Japan

Business Environment

Business practices

For further information: Japanese business culture on the Communicaid website
For further information: Japanese culture and customs as seen by the Kwintessential website
For further information: Japanese business culture as seen by the Kwintessential website
For further information: Japanese business culture on the Executiveplanet website
Closed hours and days: Offices are closed on Saturday and Sunday.

Public holidays

New Year	1st January
Coming of Age Day	8th January
Foundation of the Nation Day	Beginning-mid February, changes according to the year
Spring Equinox	End of March, changes according to the year
Showa Day	End of April, beginning of May, changes according to the year
Constitution Day	Beginning of May, changes according to the year
Greenery Day	Beginning of May, changes according to the year
Homage to the Sea	16th July
Respect for Elderly People Day	17th September
Autumn Equinox	End of September, changes according to the year
Sport Day	8th October
Culture Day	Beginning of November, changes according to the year
Work Recognition Day	End of November, changes according to the year
The Emperor’s Birthday	End of December, changes according to the year

Compensation day: When a public holiday falls on a Saturday, companies close on the following Monday to compensate.

Periods when companies usually close

New Year	1 week around New Year
Golden week	1 week from the end of April to the beginning of May
O-Bon festival	1 week mid August

Standards

National standards organizations: The Japanese Industrial Standards Committee (JISC) depending on the METI (the Ministry of economy, trade and industry)
The Japanese Agricultural Standards (JAS)
Integration in the international standards network: The JISC is a member of:
- The International Standard organization (ISO);
- The International Electrotechnical Commission (IEC);
- The APEC/SCSC, Sub Committee of Standards and Conformance of the Asia Pacific Economic Cooperation;
- The ASEM/TFAP/SCA, Trade Facilitation Action Plan/Standards and Conformity Assessment of the Asia-European meeting;
- The Pacific Area Standards Congress.
Classification of standards: JIS + 1 letter showing the technical area + 4-digit number showing the rank in the JIS division.
Online consultation of standards: The publication of standards is entrusted to the JSA (Japanese Standards Association) which is the “publishing house” of the JISC. The JSA website gives access to the JISC standards.
Certification organizations: The list of certification organizations provided by the Japan Accreditation System for Product Certification Bodies (JASC)
The database of certification organizations provided by the Japan Accreditation Board for Conformity Assessment (JAB)
The certification organizations proposed by the International Accreditation Japan (IA Japan)

Legal framework

Independence of justice: Yes
Equal treatment of nationals and foreigners: In the texts justice ensures non-discriminatory treatment of all cases. But in practice, not being able to speak Japanese can lead to a lack of equity.
The language of justice: Japanese only
Having recourse to an interpreter: No guidelines exist to ensure effective communication between judges, lawyers, and non Japanese-speaking defendants. No standard licensing or qualification system exists for court interpreters, and trials proceed even if no translation or interpretation is provided for the accused.
Sources of the law and legal similarities: The system is modeled on European systems with Anglo-American influences.
Consulting national laws online: Lexadin, the world law guide
Japanlaw

Intellectual Property

National organizations: Japan Patent Organisation (JPO)
Japan Patent Information Organization (JAPIO)
Regional organizations: Intellectual Property Rights Experts Group (IPEG), intellectual property resource of each member economy of the APEC community
International membership: Member of the WIPO
Signatory to the Paris Convention
Membership to TRIPS

National regulation and international agreements

Type of property	Law	Validity	International agreements signed
Patent	Patent Law, 1999	20 years renewable	Patent Cooperation Treaty Strasbourg agreement concerning the International Patent Classification
Trademark	Trademarks Law 1997 The Unfair Competition Prevention Law, which is enforced by the METI, provides additional trademark protection.	10 years renewable every 10 years	Trademark law treaty Nice agreement concerning the International classification of goods and Services for the Purposes of the registration of Marks Protocol relating to the Madrid Agreement concerning the International Registration of Marks
Design	Design Law 1997	15 years
Copyright	Copyright Law 2006		Berne convention for the protection of Literary and Artistic Works Convention for the Protection of Producers of Phonograms against unauthorized duplication of their phonograms Rome convention for the protection of performers, producers of phonograms and Broadcasting organizations WIPO copyright treaty WIPO performances and Phonograms treaty
Industrial Models	Utility Model Law 1997	10 years

Tax rates

Consumption taxes

Nature of the tax: Consumption tax
Tax rate: National consumption tax : 4%
Calculated on the total amount of sales (excluding sales not subject to tax) and once the total amount of purchases subject to tax has been deducted.

Local consumption tax : 1%
Calculated on the total amount of consumption tax due.
Reduced tax rate: None
Other consumption taxes: Other consumption taxes are levied at the national level and the local level: liquor tax, tobacco tax, gasoline tax, aviation fuel tax, liquefied petroleum gas tax, petroleum tax, motor vehicle tax, etc.

Corporate taxes

Tax rate

Corporation tax	:	30% of the profit for companies of more than 100 million JPY
Local taxes	:	Corporation inhabitants tax and corporation enterprise tax vary according to the locality
Effective taxation	:	41% all inclusive (46% in the Tokyo metropolitan region)

Tax rate for foreign companies

Resident companies are taxed on their worldwide income; non-resident companies are taxed only on Japanese-source income. A company that has its principal or main office in Japan is considered to be resident.

Capital gains taxation

Taxed at the corporate tax rate.
Capital gains tax on land transfers is subject to a specific method of calculation.

Main allowable deductions and tax credit

Bad debt, repairs, natural disasters, charitable donation, R&D expenses, etc.

Other corporate taxes

Stamp tax, registration and license tax.

Individual taxes

Tax rate

Personal tax rate	:	Up to 40% (2007 scale) Click here to visualize the method of calculation.
Local taxes	:	Individual inhabitants tax and individual enterprise tax Vary according to the locality
Effective taxation	:	Up to 50%

Allowable deductions and tax credit

Dependent spouse, young children, disabled and elderly dependents, social insurance, etc.

Special expatriate tax regime

No special expatriate tax regime in Japan.

Double taxation treaties

Countries with whom a double taxation treaty have been signed: Double Taxation Agreements : List of Countries; Japanese Tax Treaties
Whithholding taxes
Bilateral agreement