How to Do Business in Japan
January 2, 2018
The Land of the Rising Sun
Japan is arguably the origination point for many advances other than the sun. From CD players to karaoke, the Japanese are known for amazing presentation and innovation.
Japan’s middle class quite literally carries its highly consumer based economy. With the country being isolated by multiple seas, Japan has been pushed to improve efficiency, placing its product standards very high.
The aging population of Japan has created a need for medical equipment, pharmaceuticals, biotechnology, and robotics. But, if you’re not looking for the complicated stuff, Japan has a top notch manufacturing industry that you’d be hard pressed to find elsewhere. With its growth in markets like ecommerce, cybersecurity, and advanced manufacturing, Japan is constantly evolving.
The business culture may be difficult for a westerner to wrap their head around, but once you do it will be well worth your while. The people are bright, reserved, and have a lot to offer.
If you’re looking to evolve your business by finding a supplier overseas, Japan is the way to go.
Over the past 70 years, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation have helped Japan develop an advanced economy with products of quality.
Now that you’re hooked on doing business in Japan, you may not know where to start. A thing most people don’t know about Japan is that small businesses make up most of their market. They aren’t huge fans of brand names.
We’ve listed three cities we think are the best places to go for a small business.
Being the capital of Japan, Tokyo is the headquarters for many banks, commercial businesses, and major newspapers. It’s also home to the largest fish market in the world, efficient transportation, amazing food, crazy crosswalks, and so much more.
Ironically, the majority of the economy in Tokyo is maintained by small to medium businesses. With the Port of Tokyo’s high standards and openness to international trade, this city serves as Japan’s entrance point.
The consumer based market has also paved the way for a financially stable middle class. Not to mention, Tokyo has been named a number one city to visit by many travel advisers whether for business or pleasure.
Osaka has sparked some of the most successful high-tech startups in the country. The bulk of these startups deal in retail, services, and manufacturing, mostly considering the consumer based market. Fashion and technology are the focus of the retail industry, and Osaka has some of the most advanced malls in the world.
The manufacturing industry has been reformed to research clean energy. The advances of biotechnology in Osaka has attracted the best and brightest as well the eye of outside investors. If you’re looking to do business here you can rest assured that any product or supplies are worth every penny
As the headquarters of Nintendo and Intelligent Systems, it’s fair to say Kyoto is a hub of technological advances. The cities IT sector is in the spotlight because of how quickly it’s grown. Startups and new ventures litter the city and continually strive to further their research.
That being said, Kyoto still maintains its traditions. It’s home to many beautiful and historic areas such as temples that have been standing for some thousand years. Yuzen silk dyeing, pottery, and dolls still contribute largely to the city’s economy. Regardless of its amazing IT sector, Kyoto still pumps out amazing traditional artworks.
The currency of Japan is Yen (abbreviated JPY or JP￥). USD isn’t typically accepted in Japan, but the exchange rate is pretty reasonable. ATMs and banks are safe to use when exchanging or withdrawing cash.
A lot of purchasing is done with cash in Japan – anything from clothes to food. It’s a fair guess that a lot of street vendors and stores will not have ATMs or card readers for this reason. Keep a decent amount of cash on you throughout the trip in case you go out for food or anything else. Worst comes to worst you can go back to the bank and get it exchanged.
Japanese is the national language of Japan and is the language of business. Students are required to study English for several years before graduating making most people proficient at reading and writing it. However, some say that spoken English is a little harder to come by. Hiring an interpreter is always a good practice when doing business in other countries and the natives will appreciate it.
Holidays in Japan
Offices in Japan are open the standard 9am to 5pm from Monday to Friday like the US. Some places may be open on weekends depending on the office and there is currently an initiative by the government for businesses to wrap up at 3pm. Not everyone does this though so keep that in mind.
