SEISEI SERVICES — CORPORATE STRUCTURE
Corporate Structuring
One entity or two; a holding company in between or not. That choice is not settled by comparing tax rates. It follows from three things: the stage the business is at, how capital is expected to move, and to whom it will eventually pass. Only once those are fixed does the shape of the vehicle follow.
This is for you if
- Your sole proprietorship has grown and you need to decide whether — and when — to incorporate
- The operating company is accumulating profit, and you are uneasy about the share value climbing unchecked
- Real estate and the operating business sit inside the same entity, with no separation of risk
- Entities have accumulated one at a time, and the capital relationships between them were never rationalised
- You want to rearrange the shareholding now, with succession or outside investment in view
When this is not the right service
If all you need is the incorporation filing itself, a judicial scrivener or administrative scrivener will do it faster. Our work sits before that: deciding what the structure should be. We also do not assist in forming entities without genuine business substance for the sake of residence status or tax appearance.
What the design addresses
The line between the individual and the entity
Which income and which assets belong inside the company and which remain personal; how remuneration and retained profit are balanced.
Separating earning from holding
Whether to split the operating company from an asset-holding company, and whether to place a holding company above them — what such a split insulates, and what it adds.
Voting rights and capital structure
Class shares, personal provisions, shareholding ratios — and whether this is a situation where economic interest should be separated from control.
Routes of funds within the group
Dividends, management fees, rent, intercompany loans: each route carries different tax treatment and different substance requirements.
Reorganisation steps, and their order
The available mechanisms — reorganisation, share transfer, contribution in kind — and the points where the order of execution changes the outcome.
Designing for the exit
Family succession, sale to a third party, or listing: which one is anticipated changes the structure that should be chosen today.
Who does what
Design and execution are separate layers. Statutory work is performed by licensed professionals.
| Who | What they do | When it matters |
|---|---|---|
| SEISEI | Structural design, comparison of options, sequencing, coordination of the professionals | Before any registration or filing begins |
| Partner tax accountant | Tax representation, return preparation, tax computation | Execution once the design is fixed, and each subsequent year |
| Judicial scrivener | Incorporation, reorganisation and property registrations | At execution |
| Lawyer | Contracts, articles of incorporation, shareholder-level legal procedures | Where the issue carries a legal dispute |
We neither register nor file. What we do is design the whole so that those acts do not contradict one another, fix their order, and remain accountable for the coherence of the result.
How we work
1. Diagnosis
The present corporate and personal structure, and the routes funds travel, are mapped and the issues identified.
2. Architecture
Several structural options are compared on tax, legal and administrative burden, each with the provisions they rest on.
3. Implementation
Executed with judicial scriveners and tax accountants. We manage the sequence and the coherence.
4. Stewardship
The structure is revisited as the size of the business, the law and the capital plan change.
Frequently asked questions
Does incorporating always reduce the tax burden?
Not always. Individuals and corporations are taxed under structurally different regimes, and the answer depends on income level, social insurance contributions and the eventual transfer of assets. There are real situations in which incorporating leaves you worse off.
What is the point of a holding company?
To separate the function of earning from the function of holding. The expected effects include insulating business risk, restraining the growth of share value, and preparing a vehicle for succession — but administrative cost and substance requirements rise at the same time. Build the vehicle without settling the purpose and only the burden remains.
Can entities that already exist be rationalised now?
Yes. But reorganisations have an order, and the wrong order can manufacture a taxable event that nobody needed. That is why the work begins with understanding what currently exists.
What does it cost?
It varies with the number of entities and the scope of the reorganisation, so we do not publish a fixed schedule. We quote once the scope of the diagnostic is defined. Registration costs and tax accountant fees are paid directly to those professionals.
Related insights
- Same Income, Different Tax Burden: Sole Proprietorships and Corporations
- The Holding Company as Structure
- Timing the Transfer in a Real Estate Incorporation
- The Family Company and Income Splitting
- The Shell-Company Trap
Get in touch
Tell us about the entities as they stand today and what is expected to happen next. Write to ceo@seisei.tokyo.
SEISEI provides financial and management consulting. It does not constitute tax representation, preparation of tax documents, or tax consultation as defined in Article 2 of Japan’s Certified Tax Accountant Act. Filings and tax computations are handled by partner licensed tax accountants (zeirishi).