Working in Japan
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Find out how to get a job and work in Japan
Working in Japan can be a great, albeit challenging experience for expats. Local customs in particular and the prevailing bureaucracy can be overwhelming. No worries, though: With our help you will feel right at home in Japan’s business world.
Employment in Japan
Working in Japan may still conjure up images of suit-clad sararīman (white-collar business employees), pressing themselves into Tokyo’s underground during rush hour. However, today the employment market has changed for much of the local population and expatriates moving to Japan.
The Effect of “Abenomics”: The Japanese Economy Today
The Japanese economy has been suppressed since its real estate and stock market bubble burst in the 1990s, resulting in the so-called “Lost Decade”. The GDP plummeted and growth stagnated. By 2005, the economy was showing strong signs of recovery, but following the global financial crash of 2008/2009 and the Great East Japan earthquake of 2011, Japan’s economy was further weakened.
While the economy is slowly growing again, working in Japan means working in a country struggling with problems such as slow economic growth, a decline of the manufacturing sector, low productivity, rising public debt, and an ageing population. By 2025, two employees might have to support one retiree.
The 2011 Fukushima disaster and its aftermath have had an additional impact on the country’s economy. Although GDP started to rebound in the third quarter of 2011, the nuclear catastrophe led to even higher government debt, as well as problems in the energy sector.
In the years immediately following the disaster, all 50 of Japan’s nuclear power plants closed their doors. In 2015 Prime Minister Shinzō Abe oversaw the reopening of two plants, but the industry is still suffering, and Japan has turned to oil instead of nuclear power once more.
Following his reelection, Prime Minister Abe introduced his new economic measures designed to stimulate the stagnant economy. Dubbed “Abenomics”, the approach has led to some success, with an increase in spending on luxury goods and a weakening of the yen being attributed to the policy. However, the measures are highly experimental and Japan is yet to return to the financial strength it enjoyed in the 1980s.
2020 will see Tokyo host the Olympic Games. The added tourism from the event should give the area an economic boost with predictions of an extra 1.67 trillion JPY being generated in the capital. It’s thought that around 152,000 extra jobs will be created in Japan as a result of the games and international trade will enjoy a bump following the global attention.
Getting the Right Kind of Visa
Any foreign nationals who will be working in Japan (i.e. who are not traveling here for a business trip, to engage in negotiations, etc.) have to apply for a special work visa. For this purpose, they need to obtain a so-called Certificate of Eligibility from the immigration office.
As soon as you have an offer of employment for Japan, an HR staff member of your Japanese employer should submit the application on your behalf. The procedure takes up to three months and needs to be handled before the actual visa application. Without the proper visa, you should never take up paid employment in Japan.
For further information on alien registration and different types of visas also have a look at our articles Moving to Japan and Living in Japan.
Japan’s Key Industries
Due to the lack of arable land, there have never been very many opportunities for those working in Japan’s agricultural sector. Except for rice cultivation and fishing, agriculture is rather negligible.
The manufacturing sector is both advanced and diversified. Japan exports various industrial ingredients and high-tech products, especially to East Asian countries and the US. This has traditionally been a source of pride to the many laborers working in Japan’s post-war manufacturing industries. However, this sector is suffering from fierce competition from emerging markets and general globalization in the Asia-Pacific region.
Above all, working in Japan is characterized by its status as a service economy. About 70% of the workforce are employed in service-related industries, from banking and finance over real estate and insurance to retail and telecommunications.
Expats Wanted: What You Need to Move to Japan
You should bring necessary qualifications, hard skills, and experience for specialist positions. Many expats in Japan hold a diplomatic post, have a career as a foreign correspondent, or are sent abroad as part of an intra-company transfer.
Skilled expatriates may be hired as experts in the automotive sector, environmental or medical technology, B2B salespersons for industrial products, technical translators, or in the teaching profession. Other traditional fields of employment for qualified staff, like IT or electronics, are currently on somewhat shaky ground, but they might still be worth a try.
Finding Your New Job in Japan
It can be helpful to begin your career in Japan by applying to the local overseas branch of a sōgōshōsha (Japan’s large trading companies) in your home country. If you’d like to start working in Japan, you should not underestimate the importance of a local business network.
Your contacts may help you by letting you know about vacancies that haven’t been openly advertised or by recommending prospective employers. Last but not least, a solid grasp of business Japanese is an invaluable asset for working in Japan.
Certain professions, such as medicine, require proof of your Japanese language skills in the form of a Japanese Language Proficiency Test. The qualification examines reading, writing vocabulary and grammar skills. A positive result in the test can be highly beneficial for those trying to enter the country as a Highly Skilled Professional through Japan’s points-based immigration system, as it can be worth an extra 15 points in your application. The tests are held twice a year within and outside of Japan, and more information can be found on the JLPT website.
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Healthcare and Social Security in Japan
As an essential part of social security in Japan, there is a public healthcare policy for all Japanese citizens and foreigners who will be staying in Japan for more than 3 months. Instead of subscribing to the National Health Insurance (NHI) scheme, employees often enroll in a company health insurance plan (kenko hoken) via their employer (so-called Social/Employees Health Insurance). Their monthly contributions to medical insurance are deducted directly from their paycheck. You can find out more information about National Health Insurance for foreigners in Japan from the United State’s Social Security Administration.
If you are a self-employed person working in Japan, you need to enroll in the National Health Insurance Plan (kokumin kenko hoken) at your nearest government office. This is the same place where you completed all the details for your Resident Card. Your health insurance premium varies according to your income level and the number of people living in your household.
However, in most cases public healthcare only reimburses 70% of most medical expenses. For children under three the figure is slightly higher, and it can be expected that 80% of the total healthcare cost will be recouped. Various medical treatments are not paid for at all. You might consider taking out additional health insurance from a private company.
