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Get started to your business in Japan

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If you want to expand your business in Japan, it requires established process to show your commitment to Japanese market. This slide explain the process of 10 steps as tips.

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Get started to your business in Japan

  1. 1. Get started to your business in Japan Best practice of 10 steps to start business in Japan Every succeeded US company in Japan walk through this way
  2. 2. “When in Rome, do as the Romans do.”
  3. 3. 1. Establish legal entity
  4. 4. Why you must establish legal entity in Japan? • Show your commitment to Japanese market • Japanese enterprise people know that you can run away from Japanese market easily unless you establish legal entity. • Earn Japanese people’s trust • To show your legal existence proof • Become a member of Japanese society • You must be a member, not a guest for Japan. • To hire excellent Japanese people for your local staff • Belonging registered local company = personal credentials for employee in Japan • To offer benefit program to local staff • Health cost insurance • Welfare pension • Local company have to dealing with payment income tax and residential tax instead of local staff, that makes life easier for them. • To get “.co.jp” domain for localized website. • It requires legal entity to get “.co.jp” domain. • Japanese people know that only registered corporation can get a “.co.jp” domain, so it makes credential, Japanese credit research company check it when they survey your business.
  5. 5. Find a Solicitor (Shiho Shoshi) who can speak English • Solicitor is certified lawyer in Japan who can help you register/update company information to Legal Affairs Bureau in Japan. http://www.shiho- shoshi.or.jp/html/global/english/index.html
  6. 6. How to establish legal entity in Japan 1. Make “Articles of incorporation” in manner of Japanese law. 2. Get notarize your “Articles of incorporation” at notary public officer. • It takes a day. • The total cost for notarize is around 1,000 USD. 3. Chose company types • Two choices • Kabushiki Kaisha (known as “K.K.” in US people) • Equivalent to Corporation in US • Goudou Kaisha (Known as “G.K.” in US people) • Equivalent to LLC (Limited Liability Company) in US • Most Japanese are not familiar with GK, but that is OK. • Let assume Japanese representative as local entity representative.
  7. 7. Notary Public Office
  8. 8. How to establish legal entity in Japan (cont.) 4. Make seals Kaku-in(box-shaped seal) This seal is used for marking “official” on corporate documents, for not only public but also internal. Ginko-in(seal for banking account) This seal is used for marking on documents for banking account. Daihyo-in(seal for representative) This seal is used for marking on legal documents. It requires to register this seal print to Legal Affairs Bureau.
  9. 9. How to establish legal entity in Japan (cont.) 5. Open a local bank account and pay money into it to get “Certificate of Deposit of Paid Money” • This is the document required to register legal entity. • There is no a minimum sum for deposit, but sum of deposit equals to credential in Japan, so I recommend to deposit 10,000 USD at least, 100,000 USD or more is best. • It requires Ginko-in (seal for banking account). 6. Make an application form to establish legal entity to Legal Affairs Bureau • It requires Daihyo-in (seal for representative). • It requires your registered personal seal in Japan or signing certificate from US embassy, if you are going to be representative as well. 7. Apply to establishment form to Legal Affairs Bureau • It takes a week. • Application fee is deposit * 0.007 or 1500 USD (bigger one)
  10. 10. Legal Affairs Bureau
  11. 11. A copy of a registration certification The above is Apple Japan’s one. Once you register your company, anyone and everyone can get this copy of a registration certification at Legal Affairs Bureau with 4 USD fee, so it works as checking credentials.
  12. 12. Cost for establish legal entity in Japan Item Cost/Price Example Fee for Solicitor 700 ~ 1,500 USD 1,000 USD Notarize Articles of incorporation 1,000 USD 1,000 USD Make seals 100 ~ 500 USD 300 USD Deposit as Capital fund From 1 to ∞ USD, it is your choice. 10,000 USD at least. Recommend 100,000 USD. 10,000 USD Application fee Deposit as Capital fund * 0.007 or 1500 USD (Bigger one) 1,500 USD Total 13,800 USD 1 USD = 100 JPY in this calculation
  13. 13. Optional: invoke at shrine for business success It costs 300 ~ 500 USD, it is important as a form of initiation in Japan.
