How to Do Business in Japan
What companies should consider when doing business
Japan can be an incredibly rewarding market, but you should be prepared to make a long-term commitment. Building relationships over time with Japanese companies does matter. Quick success is possible, but it is patience and loyalty that will reap the really long-term benefits. This is why Japan is a market requiring a strategic approach rather than an opportunistic one.
When developing a relationship with a potential Japanese partner:
Expect questions and follow-up quickly on any requests for information. It may not seem so important to you but the Japanese side may be very keen on details.
Develop and maintain relationships.
Make regular visits to the market.
Treat "test orders" very seriously.
Remember that after sales service is very important.
Gateways/Locations - Key areas for business
Although the greater Tokyo metropolitan area and Osaka are the two largest commercial areas, there are regional clusters and opportunities depending on the sector. The Japan External Trade Organization (JETRO) provides in-depth profiles of Japan's regions at www.jetro.go.jp/en/invest/region
Market entry and start up Considerations
JETRO produce a guide to "Laws & Regulations on Setting Up Business in Japan" here www.jetro.go.jp/en/invest
Customs and Regulations
The Japan Customs website is a useful source of information. Their website is at www.customs.go.jp/english.
Legislation and Local Regulations
Companies are best advised to seek legal/taxation advice before entering into a joint venture or similar type of partnership. Lists of local lawyers and chartered accountants are available on request from the UKTI Section of the British Embassy in Tokyo.
Responding to Tenders
Please contact the UKTI Japan team for specific advice on this.
Recruiting and Retaining Staffing
Lifetime employment used to be a dominant feature in Japanese companies but this has been crumbling as companies seek to reduce costs, and younger employees are more open to the idea of changing jobs. The recruitment market had been growing steadily until the global financial crisis and international recruitment agencies such as Michael Page, Robert Walters and Manpower have offices in Japan. There is a plethora of recruitment agencies/headhunters who cater for personnel needs of foreign companies ranging from junior support staff to CEO. Many are members of the British Chamber of Commerce in Japan (BCCJ).
Job mobility is higher in sectors such as finance, IT and consumer goods but less so in the more traditional manufacturing industry. There has been an increase in English speaking job seekers but it can still be difficult to find candidates with English language ability and experience and knowledge of a certain business sector particularly if the sector is in a technological niche area.
Dismissal of staff is not easy. There is considerable precedent in case law to the effect that it is necessary to meet certain criteria (e.g. selection of affected staff has been made reasonably) in order for the dismissal to be deemed reasonable.
Standards and Technical Regulation
Japanese domestic standards often differ from international norms. The Japanese Standards Association has a website at www.jsa.or.jp
Intellectual Property Rights
Patent, utility model, trademark, copyrights and design are the main intellectual property rights associated with trade and industry and there are Japanese laws governing the registration and protection of these rights.
Japan's trademark law offers equal protection for Japanese and foreign nationals. UK companies with an intention to develop business in Japan can register their trademarks with Japan Patent Office (JPO) even if they do not have an office in Japan (NB: provided that the trademarks are used within 3 years after registration). Japan adopts a "first-to-file" principle which means that a trademark can be registered even if it is not yet in use. Once registered, a trademark is protected for 10 years.
The "first-to-file" principle applies also to patents and it is advisable not to publicise an invention until it has been registered. The protection period for patents is 20 years.
Details on the registration procedures and the fees involved can be found in the JPO website (www.jpo.go.jp).
Source - UKTI