With a population of 127.3 million people and an economy which, despite not booming in quite the way it was several years ago, is still ranked as the third largest in the world when measured via GDP, Japan is a market that is ideal for UK businesses to get involved in.
As well as the opportunities offered by Japan, and in particular larger cities such as Tokyo, the process of setting up an office in the country is bound to throw up a plethora of issues and difficulties, particularly with regard to the language barrier and the need to get to grips with an entire new regulatory regime.
There are, however, two pieces of good news for anyone wishing to take advantage of Japanese business opportunities, There are not only good sources of official advice that are freely available, advances in telecommunications technology now make it quick and easy to set up a low-cost virtual landline in Japan. This gives a UK business access to Japanese consumers without the need to actually source premises and undertake the logistical challenge of relocating.
Should I establish a branch office or Japanese subsidiary?
For anyone wishing to trade in or with Japan, however, there are certain rules and regulations that must be taken on board. These start with registering your UK-based business with the Japanese authorities. If you opt to open a branch office in Japan itself, then it is mandatory to be registered as a Foreign Company. The type of company established is likely to be either an actual branch office or, for those wishing to trade on a smaller scale, a Japanese subsidiary.
The convenience and lower costs attached to opening a branch office in Japan are mitigated by the advantages offered by a Japanese subsidiary in terms of taxation and liability. The municipal tax paid by your company will be calculated on the basis of the capital stock being held by your headquarters, which means that larger companies will inevitably end up paying more than smaller subsidiaries.
Another issue to consider is the fact that any debts and expenses created by the Japanese branch office will automatically be linked to the headquarters of the company, meaning that any risks being taken by the fledgling business in Japan become risks for the wider company. By creating a subsidiary in Japan, your business will be able to limit these risks through the creation of a virtual firewall between the parent company and the subsidiary.
What business structure should my Japanese enterprise take?
The structure of the business you set up in Japan will vary depending on your exact aims and intentions. Until recent years, the traditional business structure in Japan took the form of a Corporation, although Limited Liability Companies as frequently created in both the UK and the USA are becoming more common.
The current raft of laws and regulations in place in Japan tends to mean that the corporation structure, although less familiar and therefor representing more of a challenge, offers greater structural flexibility and an ability to respond more rapidly to any changing circumstances.
No matter which type of business structure is ultimately decided upon, it is vital that any business setting up a base in Japan seeks the advice of a reputable tax counsellor or judicial scrivener, in order to ensure that mistakes aren’t made during initial set up which could go on to rebound in an expensive and damaging manner further down the line.
Do I need a visa?
Yes. As a foreign national, you will need to apply for a visa in order to live and work in Japan. In most cases this will take the form of an investor/manager visa, although alternatives include Permanent Resident or Spouse of a Permanent Resident visas.
To apply for a visa of any kind, a business owner must first apply for a Certificate of Eligibility. The documentation required when making such an application includes a passport-style photograph, a certified copy of the company register of an inviter in japan, the company brochure of an inviter in Japan and a copy of the business plan or financial statements provided by an inviter in Japan.
Create an instant bond of trust
As can be gathered, despite the potential rewards on offer, the process of setting up business in Japan can be long and arduous. Telephone Number Solutions offers a way round this by providing UK businesses with local and toll-free Japanese phone numbers that help to create an instant bond of trust between you and prospective partners or customers.
Confusing international codes will be a thing of the past, after Telephone Number Solutions create a virtual Tokyo telephone number which routes back to a landline or mobile number of your choice, allowing you, in effect, to open a virtual Japanese office.
For more information about cost-effective telephone numbers for your business, contact Telephone Number Solutions today. While we are always happy to receive email enquiries, we think it’s good to talk so call us on 0333 130 7651.
Image credit: tsukikoiwamura