Here’s a list of holidays to be aware of when planning a meeting:
|New Year's Day||January 1st|
|Coming of Age Day||January 8th|
|National Foundation Day||February 11th|
|Vernal Equinox Day||March 20th or March 21st|
|Golden Week Holidays||April 30th - May 5th|
|Marine Day||Third Monday of July|
|Mountain Day||August 11th|
|Respect for the Aged Day||Third Monday of September|
|Autumnal Equinox Day||September 23rd or 24th|
|Health & Sports Day||Second Monday of October|
|National Culture Day||November 3rd|
|Labor Thanksgiving Day||November 23rd|
|Emperor's Birthday||December 24th|
Making calls from the US
Calling Japan from the US is quite easy if you follow these steps:
- Dial the US exit code, 011.
- Then 81 which is the country code for Japan.
- Next, dial the area code – they’re usually one to five digits long.
- Finally, dial the phone number – they’re usually four to seven digits.
If you’re not sure about the area code there are plenty of online resources that list them by city.
Traveling to Japan
Since we’ve gotten you up to speed on what Japan has to offer, it’s time to talk about getting there. There’s a lot of importance placed on fostering business relationships in Japan, and travelling to the country for a face-to-face meeting is an important part of that.
Thankfully, visas aren’t required for US citizens as long as they have a valid passport. That being said, this is only for a 90 day stay. Make sure your passport is valid for at least six months after you’re supposed arrival date. Some countries require this and it’s just a good habit to get into in general.
If you’re looking to stay longer though, there are a lot of different visas to choose from. We suggest checking out the US Embassy & Consulate in Japan website for more details.
Using a Cell Phone in Japan
Roaming can be super expensive in Japan and there isn’t a GSM network. This means that only newer phones that are considered 2G can work in the country. Your smartphone will be safe, but most flip phones will not be.
There isn’t a network that serves all of Japan, instead, each carrier operates its own network. That means you’ll want to know where you’ll be and what network covers that area before you buy a SIM. Typically you can rent a phone or a SIM card with an ID and a credit card easily. Most airports are good for that kind of thing.
Most places offer free wifi – hotels, cafes, tourist desks, airports, and other public places. Some western-style hotels may charge for it though. Some places may require you to pay for a limited pass that can last for anywhere from an hour to a week. They average at around four to seven USD. All in all, the internet in Japan is just as good as it is at home if not better.
When finding a supplier in Japan, trade shows can be a great place to start. If you’re not sure what’s available in a sector or who to even talk to, trade shows can build you the network you need. Once again, you’ll need an interpreter, but you’ll do the talking of course.
Here’s a few examples of the diverse trade shows Japan has to offer:
|Mobile Solutions Expo||Intex Osaka||Once a year (February)||Showcases GPS services, smartphones, mobiles, terminals, tabletPCs, handy terminals, peripheral devices, mobile software, middleware, mobile applications development|
|World Smart Energy Week||Tokyo International Exhibition Center||Once a year (February)||B2B Exhibition and conference on cutting-edge products and technologies from diverse energy industries|
|Beautyworld||Fukuoka International Congress Center||Once a year (February)||Cosmetics, perfumery, toiletries, hairdressers, and health care|
|Forestrise||Nig Hat, Nagano||Once a year (August)||International wood fair|
|IREX||Tokyo International Exhibition Center||Once a year (November)||International robot exhibition|
|Mass-Trans Innovation||Makuhari Messe - Nippon Convention Center, Chiba||Once a year (November)||International trade fair for railways technology|
Japanese business culture is complex, subtle, and extremely different from that of the US. When travelling to Japan, make sure you do your research and definitely hire a representative or interpreter. A couple trips to Japan will not be enough to fully understand how they do business and in most cases people do better when they have someone who grew up in the culture. We cannot emphasize enough how important an interpreter will be.
The hierarchy in Japan can be a little confusing. The oldest is usually addressed and served first in social settings, but the person with the most seniority is the most important in business settings. It’s probably best to wait and see who is addressed in what way first so as not to offend.
As we said earlier, the office hours are the same times as US businesses. However, Japan has a very intense working culture and most people regularly work overtime. If you get invited out for drinks after work or stay on late, you are expected to come in the same time the next day. Hangover or “workover” aside, you are expected to work normal hours the next day. In fact, 12 hour days can be the norm when working on a project.
