The impact of Nordic Innovation House on Tokyo … and on you!

NIH Tokyo homepage header

Nordic Innovation House is a global innovation platform created by the five Nordic countries in collaboration for now and for the future. Sweden, Finland, Norway, Denmark and Iceland work together in a unique partnership. Primarily, it’s in order to help the best startups and scaleups to save time, make the right connections and grow further. Secondary gains are the promotion of Nordic culture and Nordic values of sustainability, cooperation and fairness. This blog article is a dive into the early and impressive start of NIH Tokyo and an interview of Niklas Karvonen, NIH Tokyo’s director.

In 2020, Tokyo became Nordic Innovation House location #5

Before Tokyo, NIH established themselves in the World’s most interesting melting pots: Silicon Valley, New York, Singapore and Hong Kong. Each NIH having a slightly different focus, but all essentially being industry agnostic. As long as you have ambition, traction, see expansion as the next step and innovation with some technical height, they will want to speak to you.

Are you a tech company from the Nordics? Connect to get a head start in Japan!

Niklas Karvonen
Niklas Karvonen, director of Nordic Innovation House Tokyo, NIH Tokyo.

Do you also want to contribute or collaborate with us in Tokyo? Contact me directly!

Niklas Karvonen,

In Tokyo, the director is Niklas Karvonen, an expatriate Finn. He’s a strikingly friendly, humble and bright guy with an amazing network. At 29 years of age, he’s already lived in Japan for 4 years and has worked as community and marketing lead for a tech company in Tokyo, business designer for a Japanese IoT startup, and he’s been an active member of the global startup community in Japan through organizing events such as Slush Tokyo. He tells us:

– What makes me the proudest, is that we are a Pan-Nordic collaboration that saves time and resources for our growing companies. It takes time to find the right partners on a new market, and you always run the risk of partnering with someone who doesn’t understand your needs. As we have access to tried and tested consultants, back-office companies, business lawyers, auditors, investors, companies working along the lines of Open Innovation and all the other resources you need, our goal is to help the Nordic companies hit the ground running in Japan. Our partners, including also Japanese governmental institutions and the Nordic support agencies, are all eager to get to know you in order to see how they can be of use.

Nordic Innovation House (NIH) is funded by Nordic Innovation (NI) and saw its first NIH come into existence in Silicon Valley in 2014. It proved to be a success and they now host several hundreds of members, all of which are startups or scale-ups from the Nordics. The impressive and ever-expanding list of the Nordic membership companies in Silicon Valley you can check out here. In Tokyo, the work of finding eligible members has only just begun.

– We are very excited that we, in fact, just last week (!) launched our campaign and work in finding our Nordic member companies. Naturally, we are looking for eligible members where Tokyo and Japan is a great fit for their business growth and expansion plans. It’s well worth mentioning that we will also invite our pioneering members to join us in talks on how to develop our offering. We are looking forward to becoming the best possible innovation community and platform for the Nordic business ecosystem in Japan.

Japanese investment in Nordic startups is on the rise! Diagram from the report Nordic Ecosystem.

Before setting up the organization for active members that are used by the assistance of NIH, many things need to be in place. For that reason, Niklas and his aides have been busy creating connections to trusted service providers, mentors, Japanese corporations and investors, industry associations and media, as well as increasing NIH Tokyo’s organic reach in mapping key opportunity verticals for Nordic companies. They are working with large governmental organizations like JETRO and all the way down to one-woman-sized companies.

– We only look for the best and most trustworthy partners with great tracking records. We want outstanding Nordic companies to meet with great mentors. We believe that by putting quality at the centre of our actions, we can deliver the most value to our complete ecosystem. We are happy to say that our Pan-Nordic collaboration is unique in the world, and saves our members’ most valuable asset: time.

Resources for you to dig in to:

Want to join NIH Tokyo’s Newsletter? Subscribe from the website:

Contact NIH in South East Asia directly:

Tokyo: Niklas Karvonen Mobile: +81 80 8908 4814

Singapore: Sami Jääskeläinen  Mobile: +65 9722 5131 

Hong Kong: Binh Johansson Mobile: +852 6623 8799

Want to learn more about NIH in SE Asia? Then you have to watch this:

A 1-hour jam-packed session explaining everything about NIH Tokyo, Hong Kong and Singapore on Youtube:

Everything you ever wanted to know about Nordic Innovation House in Tokyo, Singapore and Hong Kong.

