A Practical Guide to Tax Advisers, Accountants and Fund Administration Providers for Foreign Real Estate Investors
Introduction
Tax and accounting are fundamental parts of commercial real estate investment in Japan.
A foreign investor may initially focus on:
- Finding a property
- Negotiating the purchase price
- Arranging financing
- Conducting legal due diligence
- Reviewing the Engineering Report
- Obtaining an appraisal
But the investment also needs an appropriate accounting and tax framework.
Questions can include:
- What investment structure should be used?
- Should the investor acquire directly or through an SPC?
- How should a GK-TK structure be accounted for?
- Would a TMK structure be appropriate?
- How does Japanese consumption tax apply?
- What withholding taxes may apply?
- How should rental income be reported?
- What taxes arise on acquisition?
- How should distributions to investors be treated?
- What happens when the property is sold?
- Who will prepare the SPC’s accounts and tax returns?
For institutional investors, these questions can continue throughout the entire investment period.
Japan therefore has a professional ecosystem consisting of:
- Tax advisers
- Accounting firms
- Audit firms
- SPC administrators
- Fund administrators
- Corporate service providers
This guide introduces selected firms active in Japanese real estate tax, accounting and SPC administration.
It is not a ranking.
The appropriate adviser depends on the investor, transaction, investment structure, asset class and reporting requirements.
Why Tax Structuring Matters
Consider a foreign investor acquiring Japanese commercial real estate.
A simplified structure might be:
Foreign Investor
↓
Investment Vehicle
↓
Japanese SPC
↓
Real Estate / Trust Beneficiary Interest
But several questions immediately arise.
How will income move from the property to the investor?
How will debt be introduced?
How will distributions be made?
What taxes apply at each stage?
How will the structure be unwound when the property is sold?
This is why tax advice should generally be considered before acquisition, not after the structure has already been established.
For an introduction to common investment vehicles, see Understanding Japanese Real Estate Investment Structures: GK-TK, TMK and Trust Beneficiary Interests.
Tax Adviser vs. Accountant vs. SPC Administrator
These roles can overlap, but they are not identical.
Tax Adviser
Typically advises on:
- Investment structuring
- Japanese taxation
- Cross-border taxation
- Consumption tax
- Withholding tax
- Tax treaties
- Tax compliance
- Exit planning
Accountant
May handle:
- Bookkeeping
- Financial statements
- Accounting policies
- Investor reporting
- Financial reporting
SPC / Fund Administrator
May handle ongoing practical operation of the investment vehicle, including:
- SPC establishment support
- Accounting
- Payments
- Cash management
- Reporting
- Tax coordination
- Corporate administration
- Distributions
- Closing and liquidation support
For institutional real estate investment, these functions are often closely connected.
Major Global Tax and Accounting Firms
Japan’s major global professional-services firms have substantial tax practices and experience with international investors.
PwC Japan
Type: Global professional services network
PwC Japan provides tax services for the real estate sector, including support for both domestic and overseas investors.
Its real estate-related tax work can include:
- Investment structuring
- Tax due diligence
- Acquisition-related tax advice
- Cross-border investment
- Fund structuring
- Tax compliance
- Exit planning
For foreign investors, the ability to coordinate Japanese tax advice with advisers in other jurisdictions can be particularly useful.
This can matter where the investment structure involves:
Overseas Fund
↓
Intermediate Holding Vehicle
↓
Japanese Investment Vehicle
↓
Japanese Real Estate
The tax consequences cannot always be considered solely from the Japanese side.
Relevant For:
- Foreign institutional investors
- Cross-border investment
- Real estate funds
- Tax structuring
- Tax due diligence
- International tax coordination
Official Website: PwC Japan
Deloitte Tohmatsu
Type: Global professional services network
Deloitte Tohmatsu provides tax, accounting, audit and advisory services in Japan.
Its broader real estate capabilities can support investors across areas including:
- Transaction tax
- International tax
- Fund structures
- Corporate taxation
- Tax compliance
- Financial reporting
- Transaction advisory
The firm’s global network can be relevant to international real estate investors requiring coordination between Japanese and overseas tax teams.
Relevant For:
- Institutional investors
- Cross-border investment
- Tax structuring
- Transactions
- Corporate taxation
- International tax
Official Website: Deloitte Tohmatsu
EY Japan
Type: Global professional services network
EY Japan provides dedicated real estate tax services.