  14. 14. 2. Register your Japanese company to Tax Office
  15. 15. Find a Tax accountant • Tax accountant is certified tax attorney in Japan and they help you tax matters in Japan. • It costs 300 USD/month as monthly advisory fee. • At the end of fiscal year, it costs 1,000 ~ 3,000 USD for creating financial statements for Tax office. http://www.nichizeiren.or.jp/eng/
  16. 16. Register your local entity to Tax Office • It requires to register your local entity to Tax Office. • Consumption Tax • Even if your company charge fee from US, it requires to register. • Because all Japanese and Japanese entity have to pay “consumption tax” when they buy something. • Your company have to charge 8% of the price as consumption tax behalf of Japanese government. • You have to pay it to Tax Office at the end of your fiscal year. • Corporation Income Tax • Minimum corporation income tax is 700 USD/year. It has to be paid even your company has no revenue or charge fee from US.
  17. 17. 3. Register your Japanese company to Local Government Unit
  18. 18. Charge residential tax instead of Local Government Unit • It requires your Japanese company has to deduct income tax and residential tax from Japanese employee salary every month. • It requires your Japanese company have to pay those tax behalf of Japanese employee to Local Government Unit. • Your Tax accountant will take care of them.
  19. 19. 4. Register your Japanese company to Labor Standards Supervision Office
  20. 20. Find your Labor and Social Security Attorney • Labor and Social Security Attorney is certified attorney in Japan and they help you social insurance and welfare pension in Japan. • It costs 300 USD/month as monthly advisory fee. • It costs 1,000 ~ 3,000 USD to creating labor related agreement and application. http://www.shakaihokenroumushi.jp/en/tabid /296/Default.aspx
  21. 21. Apply registration legal insurance for employee • Apply registration for “Workman's accident compensation insurance” to Labor Standards Supervision Office. • Apply registration for “Unemployment insurance” to “Hello Work” (job-placement office). • Your Labor and Social Security Attorney will take care of them.
  22. 22. 5. Register your Japanese company to Japan Pension Service
  23. 23. Japan Pension Service
  24. 24. Apply registration social insurance and welfare pension for employee • It requires your Japanese company has to deduct social insurance fee and welfare pension cost from Japanese employee salary every month. • It legally requires to your company pay the half of social insurance and welfare pension for Japanese employee. • Your Labor and Social Security Attorney will take care of them.
  25. 25. 6. Opening office in Japan
  26. 26. Why you have to open office?
  27. 27. Home office is common in US, but… • You have to give Japanese employee to choice, work at home or work at office. • Because most people don’t have a room for working at home. • It often requires to hold meetings face to face with Japanese people. • Web/Video/Skype conference isn’t common in Japan, some companies prohibit them from security point of view. • For Japanese, face to face meeting is still popular. • Not only Japanese customer but also hiring candidate check office location. • It is important to select right place to open office. • Sometimes Japanese customer visits to check your office.
  28. 28. Face to Face meeting is still popular in Japan
  29. 29. Most Japanese apartment is small so no space for working environment (Especially young generation employee)
  30. 30. Even middle age generation who bought condominium, it is hard to find a room for working. Bed room for first children Bed room for second children Bed room for husband and wife Living/Dining Typical condominium (75㎡ = 807 square feet) in Japan
  31. 31. 7. Hiring local staff
  32. 32. It is hard to find Japanese candidates who has high English capabilities Rank Country TOEFL Score 1 Netherlands 100 2 Denmark 99 3 Singapore, Australia 98 80 Korea 81 105 China 77 135 Cameroons 70 135 Togo 70 135 Kuwait 70 135 Japan 70 139 Guinea 69 139 Sierra Leone 69 163 Mauritania 58 Rank Country TOEFL Score 1 Singapore 98 2 India 92 3 Malaysia Pakistan Philippines 88 9 Korea 81 16 China 77 24 Afghanistan 73 24 Mongolia 73 24 Vietnam 73 25 Japan 70 28 Laos 67 29 Tadzhikistan 66 30 Cambodia 63 Worldwide Asia http://www.meti.go.jp/policy/economy/jinzai/san_gaku_kyodo/sanko1-3.pdf
  33. 33. High English Capabilities won’t assure excellent capabilities in Japan Excellent Capabilities High English Capabilities Japan Excellent Capabilities High English Capabilities Global It is hard to find candidate in this area. Most high English capable people are specialized for English capability only.
