#TrendingInJapan

#TRENDINGINJAPAN
Annette Azuma Staples Rodway Introduction
Dr Sato JETRO Greeting
Craig Armstrong NZTE Overview and market trends
Mr Hayashi JETRO
Business opportunities for
New Zealand Companies
Ms Sunaga MBC
Making a success of setting up
a new business in Japan
Simon Watson NZ Hot House Our Export Journey
Eddie Grooten Dad’s Pies Road to Japan
Q & A

MARKET OVERVIEW AND
CONSUMER TRENDS
CRAIG ARMSTRONG - NZTE

MARKET OVERVIEW
 Japan is the world's third largest economy
 High investment in research and
development
 Japan is New Zealand's fourth largest
export market
 Japan's Gross Domestic Product (GDP) is
NZ$5.289 trillion,

 Japan is New Zealand's fifth largest
trading partner (bilateral trade was worth
6.95 billion in 2014).
 New Zealand has been pursuing the goal
of a free trade agreement with Japan

CONSUMER TRENDS IN THE
MARKETPLACE …
 Consumer behaviour:
– hunting for value and time
– social media
– spending to increase quality of life
– green influences

 Societal:
– declining the birth rate and aging society
– single households
– SMEs
– women in work

 Product development :
– packaging
– single serve
– endorsements
– sustainability

OPPORTUNITIES FOR NEW ZEALAND
BUSINESSES
 Food and Beverage
 Healthcare
 Renewable Energy
 Software, Electronics, and Engineering

BUSINESS OPPORTUNITIES FOR
NEW ZEALAND COMPANIES
MICHIRO HAYASHI - MANAGING DIRECTOR
OF JETRO AUCKLAND

Copyright (C) 2016 JETRO. All rights reserved.
JETRO: Japan External Trade Organisation
• Government-related organisation to promote mutual trade and
investment between Japan and the rest of the world
• Established in 1958
• 73 offices worldwide, 39 domestic offices
What is JETRO?
Main Activities:
1. Promoting foreign direct investment
into Japan
2. Supporting the overseas business of
Japanese firms
3. Facilitating economic growth in
developing countries through trade
promotion

1. Japan – the ideal business opportunity
2. Why you should set up your business in Japan
3. Successful Case Studies
4. Talk to JETRO First

Four allures of Japan as an investment destination
Sophisticated
Market
Innovation
Hub
Business
Friendly
Infrastructure
Comfortable
Living

“Outline of Belgium” from JETRO website
Hokkaido/Tohoku region 591.9
Sweden 579.5
Chubu region 779.8
Switzerland 685.4
Kinki region 792.6
Switzerland 685.4
Chugoku region 279.5
Finland 268.2
Kyushu region 476.8
Austria 428.3
Shikoku region 135.9
Hungary 133.4
Kanto region
2,018.2
Russia
2,096.8
Source; “Annual Report on Prefectural Accounts for FY 2013” issued in FY 2016, Cabinet
Office
(Unit: $ 1 billion)
・
International comparison of regional GDP in Japan
(nominal, FY2013)

4.25
3.64
3.37
3.01
2.55
2.19
2.01
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
Total Milion $NZD (right)
NZD/kg
New Zealand's Export of Kiwifruit
between 2011 and 2015
Source: Statistics New Zealand

Innovation Hub
Source: Created from Ministry of Internal Affairs and Communication, “Survey Result on Science and Technology Research 2015 ”
Date source: OECD “Main Science and Technology Indicators, ” etc.
Rank Country
Percentage
of GDP (%)
1 Japan 3.87
2 Germany 2.85
3 U.S. 2.73
4 France 2.23
5 UK 1.63
Rank Country
Number of
researchers per
10,000 people
1 Japan 53.8
2 Canada 45.0
3 Germany 43.9
4 UK 40.5
5 U.S. 40.3
Research funding percentage of GDP
(G8 comparison)
Number of researchers per 10,000 people
(G8 comparison)
Science and technology related research is conducted spiritedly in Japan.
“Research funding as a percentage of GDP” and “Number of researchers per
10,000 people” are among the largest in the world.
6th - Canada(1.62%), 7th - Italy (1.26%),
8th - Russia (1.12%)
6th - France(40.2), 7th - Russia (30.8),
8th - Italy (19.5)

Business Friendly Infrastructure
Source: World Economic Forum, “The Global Competitiveness Report 2015-2016”
Source: Ministry of Economy, Trade, and Industry(METI), “Survey on Attitudes of
Foreign Companies toward Direct Investment in Japan Report 2014”
Easy environment for business
Foreign companies validate Japan’s infrastructure
2ndIn the world
(144 countries)1stIn Asia

