How to Start a Company in Japan

Population density in Japan should shake up your perspective on advertising products.

The power of the Japanese economy has been felt worldwide since the 1980s. Japan's automakers used efficient production methods to price their vehicles lower than American counterparts to corner the market. This corporate model has been used by mobile phone, computer and toy companies in Japan for two decades. You need to recognize the distinct business culture and demographics in Japan before starting a new business.Your business can be successful by focusing on enduring trends in the Japanese market like portability, connectivity and customization.

Things You'll Need

• Business plan

Instructions

1. Subscribe to Japanese business publications to gain familiarity with the country's economic issues before starting your business. "Nikkei Business" is a major publication with an English-language version that provides briefings on the strength of the yen, economic trends and new products.

2. Attend trade shows and product fairs hosting Japanese companies to get a feel for today's most popular products. These shows will highlight the importance of portable computing, electronic novelties and clothing designed for Japan's evolving youth culture.

3. Take advantage of the Japanese External Trade Organization's (JETRO) free work spaces as you begin your search for production, retail and office spaces. JETRO has offices in Tokyo, Yokohama, Osaka and other major cities with cubicles available for up to 3 months. Use these cubicles to meet with distribution managers, investors and retail applicants to get your business started without paying for temporary space.

4. Examine the corporate tax situation for international business owners in Japan before registering your company. The Japanese government charges a 41 percent corporate tax rate, though international treaties with the United States, Canada and European nations may ease this burden. Consult with your tax adviser to find out about business perks given to new businesses by non-Japanese owners.

5. Register your business with your local prefecture using Japan's distinct business titles. Your business may be a tokumi yugen kaisha (LLC) or a tokumei kumiai (limited partnership) depending on the prefecture's rules.

6. Create buzz for your product by signing up for social networking websites popular in Japan. The hottest social networking site in Japan today is Mixi, a website allowing friends to organize activities and discuss their lives. Hire a part-time Mixi expert in Japan to manage your page and find ways to get word out about your company.

7. Recruit retail associates, production staff and managers in Japan before you open your first outlet. Hire at least one manager during an early trip to Japan who can interview applicants and offer advice to help you find reliable employees. Err on the side of hiring a handful of excellent workers willing to grow with your company rather than burning through hundreds of applicants.

Tips & Warnings

• Adjust your advertising and distribution efforts in Japan based on the nation's high population density. You can focus on leaflets, posters and billboard ads near retail outlets carrying your products to reach thousands of new consumers. Wait to advertise on a larger scale until you have saturated your target neighborhoods.

• Avoid offending Japanese consumers with crass TV and print ads by hiring Japanese consultants. Use freelance consultants who can be called on to review proposed ad campaigns and offer suggestions on making these ideas more palatable for local consumers. Convert your product prices, payroll and Japanese assets into the yen early in your business to avoid conversion problems. Get your staff familiar with the yen to ensure that distribution, pricing and wages are paid in the right amounts.

Resources

• Japanese External Trade Organization
• Nikkei Business
• Profile of Mixi