Its services include support for real estate investment structures as well as ongoing accounting and tax requirements.
Relevant vehicles can include:
- J-REITs
- TMKs
- SPCs
- Other real estate investment structures
EY’s services can extend from structuring through accounting, reporting and tax compliance.
This can be particularly useful where the investor wants one professional-services group capable of supporting multiple stages of the investment.
Relevant For:
- Real estate funds
- J-REITs
- TMKs
- SPCs
- Tax compliance
- Accounting
- Foreign investors
Official Website: EY Japan
KPMG Japan
Type: Global professional services network
KPMG Japan provides tax and advisory services to Japanese and international real estate investors and financial market participants.
Potential areas of relevance include:
- Real estate investment structuring
- International tax
- Transaction tax
- Tax due diligence
- Corporate tax
- Financial services
- Fund-related advisory
Its global network can be useful where Japanese real estate forms part of a broader international investment structure.
Relevant For:
- Institutional investors
- Real estate funds
- Cross-border structures
- International tax
- Transaction tax
- Financial services
Official Website: KPMG Japan
Other International Accounting and Tax Firms
Foreign investors are not limited to the largest global professional-services networks.
Several other international accounting organizations have substantial Japanese operations.
Grant Thornton Japan
Type: International accounting and tax network
Grant Thornton Japan has a dedicated real estate service offering for investors.
Its real estate team advises both domestic and cross-border investors.
The firm specifically identifies growing investment into Japanese property by:
- Resident investors
- Non-resident investors
- J-REITs
- Private real estate funds
Its services can include:
- Cross-border advisory
- Transaction support
- Tax support
- Investment structuring
- Tax compliance
- Ongoing accounting support
Grant Thornton also publishes guidance specifically addressing non-resident investment in Japanese real estate.
This makes the firm particularly relevant for foreign investors requiring practical advice on both entering the investment and operating the investment after acquisition.
Relevant For:
- Foreign investors
- Non-resident investors
- Cross-border real estate
- Tax structuring
- Tax compliance
- Private investors
- Institutional investors
Official Website: Grant Thornton Japan
BDO Japan
Type: International accounting and advisory network
BDO operates in Japan as part of its global accounting and advisory network.
Its services include areas such as:
- Tax
- Accounting
- Audit
- Advisory
- International business support
For foreign investors, firms such as BDO can provide an alternative to the largest global professional-services organizations, particularly where international coordination remains important.
Relevant For:
- International investors
- Corporate tax
- Accounting
- Cross-border business
- Compliance
Official Website: BDO Japan
Specialist SPC, Fund Accounting and Administration Providers
For institutional Japanese real estate investment, another group of firms is particularly important.
These firms specialize in the practical operation of:
- GK-TK structures
- TMKs
- Real estate securitization vehicles
- Investment funds
- Other SPCs
This is different from simply receiving tax advice at acquisition.
The SPC may need ongoing support every month, quarter and year throughout the investment period.
Tokyo Kyodo Accounting Office
Type: Specialist accounting, tax and fund administration firm
Tokyo Kyodo Accounting Office is a major Japanese specialist in structured finance, securitization and fund administration.
Established in 1993, the firm has built extensive experience in:
- Structured finance
- Project finance
- Fund management
- Domestic taxation
- International taxation
- Real estate
- Renewable energy
- Corporate finance
Its fund-management practice supports investment vehicles throughout their lifecycle.
Services can include:
SPC establishment ↓ ongoing administration ↓ accounting and taxation ↓ fund operation ↓ closing
Tokyo Kyodo states that its group has provided administration services for more than 8,000 companies in Japan and overseas.
These include:
- Real estate securitization SPCs
- Renewable-energy SPCs
- Buyout funds
- Other investment vehicles
The firm also provides accounting and tax services for J-REITs.
This makes Tokyo Kyodo particularly relevant to institutional investors using Japanese investment vehicles.
Relevant For:
- GK-TK and SPC structures
- Real estate securitization
- Fund administration
- J-REIT accounting and taxation
- Institutional investors
- Foreign investors
- Structured finance
Official Website: Tokyo Kyodo Accounting Office
Sakura Kyodo Financial Advisory
Type: Specialist SPC and fund administration provider
Sakura Kyodo Financial Advisory provides accounting, tax and administrative support for Japanese investment structures.