You can download the slides here:

Useful links:

Nordic Innovation House Tokyo:

Nordic Innovation House:

Nordic Innovation:

Great resources:

The graph in this blog post comes from Innovation Lab Asia’s “Nordic Ecosystem” report (2019). Please access it here: , it’s a good read presenting the Nordic startup ecosystem for a Japanese audience.

If you want to tracks investments from Japan to the Nordics, have a look at this site: A lot of interesting stuff there.

The picture of Tokyo comes from Nordic Innovation House Tokyo’s homepage.

Recognition for work well done: Accreditation by the RKW in Germany

We are now accredited by the German RKW Center of Rationalisation and Innovation. Not only are our clients happy with Manifestum’s achievements, but we are also deeply proud of the great ideas we help move from imagination to be manifest in reality. That’s what we are and that’s what we do. Our tracking record has been recognized by many, including RKW in Germany. Recently, our CEO was accredited by RKW as a seasoned and proven business consultant. This means that German SME’s can hire us to help develop their business in Japan and be subsidised with 50% of the investment. 

RKW in Germany operates under the vision: 

Menschen. Unternehmen. Zukunft!  

(Meaning: People. Corporations. Future!). 

Their aim is to support new and next-generation industry leaders to build strong and successful companies, strengthening all of society. If you ask us, they’re doing quite a good job! 

The history of the RKW in Germany 

In 1921, the German Ministry of Economics and the German Association of Technical and Scientific Associations together with entrepreneurs founded the “Reich Curatorium for Economic Efficiency in Industry and Crafts” in Berlin. The purpose was to support a future that for most people looked gloomy. WW1 had ended badly for the country, with its finances in disarray. The visionaries behind RKW wanted to build a sustainably strong future and at the same time help people get their hopes up whilst catching up with the industrial greatness of the USA. 

Worse things came to happen with WW2, but the RKW remained vigilant and was ialso nvolved with the Marshall plan, leading the Productivity Center and helping get Europe back up on its feet. They are still around and their hard work to support the building of ever stronger industries in Germany has paid off. Manyfold. German industry is world-famous today and strongly associated with top quality in all of the disciplines: science, technology, invention, medicine, biotech, etc. This may not have been the case, had it not been for the RKW. 

The current organization of RKW in Germany 

The full name of RKW is the RKW Center of Rationalisation and Innovation and is a highly functional ecosystem. There are several organizations that make up the RKW Network. The cornerstones are the RKW Competence Center (a research NPO) and RKW eV (the original organization). The RKW in Germany are organized so that there is one RKW head office in most of the country’s 16 regional states. The smaller regional states cooperate with others. The accredited business consultants are accredited by the local RKW office. Accreditation with one office means that accreditation with the other offices becomes much more simple. Manifestum’s CEO was originally accredited in Thüringen. 

The goals of RKW in Germany 

The RKW advises and supports small and medium-sized companies in all phases of their development. They support having a differentiated, neutral and comprehensive view of each individual company.  

The foundation of RKW services is a structured entry-level consultation, in which the RKW identify the essential challenges of each company, help plan sensible next steps and give guidance/assistance for self-help. The RKW also has access to a high-quality network of tried-and-tested experts for specific topics back. And that’s where Manifestum belongs. 

What the RKW in Germany actually does

As they recognize that business is global and becoming less and less local, they promote globalization early. Both pragmatically and for lifting the topic at board meetings. As the internet is accelerating new business models, their experience is that SME’s have to put a lot of effort into benefiting from these developments. 

All the obstacles such as the lack of market knowledge outside of Germany and the EU, they have covered with tried and tested consultants. If you think about it: Why would it be a good thing to not work with the best of the best? 

RKW as an inspiration for other countries to support their industry 

The model that the RKW is working by is absolutely fantastic: If you are a German SME, all you need to do is to write a 4-5 sentences long project description. The approval process is fast and straightforward. They subsidise 50% of your approved project and the final report mustn’t be longer than half an A4. 

This probably means that someone actually reads it! 

What does it take to be an accredited consultant by the RKW in Germany? 

First of all, you need a German company to sponsor you, as in wanting to work with you on a business project. Then you need to fill in a number of forms. All in German. If you struggle with the German language, Google Translate and Google Lens are good enough to help you get most of the things right. 

