Why you should expand into Japan

Japan is a culturally rich and fascinating country, yet unless you understand its business culture and etiquette, doing business there can be hard.

Martial Meyssignac, Alpadis Group’s Managing Director in Japan, has been in the country for decades and has helped numerous multinational companies as well as entrepreneurs gain a foothold in Japan.

Martial manages Alpadis Group’s operations and guides companies in everything from setting up a company to payroll, employment law and accounting, among other services. Here, he talks about why he came to Japan (over three decades ago!), some of the challenges that foreign companies may have and insights into the unique ways of doing business.

Please tell us what you do at Alpadis Group and how long you have been in Japan

I am originally from France, though I have been based in Japan for 34 years. I came to Japan in 1988, at the time I was studying in the United States and came to Japan with my then girlfriend. To cut a long story short, she returned to the United States, and I remained in Japan!

I worked for the French Chamber of Commerce and then joined the consulting firm, PMC Partners, as a junior partner before becoming a full partner in 1996. At PMC Partners we worked with a number of international companies who needed business development and other services in Japan. Japan is an amazing country but very difficult for foreign firms to understand and be successful in, we were able to provide the kind of guidance and services that they would need.

We would focus on larger business development and sales projects for clients, but would also perform a number of corporate services, from help opening up subsidiaries to payroll, accounting, tax returns etc.

In early 2022 Alpadis Group and I co-founded Alpadis Japan, and I am currently the Managing Director of the company. We provide a full range of corporate services for clients in Japan. These include Company Formation, Accounting, Corporate Secretarial, Tax, HR and Payroll, Employer of Record and Regulatory Compliance among others.

Importantly, we have a multilingual team that are all based in Japan and understand the Japanese environment. Our accountants and experts are able to communicate in English, French as well as Japanese (all are Japanese native speakers) and this is pivotal for ensuring our international clients get what they want.

What kind of clients do you work with?

Our clients are foreign companies who have opened up or already have a subsidiary in Japan, or are about to set up an entity in Japan. What they require is a ‘Madoguchi’, Japanese for ‘counter’ or `ticket window’ but in this context means having one point of contact who can cover all their administrative needs in Japan. So, typically our client will be a big foreign company who needs all the administrative work done for them in Japan.

These companies could be based in Europe, the United States etc where the person overseeing the Japanese market would be based (usually it’s the CFO) and they would need someone they could trust and rely upon to conduct all administrative work. That ‘someone’ is us.

Please tell us a bit about Japan, for entrepreneurs and larger companies looking to move / expand there

What I would say is that our role is not to persuade anyone or any company to come and expand into Japan. As mentioned earlier, Japan is an amazing country which a huge amount of opportunity, but it is also challenging, with a unique culture. The kind of companies that we work with have already made up their minds about Japan and they have done this independently based on their own business considerations.

These reasons could be varied, they could already have a liaison office here but now need to set up a proper legal entity because business is doing so well. They may already sell products here but now need staff who can connect with the Japanese market better, there are many reasons. But once the decision has been made to come to Japan, they should contact us because we have the knowledge, expertise and experience to make their Japanese expansion as smooth as it can be.

How is Alpadis Japan different to other service providers?

We have a deliberate mix of Japanese and Western experts in our team. This is important because our clients are all foreign companies that need that local knowledge and ability to open doors and get things moving. However, my Western colleagues have lived and worked in Japan for decades and are able to communicate with our clients in Europe or the USA and be that bridge between East and West.

This is a very key point, the majority of clients who come to us after using other companies in Japan do so because there is too much of a cultural divide, they do not understand how the Japanese system works and the original Japanese service provider does not understand how they work. This causes friction and dissatisfaction. We very deliberately ensure we have that mix in our team.

But of course, no matter how well you communicate and understand your client, you need to get results and provide a high-quality service, and this is also where we excel. Client happiness is paramount, and it is something we focus on every day.

What are the key processes to set up a company in Japan?

I would say the process of establishing a company in Japan is relatively straightforward. They changed the law 14 years ago and made it much easier for foreigners to incorporate here, you don’t even need to be based in Japan and the process is more simplified.

However, the hard part is the process of opening a bank account. Apart from some investment banks, there are no international banks in Japan and so entrepreneurs and firms need to use one of the Japanese ones. These don’t have services in English, and it can be complicated and time-consuming to open even a basic bank account. We have heard of companies who could not enter Japan simply because they could not open a bank account.

In terms of location, while this does depend on the nature of the company itself, I would say that the best place is often Tokyo, Japan being a very centralised country, and in any case along the 600 kilometres line between Tokyo and Kobe where 70% of the Japanese population live.

For more information on setting up an entity in Japan, contact Alpadis Group