Doing Business in Japan: 21+ Pros and Cons (You Must Know)

Japan today offers one of the nation’s biggest continuously running markets. However, apart from all the environmental and ecological problems that the country has to face, it continues to be among the most successful commercial havens for big and small firms.

Whenever you want to start doing business in Japan there are some desirable ratings to note. It performs well in many places, especially because the usual working week from Monday to Friday is 8 am-6 pm. 

Benefits of Doing Business in Japan Drawbacks of Doing Business in Japan
Gateway to Asian MarketsHigh levels of bureaucracy
Highly educated workforceThe tax system consumes time
Strong work ethicsThe domestic transfer is challenging
Clear-sighted consumers/customersGender equality can create a problem
Devoted and dedicated employeesProperty registration is lengthy
Excellent at resolving insolvencySlow in utility work
Consistent improvement in businessDelay in the construction process

Advantages of Doing Business in Japan

  • Creating Solid Economic Portfolio is Easy

Japan provides a modern structure of financing that is open to companies of any size while doing trade. This means when the company has an outstanding credit score, it has a fairly easy process to get lending.

Though its levels of bureaucracy which everyone practices, will hold down the process relative to other advanced nations, the absence of revamping doesn’t preclude a company from receiving the resources they need to grow their existence.

  • Imports and Exports can be Managed Easily 

Since Japan is an island country, there are many ports that can handle a new company’s import/export market. Completing an import order here takes just five days, and even the export process just takes on average ten days to complete. Compared with the rest of the developing world, these prices make this benefit an above-average experience.

The explanation behind this includes the connections that are a fundamental viewpoint of the Japanese business culture.

  • Corporate Culture Focuses on Gradual Change

Once you begin conducting business in Japan, your business should consider the concept of kaizen in culture instantly. This is a desire to keep growing continuously.

Even though there are costs associated with an approach that constantly promotes creativity, the ability to enhance your corporate practices should make your involvement as good as possible.

  • World’s Third Largest Economy

Right behind the United States and China, Japan has the third-biggest economy globally and makes up about 6% of the total Gross Domestic Product. You can find that not only do you have access to a 127 million-strong audience, but there is also a foothold to build that can take you to the rest of Asia. 

If your choice is to build alliances rather than starting fresh, it is a competitive business sector that is open to foreign direct investment too.

  • Excellent Market for Product Testing

Since the Japanese community is wealthy and highly educated, doing business in the country will give you further opportunities for product testing than you can find almost everywhere in the world. Home spending rates in Japan are among the highest in the world today. 

Your consumers in many sectors are well-educated, meaning they realize the distinction between high-performance goods and low-cost ones.

  • Excellent Infrastructure

Japan wouldn’t have had the option of being a worldwide player if they didn’t have an exceptionally evolved foundation. With media transmission innovations, manufactured streets, interstates, processing plants, air terminals, and harbors, Japan has placed itself to be a global commercial center.

Disadvantages of Doing Business in Japan

  • Supply of Electricity

Tokyo Electric Power Company or Tepco provides power for the city and its surrounding areas if you choose. Regardless of the grid’s sheer immensity and the number of clients they serve, you need to schedule a construction date with the service company, in advance, to prevent delays in installing a meter which means you’ll have to make a request and wait for the meeting to attach.

On average, it takes about 100 days for Tepco to link a new business in Japan to the main power grid.

  • English is not Priority

While English is spoken more frequently in Japan today than in the past, speaking the language in the business community is not a primary concern. You will note that in certain cases, Japanese is the preferred language.

  • Efficient Contact is Indirect 

Intricacies are an integral part of the Japanese communications cycle. Clear demands are rewarded for gestures and nonverbal acts. When you find yourself at a dinner where only chopsticks are accessible, you shouldn’t ask for a fork, as Stuart Friedman states to Business Insider.

Showing you’re awkward using the chopsticks will build a visual cue that will pick up on your business associates and they’ll ask you if you want a fork. In what is unsaid, depending on the context, there’s more sense left than direct requests. If you do not want to make improvements to the way you live, then what does that say about your business approach?

  • You can Hear “No” Sometimes

Once you start doing business in Japan you’ll hear the word “No” in several different ways. This is seen as a method of preventing conflict, preserving peace, or saving face when there is some kind of discord. If anything looks tough to a potential client, you will get the result. Even the silence may be a sign that you don’t like what you sell. 

Some prospects that change the discussion, confirm they know what you’re saying or propose a different approach to the problem your product is trying to solve.

  • Miscommunication Stops Business Before it Starts

The word “sayonara” is one of the best examples of this problem. In the United States and Europe, this Japanese term is one of the few that the average person has any experience with. The only thing is that most people have no idea what this means.

This means that instead of you, your market prospects will be going to the competition. There is a distinction between “farewell” and “Goodbye,” which is why learning the Japanese language’s intricacies is such an important part of doing business in this region.

  • Crime is Organized

International companies know about the way that Japan is home to the biggest organized crime bunch on the planet which has a membership of around 30,500 individuals as of 2018. They are usually known as the Yakuza and they are famous for being associated with clubs, pachinko bars, human trafficking, drugs and that’s just the beginning. 

They are associated with many authentic organizations for the land, development, and money related issues that they have utilized as an escape for their illegal activities.

  • Natural Disasters

Natural disasters are a typical occurrence in Japan and the Japanese people are instructed early on the most proficient method to get ready for these catastrophic events however much could reasonably be expected. 

In any case, no measure of planning can turn away desperate outcomes when these events take awful turns, for example, the 1995 earthquake in Kobe, the earthquake along with a Tsunami in Fukushima and Tohoku area in 2011.

  • Long Working Hours

For some time now, long working hours have become typical in numerous Japanese organizations, particularly in the IT business. While ongoing work style changes have made working hours more suitable, there are organizations incapable of reducing working hours. 

International companies may feel disappointed with additional time, low pay rates, or for not having enough time for themselves.

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