Learn to Start Doing Business in Japan

Begin to Level Up by Doing Business in Japan

The unique culture of Japan is because of the internal and external trends and forces in the country. If you understand how these have shaped their society, you will deal better with the Japanese people, community, and business in general.

The Japanese are very effective at adapting when it comes to religions and schools of thought that come from other countries. Hence, if you are a foreign investor who wants to start to set up a business in Japan, you must understand their cultural practices, mainly when they apply it to the context of business.

You will find out more about doing business in Japan here.

The Japanese Culture

Their Consumer Culture is Strong

Japanese consumers quickly adapt to high-end electronics and even luxury goods. The consumer market of Japan is strong, making it an ideal location for new product market testing; and give established brands a healthy market.

Unemployment in Japan is low at only 3.5%, and the consumers have a high level of disposable income.

Age and Status

In Japan, they have very high respect for age and status, with the hierarchy affecting different aspects of social interactions. They are more comfortable to interact with people who they consider are equal to them. Someone’s status is defined by their role in an organization, where they work, which university they graduated from, and their marriage.

Strong Infrastructure

Japan’s infrastructure is stable and robust with 175 airports, 1,000 miles inland waterways, 17,000 miles railways, 16,000 heliports, and 760,000 miles paved roads.

For every 100 people, there are 125 wireless and 50 wired phone lines, and more than 93% of internet access is available to the entire population. The Japanese can choose from broadcast media, cable, satellite, and OTA to provide international and domestic coverage.

There is readily available power, but it could take about 105 days and different steps for new business connections.

Starting a Business in Japan

The procedure of doing business in Japan can be draining because they have different levels of bureaucracy before the company can operate. However, 3E Accounting can help you with this, and you can quickly contact them.

When it Comes to Building Relationships

Japan has a more relationship-oriented culture than most countries, especially when it comes to business. The Japanese want to know someone and build trust first before they can do business. They build relationships through social gatherings that involve eating and drinking.

Therefore, if you want to partner with a specific business in Japan, you must first build a relationship with them and gain their trust.

How to Start a Business in Japan

• You must register your office address – It cannot be a temporary office address, and it should not be virtual as well. You are not allowed to use your residential address, but there might be some exceptions.
• You need to have an overall capital investment of at least 5,000,000 yen. It would be best if you showed that there are 5,000,000 yen in your corporate bank account. You would also have to provide a financial report and other documents.

You must have at least two full-time employees (excluding you), and they must be permanent residents of Japan and other conditions.

Your capital must be 2,500,000 yen and one employee.

The Advantages of Opening a Business in Japan

There are many strategic and cost advantages when you’re doing business in Japan. You can set up a business in Japan in only 14 days, and if your business is successful, you can generate a good portion of the global profits in 3 to 5 years.

Japan’s modern and highly-developed infrastructure can be used for the distribution of goods and services.

If you managed to succeed in Japan, your chances of succeeding in other places are very high because Japan has a discerning market with high expectations. If they like your product, it means you are selling a high-quality product.

What Difficulties You Might Encounter

Taxes and Red Tape

While it is relatively simple to start a business in Japan, the other aspects might be hard. For instance, obtaining permits for construction takes 197 days on average, and it has 12 steps to complete. The tax structures in Japan are complex and markedly differ from other countries.

Local taxes can take about 330 hours to manage; it needs 14 different payment systems which can make app up to more than 50% of the net profits.

Complicated Distribution Channels

International companies might find Japan’s intricate distribution channels to be concerning. There is are a lot of domestic competitors, and Japan has a unique business culture.

However, the internet has made it possible for businesses to reach customers in Japan easier than before. It makes it easy for them to reach millions of Japan consumers quickly.

Aside from that, payment gateways and mobile payment solutions make it convenient to receive payments even in different currencies.

Relationship Barriers

The business structure in Japan is based on the close relationships between companies which may have been around for generations. Sometimes, foreigners experience meeting with business owners from Japan that might seem to be going well because they are agreeable. However, they only say “yes” as a courtesy to avoid being rude, or they do not want to admit they have a hard time understanding the conversation. Therefore, it can sometimes be challenging to close a business deal in Japan.

Also, if you do business in Japan, many companies mostly deal with local companies than those from distant places. It is ideal for them to partner with companies and suppliers that are within two hours of where their facilities are located.

You can contact us to help you with the entire process of doing business in Japan. Many opportunities are waiting for you in Japan, and they have one of the strongest economies in the world.