The time to launch a small or medium-sized business in Japan has never been more promising. In the last few years, Japan’s government has recognized the need to welcome foreign investors, foreign companies, and foreign workers into the country in order to boost its economy. There is a lot of Opportunities for Foreign Companies in Japan.
Recognizing the challenge that these entities face in taking advantage of this Japanese market entry, several programs have been instituted to help ease their path – such as simplifying business regulations and reducing the corporate tax rate.
While the process of forming startups in Japan has been made more accessible, it is the responsibility of any foreign business to educate itself about Japan’s business culture. Japan’s business culture is rigid and formal and international companies will be expected to know its complexities from the very beginning.
Although foreign businesses may well find it advantageous to employ Japanese nationals in their company, foreign employees must also learn about Japanese culture to help ease their transition into this new country.
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How to grow Foreign business in Japan
Becoming fluent in the language may not be necessary for the principals (CEO, CFO) of a foreign business, as there are always translators available. In reality, though, these individuals will increase their standing in the eyes of their host country by becoming fluent in Japanese.
According to the World Bank’s 2018 Doing Business report, Japan is ranked 34th out of 190 countries in foreign business opportunities, but, as mentioned above, these opportunities are tempered by challenges of learning the language and becoming familiar with the business culture.
Thousands of entrepreneurs (small and medium-sized enterprises, as well as corporations) have embraced these challenges and entered the Japanese market, and facilitator businesses have blossomed as well to help them navigate business regulations, accounting and tax requirements, and so on.
Business Opportunities for Foreign Companies in Japan
Japan is benefitting from increased tourism. According to Japan Today, 28.7million tourists visited Japan in 2017, which was an increase of 19% from 2016. Japan’s government is working to boost tourism to an average of 40 million each year by 2020.
Because of this, one of the key industries for foreign entrepreneurship is the hospitality industry. While tourism may peak in 2020, since Tokyo is hosting the Summer Olympics, tourism itself should hold steady for the foreseeable future.
The hospitality industry includes such sub-sectors as food service (restaurants, catering), and accommodations – although, unfortunately, government regulators have put a damper on the home sharing industry.
The Silver Market
Japan’s population is ageing, and because the country has a low birthrate, this “silver” population is perhaps even more of a consumer market than the younger generation.
With age comes age-related conditions. The silver market needs healthcare and solutions to these age-related conditions. They also need ‘gadgets’ to help ease any day-to-day burdens of their life – from hearing amplifiers to mobility enhancers.
The Youth Market
Although the silver market is a growing one, Japan’s young people shouldn’t be neglected. Like young people all over the world – and in fact more so than most – the younger generations embrace fashion, technology (they are absolutely “early adopters”)…but not necessarily romance.
In summary, market research is necessary before launching any new product line in Japan – be it a restaurant serving international food or anything relating to information technology, but the opportunities for success and growth are abundant in Japan.