Doing business in Japan information
by Venture Japan
Business in Japan is ALL we do! We provide recruitment, Japanese market-entry, PR, sales, marketing, company incorporation, branch-office registration, executive recruitment, and business management services (including registered address and representative director services), to companies doing business in Japan.
We specialize in the cosmetics and merchandising, software and technology, and financial services and banking industries, but our clients include a Forbes-list US billionaire, a leading European cosmetics and skin care products retailer, a leading European fragrances and perfumes retailer, a publicly listed financial services and banking company, an online advertising technology provider, a digital print technology research company, the world's leading construction industry online information and collaboration management service provider, the world's leading petroleum and chemical industry software developer, the world's leading online real estate asset management service provider, a leading property management company, a financial services (life settlements) company, the City of Osaka and many others.
Whether already doing business in Japan, starting business in Japan or managing a Japanese company in need of help, here are three simple steps to successful business in Japan:
The Lesson of Amazon in Japan
The Japanese tax-office recently hit Amazon.com with an unexpected $190M back taxes bill. The cause was a decision that Amazon.com attempted to avoid Japanese taxes by claiming its Japanese subsidiaries were simply supporting its Japanese operations (acting as 'customer liaison offices') and were not themselves generating revenue. The Japanese tax office disagreed.
Every foreign company doing business in Japan wants to minimize its taxes and Amazon.com was not the first company to try to do this by exploiting the customer liaison subsidiary.
The lesson from the Japanese tax office's ruling against Amazon is this: with rapidly declining tax revenues every foreign company is on the tax office's radar and any company trying to exploit the customer liaison subsidiary structure is advised to accrue for the possibility the tax office will disagree.
If a company seriously wants to claim its Japanese subsidiary is purely operating as a customer liaison office then it needs to ensure there is no daily interaction between its foreign managers and subsidiary employees, especially not in any areas connected with processing orders, invoicing or the collection of payments. In my experience there are few foreign companies that can take such an arms-length 'hands off' approach to their Japanese operations.>