The primary benefit of establishing

The primary benefit of establishing a subsidiary (Kabushiki Kaisha or “KK” corporate subsidiary) vs. a branch office is the appearance of stability and commitment that it gives prospective employees, customers, and distributors. As negatives, it costs $4,000 or more to set up, requires 4-6 weeks of shuffling paperwork, there are more rules to follow, and separate revenue/expense line items cannot be consolidated to the parent’s books.
The newer Godo Kaisha (GK) entity, similar to a Limited Liability Corporation (LLC) in the USA, was established in 2006, Compared to a KK, it provides the same liability protections, but is cheaper to register and there are fewer restrictions. However, stock cannot be traded in the open market, making it unsuitable for raising large amounts of capital. And because the GK is unfamiliar to most Japanese, most companies choose the KK structure to set up a subsidiary, despite the extra costs involved.