  34. 34. Don’t request “perfect” English capability if you want to hire qualified people in Japan • High English capability doesn’t mean equal to high capability in Japan. • Most Japanese are afraid of working in foreign company. • “Better the devil you know than the devil you don't.” • You have to explain your company career education, career path, corporate culture, personnel evaluation system and work environment clearly and carefully. • It is hard to find candidates who has high English capability and high functional skills in Japan. • If you request both, it takes much time and cost to find candidates.
  35. 35. Hiring low English capabilities but Excellent people and educate them English at school at night is great option. You can inspire high loyalty in Japanese employees.
  36. 36. 8. Localize products and Website
  37. 37. Without Japanese website, your company isn’t exist for Japanese in cyberspace. • Most Japanese avoid to read English website. • Keep in mind, Japanese search Google in Japanese, not English! • When sales try to get appointment, almost Japanese customer check your website. • If the website is English only, that means “It seems hard to dealing with this company” for customers. • It is important to get .co.jp domain. Only legal entity in Japan can get this domain name. This is the proof that your company is legal entity in Japan.
  38. 38. Localize in Japanese your product and documentation • You have options to localize product and documentation in various ways. • Ask translation company • Localize service
  39. 39. 9. Prepare business toolset
  40. 40. Prepare business card
  41. 41. You can’t business without business card in Japan • It is etiquette that you exchange business card in Japan. • Invest money for creating good quality business card. • If you cheapen business card, that impress yourself “cheap”. • Never run out business card. • Business card helps people to remind you. • If you don’t exchange business card with someone, people feel slighted or undervalued. • If you make cheap business card in Japanese, that means “temporally”, Japanese people won’t believe your commitment. • If you want to make impress as “valued person”, make high quality business card, like every Japanese company CxO does.
  42. 42. Prepare logo and address printed envelope = branding
  43. 43. 10. Press Release and Media Interview
  44. 44. Reed Hastings, Netflix CEO came to Japan and took media interview to announce start business in Japan
  45. 45. Logan Green, Lyft CEO came to Japan and took media interview to announce starting business in Japan
  46. 46. Dave Wright, SolidFire Founder came to Japan and took media interview to announce starting business in Japan
  47. 47. Media Interview: Final rite of passage to birth of your business in Japan • Never skip this! Or you will fail. • Recommend CEO show up in Japan. At least, other CxO or VP should come. (But that would be less impact for Japanese media. It might be taken as sign that you don’t commit to Japanese market.) • The cost is not so high, 10K to 20K USD. • It depends on PR company. Recommend to use local PR company, or you will fail because US based PR company don’t know Japanese customs. • Japanese media will write articles, and Japanese will know your business. • All bets are on! All preparation now become the evidence that you commit to Japanese market and ready to start. • Local entity • Office • Japanese employees • Japanese website • Business toolset • Localized products/services • Don’t forget to prepare small gift, give away as souvenir. • This will be sign that you understand Japan. • Ask your Japanese representative or local PR company to chose and prepare it. • It is small thing, but important thing in Japan. Not matter of money, matter of hospitality.
  48. 48. Welcome to Japan!
  49. 49. Now you are become member of Japanese society, not a guest.
  50. 50. After lunching your business in Japan
  51. 51. Keep in mind: Japanese business process is slow. • In Japan, we have an idiom that says “Three years on a cold stone will make the stone warm”. • It means you should not give up, and that perseverance and patience will bring good results. • Japanese business process is slow. Don't give up!
  52. 52. Need help? • Yoichiro Takehora • Yoichiro@takehora.jp • https://jp.linkedin.com/in/takehora

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