The Unibanco Letters - Dual-Hatting Regulations and Global Enforcement
Forms of Organization - Japanese
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• FIBO registrants must be organized as certain types of entities, which may vary based on the type of FIBO
registration being sought.
• There are a number of forms that this presence may take, both as Japanese and non-Japanese entities.
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A KK, is the Japanese equivalent of a standard joint stock company
Advantages:
Disadvantages:
1. Acceptable for all four major FIBO registrations
2. Clear and robust statutory requirements
3. Familiarity to Japanese regulators and counterparties; perception of stability
1. Onerous statutory requirements (i.e. representative directors, statutory auditors, and shareholder meetings)
2. Double-taxation
3. Lack of familiarity for foreign participants
Note: It used to be required that at least one representative director must be a resident in Japan, but this
requirement was eliminated last year.
• A Japanese godo kaisha is the Japanese equivalent of a US LLC, which offers limited liability to its members and
can be described as a hybrid between a corporation and partnership
Advantages:
Disadvantages:
1. Simpler statutory requirements than the KK
2. Can be treated as a tax pass-through ("check the box" entity for US tax purposes)
1. Can only obtain Investment Advisory and Agency (IAA) FIBO and Type 2 FIBO registrations, but not the other two
registrations
2. Less well perceived as having stability or a significant presence
Morgan Lewis
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