Your Presence in Japan
“Does my company really need an office in Japan? What are the benefits and costs for my business?”
Benefits
Opening an office in Japan can provide your company with significant benefits and often represents the first step of a long-term commitment to the Japanese market.
Get closer to your customers
The decision to open an office in Japan is often customer-driven. A major customer demands a presence in Tokyo before increasing its purchases. Distributors ask for same time-zone response to customer questions and requests. While in theory the Japanese market can be served from afar, the requirements of demanding Japanese customers, compounded by the difficulties of dealing across time and distance, cause many companies to consider opening an office in Japan to take their business to the next level.
Increase sales
In Japan's tightly-knit culture, customers prefer to deal locally with Japanese people and to do business in Japanese. Many Japanese customers, partners and suppliers see a local presence in Japan as a sign of your commitment to the Japanese market that makes them much more ready to commit to your company's products or services. They also want to pay in their own currency and avoid the expense and risk of international payments. Sometimes customers require a local entity in Japan to do business with you at all. If a company's products and services are truly sought after and competitive in Japan, a strong local presence here often drives sales to a level well beyond what is achievable from abroad.
Capture more margin
Your business model for Japan also drives the decision to open an office here. If demand for your product or service is growing in Japan or has the potential to grow, you may want to put in place your own sales organization to reduce dependency on intermediate distribution channels and capture more margin.
Monitor your competitors and market trends
A local presence allows you to have more impact in the market and get feedback directly from your customers about performance versus your competitors.
Cost and Obligations
Regardless of the benefits described above, the cost and the additional administrative complexity which comes along with the establishment of an office in Japan should be considered carefully as well. The following points summarize some of the more important aspects.
Startup costs
Starting an office in Japan involves legal and administrative costs which depend on the legal structure chosen. J-Seed's extensive experience helps to keep such costs at a minimum and efficiently manage the process. For detailed information on start-up costs please Click Here. All Prices quoted by J-Seed include all legal and administrative costs which arise in the process of setting up a branch or subsidiary.
Operating costs
Operating costs in Japan are driven by your business model for Japan. J-Seed's advice and network of dependable suppliers can help you to minimize costs and obtain an accurate estimation before you decide on whether you would like to setup your office or not. For example, we can recommend office space providers, accounting and law firms as well as other kinds of professional service firms offering competetive prices. All the firms we are recommending we have ourselves worked with successfully in the past. Please do not hesitate to contact us for a rough estimate of the first year operating costs. To provide you with comprehensive information, we can easily help you to compare different scenarios, from an outsourced contact office to a full captive sales operation.
Added tax, legal and accounting complexity
The setup of an office in Japan increases the tax, legal and accounting complexity of your company. In this regard the differences between a branch office and a subsidiary are significant. Please Click Here to obtain a detailed overview on the differences regarding tax and accounting. In the course of setting up your business we will personally discuss different scenarios with you and will provide business advice on the optimal way to structure your entity in Japan to fit your company's business strategy and tax and legal structures.
Added administrative burden on headquarters
With limited or no overlap in standard business hours and great cultural differences, gaps in communication and strains in relations between the home office and the local office in Japan can arise. See our tips for managing an office in Japan as well as information about our dependable recruiting partner that can help you find people who know how to work effectively with headquarters outside Japan.