The firm specifically supports structures including:
- GK-TK
- TMK
- LPS
Its accounting and tax services cover areas such as:
- Accounting policy design
- Bookkeeping
- Japanese GAAP
- IFRS support
- Consumption tax
- Corporate and local tax
- Tax filing
- Tax consultation
A particularly important feature of SPC administration is that accounting cannot be considered independently from:
- Investment structure
- Investor reporting
- Distributions
- Tax treatment
Sakura Kyodo therefore emphasizes an integrated approach to accounting and tax throughout SPC operations.
Relevant For:
- GK-TK
- TMK
- LPS
- SPC accounting
- Tax compliance
- Fund administration
- Institutional investment structures
Official Website: Sakura Kyodo Financial Advisory
Why SPC Administration Matters
A foreign investor may establish a Japanese SPC to acquire a property.
But establishing the entity is only the beginning.
During ownership, the SPC may need to:
- Receive rental income
- Pay property expenses
- Pay interest
- Maintain bank accounts
- Prepare accounting records
- Prepare financial statements
- File tax returns
- Pay taxes
- Make distributions
- Report to investors
- Maintain corporate records
A simplified structure may therefore look like:
Foreign Investor ↓ Asset Manager ↓ Japanese SPC ↙ ↓ ↘ Property — Lender — SPC Administrator
The administrator becomes part of the infrastructure supporting the investment.
GK-TK Accounting and Tax
GK-TK is commonly encountered in Japanese institutional real estate investment.
A simplified structure is:
Investor ↓ TK Investment ↓ GK ↓ Real Estate / Trust Beneficiary Interest
The structure requires careful coordination among:
- Lawyer
- Tax adviser
- Accountant
- Asset manager
- SPC administrator
- Lender
Tax and accounting treatment should therefore be considered during structuring rather than after acquisition.
For a broader explanation, see Understanding Japanese Real Estate Investment Structures: GK-TK, TMK and Trust Beneficiary Interests.
TMK Accounting and Tax
A TMK is another vehicle used in Japanese real estate securitization.
Its operation involves specific:
- Legal requirements
- Accounting requirements
- Tax requirements
- Distribution requirements
Specialist advisers familiar with securitization structures can therefore be particularly important.
Tax on Acquisition
Acquiring Japanese real estate can trigger several taxes and transaction costs.
Depending on the transaction, these may include:
- Real estate acquisition tax
- Registration and license tax
- Consumption tax
- Stamp duty
The precise treatment depends on factors including:
- Asset
- Transaction structure
- Buyer
- Seller
- Direct real estate vs. trust beneficiary interest
Foreign investors should therefore obtain transaction-specific advice.
For an overview of transaction costs, see Understanding the Costs of Buying Commercial Real Estate in Japan: A Guide for Foreign Investors.
Consumption Tax
Consumption tax can be particularly important in Japanese real estate.
The treatment of land and buildings is different.
The treatment of rental income can also differ depending on whether the property is residential or commercial.
SPC operations may therefore require careful tracking of:
- Taxable transactions
- Non-taxable transactions
- Input tax credits
- Filing obligations
Consumption tax should be considered before acquisition because the investment structure and property use can affect the outcome.
Withholding Tax for Foreign Investors
Foreign investors may also encounter Japanese withholding tax.
Potential areas include:
- Rental payments
- Interest
- Distributions
- Sale proceeds
The applicable treatment depends on:
- Investor type
- Residence
- Investment vehicle
- Payment type
- Tax treaty
- Other circumstances
A foreign investor should therefore avoid assuming that cash can simply be transferred from the Japanese investment to the overseas investor without tax consequences.
Tax Treaties
Japan has tax treaties with numerous jurisdictions.
Treaties may affect taxation of certain cross-border payments.
However, tax treaty availability does not automatically mean treaty benefits apply.
Factors can include:
- Investor residence
- Beneficial ownership
- Investment structure
- Type of income
- Treaty provisions
- Japanese anti-avoidance rules
Cross-border structuring should therefore involve advisers familiar with both Japanese taxation and the investor’s home jurisdiction.
Tax During the Holding Period
Owning Japanese property creates ongoing tax obligations.
Depending on the structure and asset, these can include:
- Corporate income tax
- Local corporate taxes
- Fixed asset tax
- City planning tax
- Consumption tax
- Withholding tax
- Other taxes
The investment model should therefore consider:
Gross Property Income minus Operating Expenses minus Financing Costs minus Taxes = Investor Cash Flow
Tax affects actual investment returns.