While being a hardworking business culture, they also drink hard. The Japanese tend to keep their opinions to themselves in a work environment and avoid direct confrontation. Anything directly negative is viewed as insulting or uncomfortable. However, when you’re out for a drink with your associates in Japan, the rules of hierarchy and seniority seem to fade, as does their reserve. Some of the best business deals can be made during after work drinks and yes, they will honor them. Be prepared to get completely wasted on at least one day of negotiations, it is going to happen and is a good thing. Make sure to pack all the necessary painkillers for the following day.
The Japanese are very subtle and intricate in their communication. Body language and phrasing are a crucial part of how they get ideas across. They will never directly say no to something. Instead, it may come across as, “we do not have the means to do that right now,” or, “we will get to that later.”
They also tend to take a long time to come to a decision. This is usually because they are taking the time to get to know you and are collectively coming to a decision. Patience is a virtue when in Japan.
When greeting people for the first time, they will likely bow rather than give a handshake. Bows can range from a nod to a full on bend at the midsection, but don’t worry, the Japanese only expect a nod from foreigners. Usually a bow is deeper for someone of higher stature than you, but you are an honored guest and they know it’s foreign to you.
To get down to the more specific parts of Japanese business communication, let’s talk titles and honorifics. It’s polite to call someone by their last name unless they tell you to use their first name. That’s why when names are written the surname comes first. Moreover, when addressing that person, follow it up with “-san.” It’s a gender neutral honorific that is similar to saying “Mr.,” “Mrs.,” or “Ms..” If someone holds a degree or some form of education that makes them above another person like a teacher, doctor, or sometimes engineer, people will use “-sama.” Its essentially the more polite version of “-san.” When a person regards you as a friend they may use “-kun” or “-chan” at the end of your first name. Don’t initiate this yourself as it could be viewed condescending and requires a lengthy amount of time before you could be considered friends.
There are many Japanese honorifics and they play a complicated role in their society. You may use an honorific as a sign of respect, but be aware that it could be completely wrong and potentially offensive. We recommend you consult your interpreter and stick with the basic “-san” during your business talks unless requested otherwise.
Make sure that you have professionally designed business cards that are bilingual. Both languages is a nice touch, but presentation is everything to the Japanese. Perfectly wonderful deals have been denied simply because the person didn’t present themselves and their product in a notable way. Take that extra time to shine your shoes or buy some new clothes, it could very well pay off.
Although it’s considered polite in the US to maintain eye contact, it can be seen as confrontational to the Japanese. This habit can be a little hard to break, but try subtly watching your Japanese counterparts for what amount of eye contact is appropriate.
Gift giving is very acceptable on the first meeting and we encourage it. There should be enough for every person and shouldn’t be expensive. The gift itself isn’t as important the show of appreciation. It’s just a show of goodwill and a desire to do business. That being said, if you get a gift from an associate, accept it with both hands and don’t open it in front of the giver. It’s a private thing just for you and the Japanese will do the same.
To get a better idea for what to get your Japanese counterpart do a little research and make sure its something from your home and not anyone else’s. Things like snacks, candies, and nice office supplies are a good way to go.
Keeping your shoes on in homes, certain offices, and some restaurants is considered rude. The Japanese appreciate cleanliness and being neat, so often times they leave their outdoor shoes by the front. This may once have been the result of a belief in tradition and superstition, but now it’s just about hygiene. It’s not uncommon for people to walk around in socks indoors.
Snapping photos of people without their permission is extremely rude, but other than that most places will have a sign of a camera with a line through to indicate it’s not okay. In particular, taking photos of people on the train is forbidden. Times like these it’s good to learn phrases for asking permission to take a photo. There are many offline, free translator apps that you can get for your smartphone like Waygo and Google Translator.
Another thing to keep in mind for us expressive Americans is that the Japanese can be soft spoken. Generally people are quiet in public and don’t like making a loud fuss about things. This goes back to the whole being reserved thing.
