Q&A: Satoru Endo, GT Japan

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MEI talks about business opportunities in Japan and 2019 IRB Rugby World Cup legacies with Satoru Endo, managing partner, GT Japan.

Please outline your role and responsibilities at Grant ThorntonI am the managing partner of Grant Thornton Japan and at the same time a senior partner of audit practice. What services does Grant Thornton offer in Japan? GT Japan provides clients with high quality services in audit, tax, advisory services and other business support like outsourcing, general management consulting, information technology, etc. Due to legal constraints, these services are provided by separate company groups; Grant Thornton Taiyo ASG LLC (audit), Grant Thornton Taiyo ASG Tax Corporation, Grant Thornton Taiyo ASG Inc. , Taiyo ASG Advisory Services Co. , Ltd. and Grant Thornton Masters Trust Inc. What does Japan have to offer UK–based or other overseas investors? Currently, the worlds eyes are on Asia. Japan is full of business opportunities due to its strong ties with this rapidly developing region. In Asia, Japan is (1) the best country to create innovation and (2) a country with the best business and living environments in terms of safety, medical services, etc. As well as being one of the worlds largest economies, Japan is attracting attention as (3) a country with soft power, which sets trends for fashions and entertainment content in Asia. Japan offers foreign companies these three windows of opportunity: (1) Innovation Hub, (2) Business Platform and (3) Trendsetter. What sectors are doing well at the moment in the country? Theres been decline in almost all business sectors last year due to the earthquake and tsunami of 11th March 2011, flood in Thailand and rapid rise of the yen. However, these impacts are easing and demand being restored, with improvements in some sectors from this year. A brief overview from Teikoku Data Bank by industry is as follows:– Real Estate – Improved for the first time in three months because capital investments increased through reconstruction demand, individuals motivation to acquire real estate recovered in some metropolitan areas, and the demand for leases began to move. – Retail – Improved for the second consecutive month with relatively strong daily necessities, as well as good sales of winter clothing and automobiles. – Construction – Improved for nine consecutive months thanks to a growing reconstruction demand primarily in disaster–stricken areas. However, recovery in western Japan is delayed, which resulted in a slight improvement as a whole. – Manufacturing – Fell for the third consecutive month. Although from the effects of flood damage, domestic alternative production became a factor raising the economic level, foreign demand was on a weak note due to factors including a downturn in the Chinese economy and the economic slump in Europe. In addition, the persistent appreciation of the yen continued to make the earnings environment severe for export companies. What is the current business climate? Has the current global recession hit Japan hard? The nations real gross domestic product rose 0. 8% from the previous month in December, the first gain in three months, according to data released on 1 February 2012 by the Japan Centre for Economic Research. However, reconstruction demand was too limited to raise the economic level; weak foreign demand caused by current global recession as well as the prolonged appreciation of the yen depressed production activities, and the domestic economy also was not resilient enough to raise the overall economic level. While both domestic and foreign demands are weakish, the domestic economy continues to level off. How should a UK–based or overseas company best approach targeting opportunities in Japan? (Finding local partners versus setting up their own office etc)Like the EU and US there is little regulation in Japan when investors in foreign countries approach the Japanese market. Therefore, these investors have multiple routes to market such as business alliance, JV establishment, setting up a branch or subsidiary. It depends on the investors decision making which to choose the best way of their strategy, and professional advice should always be sought. Are there are any nuances in Japanese business practice that our readers would do well to be aware of? According to a recent survey about dissatisfactions when doing business in Japan by foreign companies which are already in Japan, comments include high operation costs, complex business procedures, severe competition, as well as unique business practice and communication difficulty, both of which result from the cultural and language gap. For example, decision–making takes time because of a long consensus–building process – Japanese people have a natural tendency to say, Ill think about it€ยช. What do you think the 2019 Rugby World Cup will do for the country? It is difficult to predict what will happen in seven years given the current population decrease, budget deficit or other problems. However, the 2011 RWC in New Zealand brought about positive economic effects and the economic effects of 2015 UK/2019 Japan can be also estimated. I think these international events contribute not only to Japanese sport development but also to the economy. Furthermore, foreign countries can understand our country better. The 2019 RWC will bring further growth in Japanese economy if it recovers, and it will trigger a recovery if the recession continues. About GT Japan:If you have any queries on doing business in Japan, please contact:Mitsuhiro NishidaInternational Business Centre Director, Tokyo E: mitsuhiro. nishida@jp. gt. comMakio WadaDirector, Japan Desk, LondonE: makio. wada@uk. gt. com

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