Tax on Exit
The exit should ideally be considered when the investment is first structured.
Potential exits may include:
- Direct property sale
- Trust beneficiary interest sale
- Sale of investment interests
- Refinancing
- Portfolio sale
Each may have different tax, legal and commercial consequences.
For more on disposal strategies, see Exit Strategies for Commercial Real Estate Investments in Japan: A Guide for Foreign Investors.
Tax Due Diligence
Tax advisers can also become involved in due diligence.
Relevant issues may include:
- Existing tax liabilities
- Historical filings
- Consumption tax
- Property-related taxes
- Transaction structure
- Tax attributes
Tax DD can be particularly important where the transaction involves acquisition of an entity rather than only the underlying property.
Accounting Standards
Foreign institutional investors may also need to coordinate different accounting frameworks.
Examples include:
- Japanese GAAP
- IFRS
- Overseas parent-company accounting standards
- Fund reporting standards
The Japanese SPC’s accounting may therefore need to feed into a broader international reporting framework.
This is another reason international investors often select advisers capable of communicating with both Japanese operating teams and overseas finance teams.
Tax Adviser vs. Real Estate Lawyer
The lawyer and tax adviser perform different but closely connected roles.
A simplified distinction is:
| Adviser | Primary Role |
|---|---|
| Lawyer | Legal structure and documentation |
| Tax Adviser | Tax consequences and tax efficiency |
| Accountant | Accounting and financial reporting |
| SPC Administrator | Ongoing vehicle operation |
In practice, all four may need to work together.
For major legal advisers, see Major Real Estate Law Firms in Japan.
Tax Adviser and Asset Manager
The asset manager is another important participant.
The AM may coordinate:
- Acquisition
- Financing
- Business plan
- Property operations
- Reporting
- Exit
The tax adviser then helps ensure that the investment structure and transactions are treated appropriately from a tax perspective.
For foreign investors unfamiliar with the Japanese market, an experienced AM may also be able to introduce tax firms, accountants and SPC administrators that regularly work with international investors.
For more, see How to Choose a Commercial Real Estate Asset Manager in Japan.
How Foreign Investors Can Find a Tax or Accounting Adviser in Japan
Several routes are available.
Ask the Asset Manager
An experienced Japanese asset manager will usually work regularly with tax advisers, accountants and SPC administrators.
This can be particularly useful because the AM knows the proposed investment structure, asset and investor requirements.
Ask the Lawyer
Real estate lawyers regularly coordinate with tax advisers when establishing:
- GK-TK structures
- TMKs
- Joint ventures
- Funds
- Other investment vehicles
The law firm may therefore know tax teams experienced with similar transactions.
Ask the Lender
Banks involved in structured real estate financing regularly encounter:
- SPCs
- GK-TK
- TMKs
- Securitization structures
They may know accounting and administration providers commonly used in the market.
For more on lenders, see Major Real Estate Lenders and Banks in Japan.
Ask Other Foreign Investors
Investors that already operate Japanese real estate portfolios can provide practical insight into:
- English capability
- Reporting quality
- Responsiveness
- Fund administration
- Cross-border coordination
How to Choose a Real Estate Tax Adviser
There is no universally best adviser.
Relevant considerations include:
Real Estate Experience
Does the adviser regularly work with commercial real estate transactions?
Investment Structure Experience
Does the team understand:
- GK-TK
- TMK
- Trust beneficiary interests
- J-REITs
- Private funds
Cross-Border Capability
Can the firm coordinate with the investor’s overseas tax advisers?
SPC Accounting Capability
Will the firm only provide structuring advice, or can it also handle:
- Accounting
- Tax filing
- Ongoing administration
English Capability
Can the team explain Japanese tax issues clearly to:
- Investment committee
- Overseas finance team
- Fund manager
- International auditors
Scale
A single-property private investment may require a different service model from a multi-billion-yen institutional fund.
Questions to Ask a Tax or Accounting Firm
Before appointing an adviser, investors may ask:
- Do you regularly advise foreign real estate investors?
- Do you have experience with GK-TK structures?
- Do you have experience with TMKs?
- Do you advise on trust beneficiary interest transactions?
- Can you advise on acquisition taxes?
- Can you advise on consumption tax?
- Can you advise on withholding tax?
- Can you analyze applicable tax treaties?
