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NAO provides the following outsourced accounting services for foreign-affiliated companies doing business in Japan.
| Advice on tax-related matters concerning the types of business to be done in Japan and transaction types
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For foreign-affiliated companies starting business in Japan, NAO analyzes which types of organization (Japanese company, Japanese branch, resident office, etc.) are most suitable to establish, and recommends the best choice. For start-up organizations, since taxation practice depends on which types of transactions are adopted between a parent company and its related companies, NAO examines tax-related matters from various angles for foreign-affiliated companies doing business in Japan, and recommends the best method. |
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| Bookkeeping and compilation and review of financial statements |
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NAO provides support tailored to the needs of clients, from routine bookkeeping to the preparation and review of financial statements in accordance with the GAAP of each country. For example, NAO reports financial information, on a timely basis, complying with the parent company’s forms to CFO and controllers of the parent company as well as to the persons responsible in Japan. |
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| Submitting tax returns for local companies/branch offices in Japan
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Not only local companies in Japan but also Japanese branch offices of foreign-affiliated companies have the obligation to submit tax returns as far as they do business and make profits in Japan. For these companies/offices, NAO speedily submits appropriate tax returns. |
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NAO undertakes all kinds of outsourced operations related to payroll accounting and social insurance.
To be more precise, NAO provides services responding to a variety of clients’ needs including routine payroll accounting, management of various data based on payroll accounting and of working schedules of employees, compilation of payroll lists and payment records, and year-end adjustments.
NAO takes care of document preparation and notification operations related to various benefits and applications including the acquisition/deprivation of eligibility for employees’ pension insurance, employees’ health insurance, and employment insurance, as well as payroll calculation bases. NAO also prepares labor insurance premium returns.
NAO has full-time staff, including 2 certified social insurance and labor consultants, who are engaged in relevant operations. In response to a client’s request, NAO provides personnel management-related support such as the establishment of labor regulations, etc.
Income tax levied on expats
Concerning income tax, there are some specific matters applicable only to foreign residents working in Japan, including the determination of nonpermanent resident status, various fringe benefits such as company-subsidized housing and home leave, etc.
NAO provides not only income tax return preparation service, but also fine-tuned and appropriate advice on tax upon getting a clear picture of each individual’s situation. |
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| NAO provides support on the following operations mainly for foreign-affiliated companies starting business in Japan, in collaboration with partnered law firms/judicial scriveners’ offices. |
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| Preparation of initial articles of incorporation, etc.
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NAO assists in the preparation of articles of incorporation, etc. |
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| Registration of incorporation
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NAO provides support in relation to incorporation including the registration of incorporation/establishing branches. |
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| All sorts of tax-related notifications required at the time of incorporation
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In addition to the preparation of notifications related to incorporation/establishing branches, NAO assists in the notification, when necessary, related to consumption tax and tax agreement, etc. based on the types of organizations established in Japan. |
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| Preparation of social insurance-related notifications required at the time of incorporation
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NAO deals with social insurance-related procedures including employees’ pension insurance, employees’ health insurance, workmen’s compensation, and employment insurance required at the time of incorporation, as well as various procedures required when employees join/quit companies. |
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| Follow-up after incorporation
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NAO deals with the preparation of board minutes including the approval of account settlement, and minutes of general meetings of shareholders. NAO also deals with procedures concerned with revising registered matters including the reshuffling of officers after business commencement. |
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| Cash management
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NAO takes care of management of bank accounts, and payment of salaries and expenses. In terms of cash management, NAO takes care of Fund Requests as well as submitting reports to head offices. When paying, NAO performs appropriate procedures upon establishing an internal control system by separating operations such as the confirmation of payment approval by clients, preparation of payment documents, and payment of debt. |
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Relating to SPC business, NAO provides various sorts of services throughout the entire flow of events, from assistance in incorporation to management/operation.
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Support at incorporation ………………… |
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Registration of incorporation
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Preparation of tax-related notifications
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Preparation of position documents |
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Preparation of accounting data, etc.…･ |
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Preparation of monthly trial balance sheets and reports
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Management of fixed asset ledger |
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Cash management ………………………･ |
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Operation of various types of money transfers
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Taking care of tax payment/payment of expenses |
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| ４．Closing of books …………………………･ |
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Calculation of distribution amount
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Preparation of final statements
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Preparation of tax returns
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Preparation of business reports/annexed specifications
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Dealing with audits |
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| ５．Preparation of depreciable property tax returns/designated papers ……・…………･ |
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Preparation of depreciable property tax returns
■Preparation of tables showing totals of payment records
and designated papers |
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NAO undertakes audits and Due Diligence when foreign-affiliated companies implement voluntary audits in Japan for the purpose of M&A or at the request of parent companies.
Due Diligence (DD) is categorized into four types, namely Business DD, Finance DD, Tax DD, and Legal DD, out of which NAO is prepared to undertake Finance DD and Tax DD.
To be more precise, NAO undertakes the verification of legitimacy of various accounting processes and the existence of assets, liability, and net assets accounts; examination of profit planning; examination of business value by means of market approach, income approach, etc.; examination of past tax returns and tax bargaining; and reports on foreseeable tax risks, etc.
NAO is ready to prepare reports in English when required by clients.
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With the advancement of globalization in recent years, in addition to traditional direct investment by means of incorporation, foreign-affiliated companies are engaged in corporate realignment using a variety of means including stock acquisition of existing companies, the acquisition of existing companies’ businesses through corporate realignment, which includes the transfer of operations, mergers and the splitting of companies, and the realignment of existing organizations using Debt Equity Swap, etc.
Furthermore, so-called forward triangular mergers by foreign-affiliated companies, legalized in May 2007, are expected to be widely used with the future development of related laws and regulations.
NAO is prepared to provide consulting services from the tax/accounting standpoint in regard to the above matter of corporate realignment and M&A. |
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In recent years, both domestic and foreign tax authorities are reinforcing their surveillance over cross-border transfer pricing transactions of multinational corporations by “transfer pricing legislation”.
Foreign-affiliated companies operating in Japan will bear substantial taxation risks in such cases where Japanese subsidiaries do not receive adequate consideration for services rendered in inter-company transactions and where headquarter expenses such as management fees are not properly charged to subsidiaries.
NAO will analyze and provide advice on these taxation risks encountered by foreign-affiliated companies that arise from rendering of services and transaction of intangible property such as software license fees.
Specifically, we will evaluate taxation risk based on client interviews and analysis of internal information regarding related-party transactions and offer appropriate and well-defined solutions on transfer pricing risk management.
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