Planning for the Future
Every person aged 20–59 and living in Japan must usually enter into the National Pension Plan, regardless of their nationality. The National Pension Plan (kokumin nenkin) is supposed to guarantee residents of Japan a basic income in their old age or in case of disability.
You have to enroll in this scheme at your local government office and pay a monthly contribution of roughly 16,000 JPY, regardless of your income level. However, if you are part of the Employees’ Pension Insurance System (kōsei nenkin hoken) as well, your employer will automatically enroll you for the kokumin nenkin, and you don’t need to handle the paperwork yourself.
Employee Pension Insurance
All full-time employees working for a Japanese company with more than five employees will automatically become a part of the Employee Pension Insurance. It does not matter whether they are Japanese citizens or expatriates.
Your monthly contributions depend on your income level and will be deducted from your paycheck (together with the 16,000 JPY for the National Pension Plan). Once you leave Japan, you may get back all your Japanese pension contributions in a lump-sum withdrawal, provided you have paid them for more than six months.
Social Security Agreements
If your home country doesn’t have a social security agreement with Japan but has a comparable state pension plan, you might be required to pay contributions in both countries. This depends on the exact nature of your employment in Japan, your length of stay, and general regulations in your country of origin.
At the moment, there are social security agreements with Australia, Belgium, Brazil, Canada, the Czech Republic, France, Germany, Ireland, the Netherlands, South Korea, Spain, Switzerland, Hungary, India, the UK, and the United States. Another agreement with Italy was signed a while ago, but has not been enforced yet.
As a general rule, expatriates from these countries have to pay state pension contributions in Japan only — the only exception being that their employment contract explicitly states that their assignment is only temporary. Then they are exempt from contributing to Japanese pension schemes, but they have to pay pension contributions in their home country.
A Word of Advice
The application of social security agreements to the situation of individual expats can be rather complicated. It is always best to get in touch with the pension office in your country before you move to Japan and ask for advice.
Of course, most private pension plans and retirement provisions (e.g. life insurance, pension funds, investing in real estate, etc.) do not fall under the rule for national pension schemes. You should rather contact your investment manager or an advisor from your bank to learn more.
Taxation and Office Etiquette in Japan
How to Pay Your Taxes
As is the case in most countries all over the world, taxation is unfortunately quite as inevitable in Japan. Direct taxes are levied on three different levels: the national, the prefectural, and the local one.
National taxes include, for example, liquor or tobacco tax and the annual income tax. As a car owner, you have to pay your automobile tax to the prefecture where you reside, and there is both a prefectural and a local residence tax.
For foreign nationals, the Japanese income tax system can be very complicated. If you have lived in Japan for more than 183 days in a year, you will be classed as a “Resident” and are likely to be subject to some form of income tax on any income you receive within. If you have lived in Japan for less than five out of ten years, any income you receive from outside of Japan will be exempt from Japanese taxation. That does not mean you will not be subject to other Japanese taxes such as inhabitance tax.
Japan uses a self-assessment tax system, and specific incomes like salaries and wages are included in the withholding tax system. They will be deducted from your paycheck, but you still have to list them in your annual tax return. In Japan, the income tax return has to be filed between 16 February and 15 March every year.
Seeking Tax Advice
However, things like determining fiscal residency, avoiding double taxation, and minimizing your taxes are rather difficult to work out for people who are unfamiliar with tax laws. For this reason, we recommend that you seek advice from an international tax advisor both at home and in Japan. Thus you will get competent information on the tax system of both nations and your individual situation as a tax-paying expat.
A Japanese Style of Business
If you are an expatriate from another East Asian nation, such as Hong Kong or Taiwan, certain aspects of doing business in Japan will probably be familiar to you. For an expat from a different cultural area, Japanese business etiquette means facing a lot more unexpected pitfalls.
The following advice can by no means replace studying up to date and comprehensive business guides to Japan or, even better, attending a cross-cultural training seminar.
Fitting In at Work
Upon encountering your Japanese business contacts or co-workers, follow their lead when it comes to choosing the appropriate form of greeting (a handshake or a bow). Avoid too much eye contact. What may count as honesty, frankness, or friendliness in your country could be interpreted as a rude stare in Japan.
When it comes to small talk, as a foreign visitor or resident, you can never go wrong with mentioning a few things you like about Japan. Direct criticism — be it of Japan, your colleagues, the suggestions presented in the meeting, etc. — should be avoided at all cost.
The exchange of business cards is an important ritual at the beginning of meetings, conferences, negotiations, etc. Treat those cards with respect. This means: Don’t fold them; don’t scribble on them; don’t put them away hastily and without looking at them; don’t simply stuff them in your pocket.
Kon’nichiwa! Meeting Your New Colleagues
Make sure to address business partners with their family name followed by san (a polite term for Mr. / Mrs. / Miss / Ms.), for example Ōtomo-san for Mr. Otomo and Ikeda-san for Ms. Ikeda. Official titles like professor or director are also important.
However, you should only address Japanese people by their given name if they explicitly offer this to you. Non-native speakers unsure about the subtleties of the Japanese language should also avoid more colloquial forms of address, such as Katsuhiro-kun among men or Ryoko-chan for younger women and female relatives.
Making a Good First Impression
Make sure to wear neat, elegant, understated and, above all, conservative clothes (including shoes and accessories). That way, you will make a positive first impression. Remember that, as a gaijin, you will be perceived as an outsider — even if you have been living as an expatriate in Japan for several years.
Doing business in Japan might take more patience than you are used to. However, this is no reason for disrespecting the basic socio-cultural values of hierarchy, harmony, and loyalty. Reminding yourself of these, even when you may be confused or frustrated, will help you do a great job.
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