Expanding a Business to Japan

Looking to expand your business to the Land of the Rising Sun? If so, Japan has held an enviable reputation of being one of the most lucrative economies in the world (5th, according to the World Bank 2018, with per-capita income at $44,000 per citizen). However, it remains a tough nut to crack for foreign investors, with its unparalleled attention-to-detail and numerous barriers to entry — leaving Japan as an opportunity that only few businesses can penetrate.

In this article, we’ll take a look at two different ways to expand to Japan: one, the traditional method; and two, a newer method made possible by developments in VoIP and cloud computing.

Gaining Access to Japan: The Traditional Method

When one conjures up images of Japan, it is most likely with the country’s vivid temples, unparalleled cuisine, bullet trainsa hardworking and intelligent populace, and futurism that’s in a class of its own. This means that Japan is a frontier on every business’ aspirations. Who wouldn’t want to tap into the country’s robust industries that show no signs of letting up in the 21st century? Japan remains a leader in automotive, ecology, information tech (IT), biotech, retail, and many other emerging technologies, proving it is a highly viable market.

However, to gain access to Japan’s endless opportunity isn’t easy. Here’s a brief overview of what’s required to set up a physical presence in Japan:

  1. Incorporate Your Business in Japan
  2. Obtaining Visas and Residence Status
  3. Paying the Appropriate Taxes
  4. Managing a Japanese-Based Workforce
  5. Understanding Trademark/Design-Protection Systems

Each of these headings has unique processes and needs in order to obtain approval from the Japanese government. (To grasp the enormity of the task, visit Japan’s External Trade Organization’s guide to setting up a business as a foreign national.)

Even if you decide to go through these steps, there are a few catches:

  • You’ll have to gain approval from the Japanese government before making a single profit. This means that your business may be operating at a substantial loss that can hopefully be recouped if you gain traction in Japan’s markets.
  • Many of Japan’s top companies get first-dibs on recruiting high-performing employees across the country. This leaves foreign entities with a smaller pool of job applicants, or they have to find organizations that tailor their services towards foreign commerce and staff.
  • Obtaining business real estate to lease is incredibly difficult, with Japan featuring some of the most expensive per-square-footage in the world.

The Second Option: Expanding to Japan Virtually

The truth of the matter is that the traditional method of doing business in Japan is outdated thanks to the advent of virtual offices and virtual locations. Your business can avoid setting up a physical presence and all of the red tape simply by accommodating customers using the #1 method of reaching new clientele and Japanese businesses: virtual phone numbers.

Virtual phone numbers form a huge component of establishing a virtual presence in Japan, as you are able to field calls from Japanese customers no matter where your company is located in the world. Virtual numbers exist over the internet, so when someone dials a virtual number, regardless of where the location is based on the digits, they will have no knowledge of where that call is actually received.

Virtual Business Applications in the 21st Century

What does this mean for your business? Here are a number of efficient and cost-effective advantages that come with virtual phone numbers that work with Japanese markets:

  • First, it means that if you purchase a Japanese virtual phone number, your business can have those calls routed to your pre-established salesforce in your headquarters or branch offices.
  • Second, virtual phone numbers are identical to local Japan numbers in both look and function. Considering that Japanese customers are dedicated to keeping their culture unique, they appreciate it when your company helps retain their unique culture and way of doing business.
  • Third, virtual phone numbers are cost-effective. As mentioned previously, it can take a significant amount of resources and time to establish a physical business presence in Japan. By using a service provider your business can significantly reduce this amount by leveraging a virtual presence in Japan. For small businesses and startup companies, this is ideal.
  • Last, virtual phone numbers are available in many different varieties, which your business can adapt to its needs. For example, using ITFS numbers (known as “International Toll Free Service numbers,” which are toll free numbers that work internationally) — your business can reach Japanese markets that won’t be charged for calling your business.