- Can you model tax cash flows?
- Can you advise on exit taxation?
- Can you provide ongoing accounting?
- Can you prepare Japanese tax returns?
- Can you administer the SPC?
- Can you provide investor reporting?
- Can you support IFRS reporting?
- Can you coordinate with overseas tax advisers?
- Can you work in English?
- Who will handle the day-to-day work?
- How are fees calculated?
Frequently Asked Questions
Who are the major real estate tax advisers in Japan?
Major global professional-services organizations active in Japan include PwC, Deloitte, EY and KPMG.
Other international firms such as Grant Thornton and BDO also provide tax and accounting services.
Specialist providers including Tokyo Kyodo Accounting Office and Sakura Kyodo Financial Advisory provide accounting, tax and administration services for Japanese investment vehicles.
This is not an exhaustive list.
Do foreign investors need a Japanese tax adviser to buy real estate?
Professional Japanese tax advice is generally advisable where the investment involves significant commercial real estate, an SPC, financing or cross-border investment.
Tax consequences can affect the investment from acquisition through exit.
What is an SPC administrator?
An SPC administrator supports the ongoing operation of a special purpose company or other investment vehicle.
Services may include accounting, payments, reporting, tax coordination and corporate administration.
Who handles accounting for a GK-TK structure?
Specialist accounting firms and SPC administrators familiar with real estate securitization commonly provide these services.
Can Big Four firms advise on Japanese real estate?
Yes. Major global professional-services firms have Japanese tax practices that advise real estate investors, funds and other market participants.
Do investors have to use a Big Four firm?
No. Japan also has specialist accounting, tax and administration providers with substantial experience in real estate funds and SPCs.
For some investment structures, specialist vehicle-administration experience can be particularly valuable.
When should tax structuring begin?
Ideally before the acquisition structure is finalized.
Changing an investment structure after closing can be considerably more difficult than designing it appropriately before acquisition.
Can an asset manager recommend a tax adviser?
Potentially. Asset managers regularly coordinate with tax, accounting and SPC administration providers and may know firms experienced with the relevant investment structure.
Can a lawyer provide tax advice?
Some law firms have lawyers with substantial tax expertise.
However, complex real estate investments commonly involve separate tax and accounting professionals working alongside legal counsel.
Conclusion
Tax and accounting are part of the infrastructure supporting institutional real estate investment in Japan.
Foreign investors may work with global professional-services organizations such as PwC, Deloitte, EY, KPMG, Grant Thornton and BDO.
They may also work with specialist Japanese providers such as Tokyo Kyodo Accounting Office and Sakura Kyodo Financial Advisory, particularly where the investment involves GK-TK, TMK, SPCs, fund administration or real estate securitization.
The appropriate adviser depends on investment structure, investor jurisdiction, asset, financing, reporting requirements and exit strategy.
Foreign investors should therefore think about tax and accounting before acquiring the property.
A well-organized investment team may include:
Investor ↓ Asset Manager ↓ Lawyer + Tax Adviser + Accountant + SPC Administrator ↓ Japanese Investment Vehicle ↓ Real Estate
These professionals perform different roles, but they need to work together.
In Japanese institutional real estate, successful investment execution depends not only on finding the right property.
It also requires building the professional and operational infrastructure that allows the investment to function efficiently throughout its entire lifecycle.
References
- PwC Japan
- Deloitte Tohmatsu
- EY Japan
- KPMG Japan
- Grant Thornton Japan — Real Estate Services
- Grant Thornton Japan — Investing in Japan Real Estate from Overseas
- BDO Japan
- Tokyo Kyodo Accounting Office
- Tokyo Kyodo Accounting Office — Fund Management
- Sakura Kyodo Financial Advisory — Accounting & Tax Services
Related Articles
- Understanding Japanese Real Estate Investment Structures: GK-TK, TMK and Trust Beneficiary Interests
- Commercial Real Estate Acquisition Costs in Japan
- Exit Strategies for Commercial Real Estate Investments in Japan: A Guide for Foreign Investors
- Major Real Estate Law Firms in Japan
- Major Real Estate Lenders and Banks in Japan
- Major Real Estate Investment and Asset Management Firms in Japan
- How to Choose a Commercial Real Estate Asset Manager in Japan
- Major Real Estate Appraisal Firms in Japan
- Major Real Estate Engineering and Technical Due Diligence Firms in Japan