Doing Business in Japan

Japan:  the land of centuries-old culture, beautiful architecture and touchingly-beautiful nature.  Still, Japan, has, in recent decades, acquired a profile as a country with an eye for trends and fashion.  Japan is synonymous with advanced technology and, above all, a very high level of education.  In addition, Japan has, through this, allowed itself to become strongly influenced by the West.  Thus, among other things, it is now attempting to attract Western multinationals.  Nevertheless, Japanese culture, with its thousands of years of traditions, and only superficial permeation of Western influences, makes it hard to do business in Japan itself.

Cultural differences

Language

Despite their English nicknames, most Japanese people speak only one language.  English is only spoken in the big cities and it is limited at that.

Business contacts and meetings

It is certainly important in your business dealings to show the necessary respect for Japanese culture.  Thus, dress formally and conservatively.  Outrageousness or individuality in your choice of clothing will not be appreciated.  In addition, it would be a good idea to look after your feet and to avoid holes in your socks, as you will often have to take off your shoes in both private and public buildings! When meeting people for the first time, shaking hands is most uncommon.  Instead, the Japanese greet each other by bowing to one another.  The type of bow depends on social rules.  Fortunately, as a foreigner, you will not be assumed to know which one applies.  It is certainly expected of you to sit at the side of the table.  The top of table is reserved for the highest in rank.  At such a meeting, do not forget also to show your interest by taking notes – not in red!–and by mentioning the ideas of other people at the table. Nor must you forget to bring a business gift.  This can’t be just any standard gift from the gift shop around the corner, but must be completely appropriate for your business partner(s).  At all times, avoid giving a set of 4 gifts (or a gift that comes out of a set of 4).  In Japanese, after all, the number 4 sounds the same as the word for death, a symbolism that you might wish to avoid entering into a new relationship! As important is the exchanging of business cards.  This is seen as a real ceremony.  Also make sure to read those cards you receive with a genuine interest and certainly don’t write anything on them!

Business world

In Japan, the group stands above the individual.  It is structured as a type of strong hierarchy.  Japanese companies are also run according to this social ranking.  Furthermore, if you wish to take a break during a meeting, you should wait until the person running the meeting, or the highest-ranking business associate, gives you permission to be excused.  The same applies before beginning to eat at a business dinner. Moreover, the person chairing a meeting is often older than the employees.  Thus, employees can never express criticism of the boss, let alone to his face!  When being reprimanded, you should thank your superior and afterward – and only if it is asked – give an explanation. When a Japanese company, or entrepreneur, enter into an association, the risk is increasingly spread over multiple business partners.  Simple decisions can therefore become time-consuming and you must show the necessary patience.

Economic market

Nevertheless, Japan remains an interesting place to set up a company.  This is how Japan ranks third in the world’s economy.  This is not just due to its widely-known and high-quality production market; thanks also to its food and drink sector, biotechnology, nanotechnology, pharmaceutical industry, ICT and automotive engineering, has Japan been able to place the bar so high. In addition, Japan invests no less than 3.5 per cent of its GDP annually in Research and Development.  Through this, local research institutes and universities are the standard bearers for leading and innovative research in areas such as air and space travel, life sciences, micro- and nano electronics, and energy. Along with this, it is useful to know that the Japanese generally pay well.

Partner DBi

These economic advantages intrigue many entrepreneurs.  The cultural climate, however, keeps most of them away. Now we have a solution for this.  We are proud to annouce that we now have a partner in Japan who can facilitate the cultural differences between Japan and the West. With the help of our partner, we can help you set up and run your Japanese business.  They look after all bookkeeping, accountancy and (fiscal) administration, conform to local and international law.  They can also take charge of correspondence with the Japanese authorities.  In addition, all communication and documentation is in English, so you don’t have to worry about a possible language barrier.  In this way, you need only focus on what is really important:  doing business. Would you like more information about doing business in Japan or to make more use of our services in order to make doing business in Japan a reality?  Then contact us.  We would be only too glad to be of service.