Excellent Japanese transport spreading throughout
Japan
Nearly 100 airports
operate nationwide

Comfortable Living
RANK
Source: MONOCLE, UK (2016)
1. Tokyo
2. Berlin
3. Vienna
4. Copenhagen
5. Munich
6. Melbourne
7.Fukuoka
8. Sydney
9.Kyoto
：
：
24.Portland
Most livable Japanese cities as chosen by the world

Rank 2013 Survey 2015 Survey
1 High business costs Complicated business systems
and structures
2 Particularities of Japanese
market
Difficulty in finding human
resources
3 Difficulty in communicating
in non-Japanese languages
Difficulty in communicating in
non-Japanese languages
(in business)
4 Complicated business
systems and structures
Particularities of Japanese
market
5 Difficulty in finding human
resources
High business costs
Obstacles in doing business: Comparison

Japan’s Business Cost
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000
0 20 40 60 80 100 120 140 160 180
(USD)
(USD)
Source : JETRO
Source : JETRO
Office rent (monthly/per sq.m)
Housing rent for expatriates (monthly)
Tokyo
Tokyo
Mumbai
Seoul
Paris
New York
Singapore
London
Hong Kong
Seoul
Paris
New York
Hong Kong
Mumbai
London
Singapore

Reduction of the
corporate tax rate
Down to the
20% range
from this April

Structural Reform
Opening up
the
electricity
market
TPP with
broad
agreements
Regulatory
reform of
medicine and
medical
equipment

Three reasons to Invest in Japan
1. Establish yourself as a local
2. Better relationship with your business partners
and consumers
3. Market engagement
To take your business to the next level
establish your business in Japan
2. Why you should set up your business in Japan

Michael Limbrick, a Manager of New Zealand
Bloom’s Auckland office:
“Setting up in Japan was reasonably easy,
JETRO’s bureaucracy was efficient.”

The Tokyo Business Establishment Center assists
with:
Corporate registration, taxes, pension, social
insurance and immigration control
4. Talk to JETRO first

MAKING A SUCCESS OF SETTING
UP A NEW BUSINESS IN JAPAN
MBC – MS SUNAGA
Akemi Sunaga, Certified Public Accountant
Sunaga CPA Firm
Marunouchi Business Consulting Tax Co.
Marunouchi Business Consulting Ltd.

CONTENTS
Ⅰ. Characteristics of the Japanese Market
Ⅱ. Points to Consider when Advancing into Japan
Ⅲ. Types of Operations in Japan

Ⅰ. CHARACTERISTICS OF THE
JAPANESE MARKET
1. Personal connections.
2. Difference in communication styles.
3. Inspection standards.
4. Competition
5. Distribution system

Ⅰ. CHARACTERISTICS OF THE
JAPANESE MARKET
My advice
1. Listen closely to your customer.
2. Ensure timely supply and delivery.
3. Need a good interpreter.

Ⅱ. POINTS TO CONSIDER
WHEN ADVANCING INTO JAPAN
1. Do market research.
2. Check if you need a license.
ex) food sales; restaurant or café operation; sales of cosmetics,
pharmaceuticals, or quasi-drugs; sales of alcoholic beverages;
staffing services; real estate brokering; construction; …etc.
3. Decide on a business structure -
subsidiary company, branch office,
representative office

4. Decide on an office location.
5. Taxation, the social insurance system,
business licensing etc.
Ⅱ. POINTS TO CONSIDER
WHEN ADVANCING INTO JAPAN

Ⅲ. TYPES OF OPERATIONS IN JAPAN
1. Types of Operations
1) Subsidiary company
2) Branch office
3) Representative office

(1) Subsidiary company
Merits:
 Smooth business by an entity as a joint-stock
corporation.
 Business credibility –publicly available
documents.
 The legal disputes of a corporate entity
registered in Japan remain in Japan.

(1) Subsidiary company
Demerits:
 You need an initial capital contribution.
At least NZ$68,000 (5mil) to obtain an investor/business
manager licence.
 Register entity costs about NZ$4,500 (330,000)
includes: Registration tax NZ$2,000 (150,000) or 7/1000s of initial
capitalization(greater one), articles of incorporation attestation fee
of NZ$680 (50,000), revenue stamp for those articles of NZ$550
40,000 and a handling fee for the judicial scrivener.

