Interview with iadvisor Hiroyuki Inagaki: Business Set-Up in Japan

iadvisor Hiroyuki Inagaki; Partner of Nanohana Law Office, shares on the opportunities available and tips for Singapore companies when setting up in Japan.

What are some of the relatively untapped sectors that are suitable for Singapore companies in Japan?

Generally, high-tech sectors involving Research and Development (R&D) would be suitable for foreign companies in Japan. Japanese medical organizations are increasingly seeking cutting-edge and regenerative medical techniques, so there is an opportunity in this area. Click here.

Japanese businesses are also developing environmental technologies. For example, the recycling of sewage water; which is prominent in Singapore, would be increasingly important for Japan too.

The financial sector would be another viable sector for Singapore companies, as Japanese banks have been damaged by the financial crisis, and are not providing sufficient loans to businesses these days.

The Japanese government has also been focusing on the tourism sector and established the Japan Tourism Agency (Click here. ). Singaporean companies mostly have excellent tourism knowledge to successfully attract tourists, so businesses related to tourism would be quite suitable for the Japanese market.

What are some of the larger costs of setting up a business in Japan?

This would depend very much on the nature of the business. But generally, types of costs incurred by companies are as follows,

(1) Set Up of Operations
A Limited Company, also known as ‘Kabushiki Kaisha’ is the most popular form of entity in Japan. A typical set up would cost around US$5,000 (S$6,8801), inclusive of an agent fee.

(2) Office Rental
Companies would be required to pay key money (security deposit), broker fee, utilities as well as rent. Key money is usually equivalent to 5 or 6 months’ rent and the broker fee is usually equivalent to 1 month’s rent.

(3) Labour Cost
Besides the staff salaries, companies would have to pay labour insurance fees and social insurance fees.

What tips can you provide to Singapore companies planning to venture into Japan?

Incentives are available for foreign companies setting up in Japan. For example, in Osaka, overseas companies expanding to Japan can obtain them through the Osaka Business and Investment Centre (O-BIC).

O-BIC’s website: Click here.
Information on incentives: Click here.

Singapore companies can also contact Jetro through the Jetro Singapore Centre. Jetro provides many types of support to foreign companies expanding into Japan such as office locating, business matching services, etc.

For more information on business set up in Japan, please refer to Jetro’s ‘How to set up business in Japan’. here.


1. US$1 = S$1.38, exchange rate as of April 2010, Yahoo! Finance

All answers are provided to the best knowledge of the iadvisors at the point of answering, and are solely represented by the iadvisors, not IE Singapore.

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