The walls to start a business in Japan

The 2020 Tokyo Olympics is coming soon, and there are increasing inquiries from foreigners who want to start a businesses in Japan, such as expanding sales channels for products in Japan, or importing Japanese products, etc. Both the central and local governments of Japan have begun policies such as special economic zones to support such trend. However, Japan is an island nation, and for 400 years from beginning of 17th century, Japan closed its country by restricting exchanges with foreign countries. As a result, there are many differences in the business environment. For many foreigners, it could be considered as a “wall”.
I would like to introduce such differences in Japanese business culture.

Wall 1 Government

The Japanese government has been active in accepting foreigners, but officials on the ground have not yet reached that level. Many are basically conservative, as inherited from the Meiji era. To start a business in Japan, you have to obtain permission or registration from various government offices. In order to start a business, such as the Legal Affairs Bureau of company registration, the Working visa to Immigration Service, and the used car business, you must submit a lot of documents to the police station to acquire secondhand dealer license and a tax office to import and sell liquor. Permission to start a business will not hurt you for being a foreigner, but explanations may be rough or inadequate some time.

Wall 2 Language

Unfortunately, you must submit your paper or electronically to get those permits. However, most of the documents are in Japanese. The only part that is accepted in English may be the visa application. Even the guidelines for obtaining permission are all in Japanese except for some visa-related items. Without support for those who can speak Japanese, there will be a lot of struggle to get permission. In order to obtain a business license, it is often necessary to determine the person in charge and take a seminar hosted by the government office, but most of the such seminars are limited to Japanese only. In the case of foreigners who cannot speak Japanese, there is no choice but to appoint or accompany someone who can speak Japanese.

Wall 3 Banking

In recent years, it has become increasingly difficult for foreign-invested companies to open corporate accounts in some industries, as Japanese financial authorities have put forward a policy to strengthen anti-money laundering measures.
Also, financing for foreigners is not very active, and financing for people other than those with permanent resident status or a Japanese spouse is not easy at present.

Wall 4 Business habits

The decision-making process of Japanese companies is very different from that of Western, Asian and other companies. It is often said that decision-making is slow, many business meetings, but no progress at all, have to exchange business cards with many people, but do not know who has the authority to decide. . . and so on.
A story about a Japanese company and a company in Zhejiang Province, China, said that the managers level agreed to launch a joint venture, and after that, the Japanese company delegates visited China many times, including the top management from Japan. In each case, the Chinese side responded in anticipation of when to give the go-ahead, but the Japanese side could not decide and ended up being neglected. Thus, negotiations with the Japanese also require patience.
They can all be described as one common character, a culture where responsibility is shared by as many people as possible. However, the Japanese have the habit of once they decide, they always do it.

To overcome these barriers, Onestop Kawasaki can support foreign entrepreneurs by using expertise of each member.

Published by

Ritsuya Kaminaga

Certified Administrative Procedures Legal Specialist