(2) Branch office
Merits:
 Business credibility - The legal presence is
attested to by publicly available documents.
– This approach can be particularly useful when
the foreign legal entity
– that is, the home-country headquarters – has
much credibility of its own.

(2) Branch office
Demerits:
 Office registration cost of about NZ$3,200 (230,000)
includes: Registration tax NZ$1,200 (90,000) and a handling fee for the
judicial scrivener.
 Legal consideration as a part of the headquarters company.
Tax bill is calculated with reference to the capitalization of the home
company.
It could get pretty heavy, if the home company has a large amount of
capital.
 To extend the legal disputes to the headquarters company.

(3) Branch office
Merits:
 No registration, No registration fees.
Demerits:
 Not supposed to serve as base for business operation.
 Little business credibility– No attestation as a legal existence.
 It can be difficult to secure a working visa for a non-Japanese
employee.
 A representative office cannot open a corporate bank account.

2. Choosing the best type for you
 Depends on
 Objective of the advance
 Circumstances of the company behind it
E.g.
 First attempt at doing business in Japan
 Your company is very well known and has a long and
distinguished history
 Your company is very big, with a home-country capitalization in
the NZ$10M

≪FOR YOUR INFORMATION≫
WHERE TO TURN FOR GOOD, PRACTICAL ADVICE
1. Tokyo One-Stop Business Establishment Centre
Company registration, notification of incorporation, taxes, social security, immigration,
meeting the needs of companies, interpretation and translation services, etc.
2. Business Development Centre TOKYO
One-stop consultation desk
3. Special Zone for Asian Headquarters
Offering a menu of deregulations, tax incentives, and financial support
Merits of locating within this zone:
The tax incentives, subsidies, free consultation services, low-interest loans, office introductory
service

≪FOR YOUR INFORMATION≫
BUSINESS OPPORTUNITIES IN TOKYO
Economic powerhouse
GMP (Gross Metropolitan Product) is comparable to the
GDP (Gross Domestic Product) of Mexico or South Korea
 Land : 2,000km2 (0.5% of the land area of Japan)
 Population : 13mill (10% of Japan’s population)
 2020 Olympics / Paralympics
Ripple effect of NZ$23bn (1,670bn) in Tokyo alone and NZ$40bn
(3,000bn) on a nationwide level.

ABOUT US
Marunouchi Business Consulting Group
Sunaga CPA Firm
Marunouchi Business Consulting Tax Co.
Marunouchi Business Consulting Ltd.
Marunouchi M&A Center
Tax
Services
Assurance
Services
Accounting and
Payroll Related
Outsourcing
Services
Advisory
Services
Kishimoto Building 5F, 2-2-1, Marunouchi,
Chiyoda-ku,Tokyo,100-0005 Japan
Tel.+81-3-5288-8835 Fax.+81-3-5288-8836
http://www.maru-biz.jp / Email:ami@sunagacpa.jp
Our Services

OUR EXPORT JOURNEY
SIMON WATSON - NZ HOT HOUSE

ROAD TO JAPAN
EDDIE GROOTEN – DAD’S PIES

How we started
• MAD International – 4 years ago
- Pallet-sized Orders
- Future Plans with Grant Humphries
- Commitment of both companies
- Capex Investment
- Issue of hedging
- Choosing the right partners to support each other in
fluctuating markets

NZTE Advice
- Relationship Building & Strategy
- Importance of meeting key decision
makers
- Due Diligence (true opportunity?)
- IGF Funding
- Business Outcome
- Adding Value to Primary Industry
- Importance of local Japanese
speaking salespeople

Niche Product
• USP
- Product & Packaging
Development
- Nutrition Specifications
- Weight Variance (5%)
- Customs Declaration
• Japan: Population of
127 million
(28 x the population of NZ)

Challenges to satisfy
Japanese Market
• Presentation Expectations
• E Numbers
• Supply of Raw Ingredients
(Japan App.)
• Tariffs & Exchange Rates
• Freight Costs
• Lead Time
• Size of Market
• Pricing

Customers
• Costco
• Peacock
• Mini Stock
• Co-op
• Mitsubishi

Risk Management &
Export License

Results
• Hard Work
• Investment
• Learning Curve
• Travel Time
• Customers Gained
• Compliance & Verification
• Not many Japanese companies comply
• International Trademark of Registration

In the media
How they make it: Dad's Pies on growth
path as Japan develops appetite for pie

Q & A
ANNETTE AZUMA – STAPLES RODWAY

#TrendingInJapan

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