Business negotiations will be harder for you if you don’t have an interpreter. At this point it sounds like a broken record, but it couldn’t be truer. That said, here are some things to look out for when you finally get to the negotiating table.
Because the Japanese are reserved and keep their emotions to themselves, they’re likely to have a good poker face. If you look around and find that the room is silent, and blank faced, or smiling, don’t let it faze you. It’s also very much a tactic used by the Japanese so be aware. A smile can mean many things in Japan, so the more you get to know your associates the better.
When trying to sell a deal or a product, talk about how it will positively affect your partner’s company. This can sound obvious, but that isn’t always the case. The Japanese value the needs of the company and the customer on the same level. In the US, there’s the approach that the customer is always right, but in Japan is far more than that. Talk about how your deal can ease sales to Japanese consumers – it’s guaranteed to peak their interest.
Once you’ve made your pitch, don’t be nervous if the room remains silent, even if you posed a question. Silence isn’t awkward, it’s meant to be a time for reflection. Don’t rush your business partners or push for a quick response because that’s considered rude. Patience is something you will need to have in Japan.
Don’t be surprised if the process is very slow. Americans like to get in and get things done. The Japanese do as well, but they like to take their time. They probably won’t come to a decision by the end of your meeting and will likely call you up around the time you’re supposed to leave. This is a negotiation tactic but is also how they do business. You’ll find that you’ll have meetings with new people every time and will probably explain the same things over again.
You need 7 tools to master international trade. Find out what they are.
Japan has been known for its low crime rates and extremely safe streets.But there are a few things to be aware of.
Japan’s banks and ATMs are very safe to use so your money will be in good hands. The things foreigners should mostly beware of are tourist traps like scams and overpriced, occasionally fake goods. An important note is that the urban legend of people being touched inappropriately on crowded public transit is a reality. Both men and women will have to be wary. Many travel blogs have discussed what cautionary measures to take in the event that this happens to a traveler. Be vigilant and take care.
We doubt you will run into this, but the Yakuza are very real. They tend to stay away from foreigners, however they will hang around certain districts at night. Your Japanese associates will likely avoid these areas so it shouldn’t be a concern for you.
Lastly, there have been stories from travelers that the police aren’t very welcoming. They have been known to stop people in the street and ask for identification on occasion. This is because there have been a number of disrespectful tourists in the past that can cause trouble for them. Once again, you probably won’t have to worry about this if you stick with your interpreter or associates though. Do keep your passport and wallet on you though, it could come in handy.
Regulations and Permits
The tariffs in Japan are very low, but despite this there can be requirements that can get in the way of selling products there. For this reason developing a long term relationship with a Japanese business is a must because you may be required to.
Hiring a representative will help immensely with customs. Typically problems with customs only arise from first time applicants for an import permit. Luckily, Japan is a part of many trade agreements and groups that make trade a lot easier for US businesses.
Japan generally restricts or forbids the importation of certain volumes of medications and firearms. It’s important to note that types of cosmetics are classified as quasi-drugs so they can be confiscated by customs depending on the volume that you’re importing. Make sure you have all your medications with you when in Japan, it’s just ordinarily not a good idea to try to get medication sent to you from back home – the police won’t take it well.
All that in mind, Japan is a fantastic place to do business. The difference in culture and social customs can be a little scary to the average US small business, but know there are options out there. The people are brilliant and innovative, you’ll never be bored.
Making a Payment
As technological innovators themselves, the Japanese appreciate efficient and economic payment systems. Bank wire transfers can be a hassle when trying to send money to a foreign country. You could end up spending your time going back and forth from the bank – time you could be spending on your business. All the while you won’t be able to track your money.
Veem is an online payment program that allows you to send money as easily as sending an email.
With Veem’s Multi-Rail technology and secure system, your money will arrive in Japan in a timely fashion without any hidden fees. Thousands of businesses in over 60 countries use Veem daily to pay their suppliers with ease.
Join today, and take control of your time and money.