary include establishing a joint venture with a Japanese enterprise or investment company, and through equity participation in a Japanese enterprise.