Despite some recent economic and environmental challenges, Japan remains one of the world’s key economies and an important business destination for expats.
The efficiency and simplicity of business in Japan are demonstrated in the country's favourable rankings in several international surveys, including the World Bank's Ease of Doing Business Survey for 2020, where it ranked 29th out of 190 countries. Japan scored well in categories such as resolving insolvency (3rd) and dealing with construction permits (18th), but fell short in areas such as ease of starting a business (106th) and getting credit (94th).
The biggest drawbacks to doing business in Japan are the cumbersome and expensive tax regimens and the complexity involved in starting a business. In addition, Japanese culture and business practices contain many pitfalls for the uninformed businessperson. Understanding these will be key to success.
Japan is known for some of the longest working hours in the world, although the usual work week in Japan is from 8am to 5pm, Monday to Friday. By law, employees aren't supposed to work more than 40 hours a week, but most work significantly longer hours as it's seen as a sign of dedication to the workplace.
Japanese is the official language of business in Japan. English is not widely spoken and a translator will be required for most business meetings.
Formal business attire is expected. Dark suits are commonly worn.
Greetings are formal and usually involve a bow of the head and then a handshake. The most senior member of a delegation should be greeted first.
Gifts are not always expected, unless it's a small item branded by or representing one's company. The presentation of the gift is also important. Receiving a gift should be done using both hands.
Equality of men and women in the workplace is improving, but Japan is still well behind much of Europe and the US.
Business culture in Japan
To be successful in business in Japan, expats need to invest time getting to grips with the local business culture. There are many aspects of Japanese business etiquette that may seem odd to businesspeople from the West. However, it's important to embrace these nuances and engage appropriately with Japanese business associates if one wishes to be taken seriously within Japanese business circles.
Underlying Japanese business culture is the notion of 'kaizen' – the drive for constant improvement. This reflects in the hard work ethic, excellent customer service and never-ending quest to innovate and improve on business practices.
Formality and respect
When dealing with Japanese clients it's a good idea to be excessively formal in everything from conduct to dress code. There are specific unspoken rules of business etiquette governing most situations. When meeting hosts or business associates for the first time upon exchanging business cards, theirs should be received with both hands and an attitude of respect, as the card is taken to represent the individual. The delegation should be greeted in order of seniority, first bowing then offering handshakes.
Reflection and silence
Silence during meetings is not uncommon, even accompanied by closed eyes. While in the West this would signify the meeting is going rather badly, in Japan it indicates a period of reflection. Don't interrupt or feel the need to speak and fill the silence.
Expats doing business in Japan should note that it's important to be sincere and honest, but without being confrontational or too direct. Vague forms of expression are best used – there's an art to deflecting a difficult question to avoid embarrassment or disappointment.
Meetings often begin with excessive small talk as rapport is built and relationships are established. This phase mustn't be rushed. Note that decisions are seldom made in the actual meeting, where it's more usual to exchange information or confirm previously made decisions.
Socialising with colleagues
A calm, humble, introverted personality style is likely to be respected by the Japanese, while the brash extrovert is considered untrustworthy and offensive. There's an exception to this, though, and it starts once the meetings are over for the day and the evening's social activities commence. This is where the sombre, sober rules of engagement that govern the office culture can be suspended in favour of relaxed socialising. In fact, going drinking with a client and getting tipsy – or at least as tipsy as they are – may be considered a key part of solidifying the relationship and progressing the deal. Rest assured that nobody will speak of the evening’s more salacious events the next day once business etiquette is restored.
Dos and don’ts of business in Japan
Do get bilingual business cards printed with Japanese on one side
Don’t write on a Japanese business card, or wave it around or flick it
Do accept a business card with two hands and a small bow, and treat it with respect
Do use titles when greeting people
Do be on time, or if being late is unavoidable, apologise profusely and repeatedly
Don’t take any seat at a meeting, wait to be placed
Do make notes during meetings, but avoid using red ink