Doing business in Japan is notoriously difficult for foreigners due to the complexity of regulations and one of the world’s highest corporate tax rates.
However, the structural reform element of “Abenomics,” an economic revitalization plan championed by Prime Minister Shinzo Abe, has opened a door for Taiwanese firms to start businesses in Japan.
A vanguard of the potentially more open Japan is the western city Fukuoka, which has taken its own measures to invite startups. Its mayor Soichiro Takashima has particularly noticed Taiwan’s growth of new companies.
Takashima visited Taiwan on July 21-22 to attend IDEAS Show, Taiwan's largest Internet startup event, and to host the startup pitch competition “Fukuoka Night” encouraging Taiwanese entrepreneurs to open businesses in his city. The Small and Medium Enterprise Administration under Taiwan’s Ministry of Economic Affairs organized the event.
Taiwan Startup SkyREC won the pitch competition and with it a startup visa, corporate tax reduction and a year’s free office rental.
SkyREC does video analytics and data visualization for offline retailers. It plans now to cooperate with stores in Fukuoka from this year.
Takashima also offered Taiwanese startups Golface, Toii, Installments and ThinkTank free round-trip airline tickets to Fukuoka for an event called “Fukuoka Startup Collection” scheduled for November.
PERKS OF LOCATING IN FUKUOKA
Fukuoka prides itself on its connections to 23 domestic and 18 overseas cities, being close to East Asian cities such as Busan, Seoul, Shanghai and Beijing, ideal for logistics.
Just over two years ago Fukuoka also became part of Abenomics and was selected as one National Strategic Special Zone Initiative to attract foreign direct investment.
According to the Fukuoka government, the city has ranked first in its level of openness to new businesses for the past two years and its population growth rate in 2015 was among the highest in Japan. The city offers startups visas, financial aid for office rent and a corporate tax reduction.
Japan’s normal corporate tax rate is 30 percent. To attract foreign talent, the mayor says Fukuoka has cut the tax for startups, reducing income by 20 percent for five years following the founding of the business.
Foreign entrepreneurs can use their startup visas to open a business without some of the current requirements including capital of at least US$50,000, two full-time staff members and an office. The city government also provides loans up to US$200,000 for the startups that win competitions.
Fukuoka City also provides individual support through the “Startup café,” an initiative with support from government to organize events that invite lawyers and accountants to give free business advice. Sixty companies are participating in the startup café.
Asked about why he visited Taiwan, Takashima said he was impressed with Taiwanese startups because three of the five that made final pitches in Slush Asia 2016 were from Taiwan. That was one of the largest international startup events in Japan and took place near Tokyo in May.
He hopes to promote the business of these new firms in Fukuoka as well as their exchanges with local startups.
The mayor has also spoken with startups in Germany and Finland about opening businesses in Fukuoka, and the city is working with a startup incubator and accelerator in the Silicon Valley to learn more about the American high-tech center.