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Starting a Business in Japan

ManagementJuly 06, 2023 10:00

Are you looking to expand your business overseas? The Land of the Rising Sun may be your best bet! Japan is synonymous with quality and innovation—it is commonly believed that if you manage to succeed in Japan, you can succeed elsewhere. Your success signifies that the goods and services you offer have satisfied the expectations of the highly discerning Japanese market.

Why Japan is a Great Place to Set Up Your Business

As the third largest economy in the world, Japan is a global leader in manufacturing, retail, and services. Foreign trade accounts for 37% of Japan’s GDP, which is a total of US$4.94 trillion. According to the IMD World Competitiveness Yearbook 2022, the top five key attractiveness factors of Japan’s economy are as follows:

Reliable infrastructure
High educational levels
Policy stability and predictability
Skilled workforce
Access to financing.

It is not surprising that reliable infrastructure tops the list—the world-famous Shinkansen (bullet train) network comes to mind. Connecting Tokyo to other commercial hubs such as Osaka and Nagoya, the Shinkansen still remains the gold standard for high-speed rail travel.

Furthermore, the workforce in Japan is not only highly skilled but also extremely dedicated. Japanese employees are known for their strong work ethic—they have no issues working much longer hours than contractually obliged to.

Government Grants You Can Tap On

If your company is a local SME, you can qualify for the Market Readiness Assistance (MRA) Grant from Enterprise Singapore. Do take note that on top of having at least 30% local shareholding, your company cannot employ more than 20 employees or have a group annual sales turnover above S$100 million.

The MRA Grant is meant to help SMEs expand into new markets overseas. Under the MRA Grant, the Singapore government will defray up to 50% of eligible costs—capped at S$100,000 per company per new market. Supported activities fall under three main categories:

Overseas Market Promotion (capped at S$20,000)
Overseas Business Development (capped at S$50,000)
Overseas Market Set-up (capped at S$30,000).

When you have compiled all relevant documentation, you can submit your application on the Business Grants Portal via CorpPass. It typically takes Enterprise Singapore up to 12 weeks to process each application. Your company will receive a Letter of Offer once your grant has been approved.

Other Support You May Need

Despite Japan being an attractive market to do business in, the barriers to entry are undeniably high. First of all, Japanese is the official language of business in Japan. If you’re not proficient in the Japanese language, you have to rely heavily on professional translators during business meetings.

Moreover, every company incorporated in Japan is mandated to participate in its highly complex social insurance and labour insurance system. This includes health insurance, workers’ accident compensation insurance and employees’ pension insurance. Therefore, in order to successfully overcome these challenges, you’ll require meticulous planning, guidance from local experts and targeted market analysis. This is where our Expert Services team comes in.

With a sound track record of 11 years, Brainsight can connect you with the leading industry and subject-matter experts. You need not worry about navigating the Japanese regulatory frameworks on your own; we will help you to penetrate the Japanese market with ease.

Beyond the preliminary stages of conducting market research and setting up your business, we can also help you to recruit top talent. Partner with us to build your winning team!