There are around 450 British companies currently operating out of Japan from major FTSE 100 companies to SMEs – from high street names like Lush, Ted Baker and Fortnum & Mason to more niche offerings from the like of BrewDog.
And larger multinationals like Barclays HSBC, GlaxoSmithKline and Rolls-Royce also have a strong presence in Japan.
If you’re thinking of joining them, here’s everything you need to know about exporting to Japan…
What are the pros and cons of exporting to Japan?
The strengths of the Japanese market include:
- a huge, open economy
- a cutting edge business culture
- an increasingly globalised outlook
- strong intellectual property (IP) protection
- hunger for new trends and technologies
- high levels of disposable income, particularly older people and young singles living with their parents – in 2014 £9.4 trillion in financial assets was held by households.
And if you’re thinking of exporting to Japan, the advantages for UK business, are:
- stable place to do business
- strategic stepping stone for other Asian markets
- strong political, trade and social ties between the 2 countries
- highly educated consumers who are early adopters of new products and services
- large and rich consumer market based in urban areas
- Tokyo conurbation is the world’s largest at around 35 million
It’s not without its challenges though, not just logistically but culturally and you’ll be most likely to succeed if you have a long-term plan that develops and maintains relationships – which could mean making regular visits.
The good news is that while it’s historically been a difficult market to access, you can now enter the Japanese market directly due to:
- changes in business culture
- recognition of the importance of cost cutting
- easier communication
- a rise in English speaking capable employees
- growth of e-Commerce platforms offering ease of access to foreign companies
To make the whole process smoother though, it may be worth entering the market with the support of local partners.
And remember, you can now screen share and video conference, using Crankwheel.
How does tax work in Japan?
The main tax rates in Japan are:
- VAT – Charged at a rate of 10%
- Corporation tax – charged at 32.11%, though the government is keen to drop it below 30%
- Income tax – ranges from 5% to 45%, depending upon income.
For more on taxes in Japan, visit JETRO
How will I be affected by customs in Japan?
Japan has some very stringent customs regulations, check out Japan Customs for more information.