You need a number of active years, successful projects and full documentation to back up your education and claims. You also need to include a reference list. 

What does it mean to be accredited by the RKW in Germany? 

Once you’re through their rigorous process of due diligence, you will need to have followed through with a first successful project before you get your certificate. 

Most importantly: 

As a client, you know that your consultant is well-experienced and knowledgeable. A person who most certainly ought to be able to help you reach success with your endeavours. As the cream on top: 50% of the consultant fees will be reimbursed to you by RKW. 

German companies taking aim at Japan 

Compared to other countries’ companies in Europe, the German companies are one step ahead, already at the get-go. This is thanks to the RKW. We really think that this model should be implemented in all of Europe’s countries. As one of the measures necessary to increase the continent’s low growth figures. Without support programs, quite a few great companies will never come into fruition. The RKW-way is a very successful strategy that isn’t too difficult to copy. 

To Manifestum, it matters not if you’re a part of this German company culture or not. Either way, Manifestum is available to help you do great business in Japan. 

Manifestum has solutions for all international companies whenever you need world-class results. We help you do business in Japan. 

Never hesitate to contact us for a free initial consultation! 

Further reading 

The RKW homepage 

The RKW Thüringen homepage 


Kindly edited by: Hr. Dr. Ing Axel Pilgrim.

Key image kindly by: PXHere

The Three Most Powerful Industrial Organizations in Japan

Businessmen and businesswomen in Japan

Japan has three private powerhouses that organize the country’s various industries and different sized companies. All three help develop and push policies aimed at achieving the best possible evolution of Japan’s business climate. Keidanren is considered the most conservative and quite similar to The Confederation of European Business, or as we usually say: “BusinessEurope”. Japan Chamber of Commerce is a network of comprehensive local economic organizations, organizing some 1.25 million members businesses nationwide, embracing companies in every size, from sole proprietors to large companies. Japan Association of Corporate Executives organizes around 1400 top-level executives from Japan’s 1000 largest and most influential industrial companies. They work with issues related to the development of Japan in many aspects from social to reform and economy in both a domestic and global context.

Keidanren – Japan Business Federation

Its original name translates to Japan Federation of Economic Organizations and was established just after WW2 with the aim of recovery for the Japanese economy. In 2002 it merged with Nikkeiren (Japan’s Federation of Employers’ Association), keeping the name Keidanren. For most of the post-war period, Keidanren has been the voice of Japan’s largest industrial companies. Noteworthy is the fact that they always supported the government’s efforts to raise Japan’s consumption tax to 10%. It has even called for the consumption tax to be raised higher, namely to 15%.

Keidanren organizes over 1400 member companies, some 100 nationwide industrial associations and 47 Regional economic organizations. Their own organization comprises a large number of committees, devoted to all different industrial sectors as well as special projects, including COVID-19.

The aim of Keidanren’s work is to achieve sustainable development of the Japanese economy in order to improve the quality of life for all of the Japanese people. The work they carry out is prepared in committees and then communicated to regulatory bodies, government and the various ministries.

An example of Keidanren’s communication:

Subcommittee on Digital Economy

Japan has proposed Society 5.0 as its concept for the future society, with the aim of realizing economic growth and solving social problems by making full use of digital technology and data. The government and the private sector are working together toward this goal.

To realize Society 5.0, it is essential to formulate consistent rules backed by a global consensus that facilitate the secure use of data across national borders. Therefore, all countries must pay attention to ensuring a balance between the consumers’ values, protection of privacy, and public interest while deepening international cooperation in order to build international systems and mechanisms for the free flow and utilization of data across national boundaries.

From this standpoint, we would like to give the following comments on “A European strategy for data” released by the European Commission on February 19, 2020:

(Read the full communication here!)

This was COMMUNICATED by keidanren On May 30, 2020.

Keidanren’s mission

The mission of Keidanren is to work for accelerating the growth of Japan’s and the world’s economy. Their means are through strengthening corporations and to transform the Japanese economy into one that is sustainable and driven by the private sector.

Keidanren has always been very clear that they work with always achieving consensus among their own. However, one recent decision resulted in something very unusual. Their work to influence the government in one area was not smooth. Keidanren’s official policy view was to restart Japan’s nuclear reactors as soon as possible after the Fukushima disaster. This led to an astonishing rift in Keidanren’s fabric. Rakuten’s president, Hiroshi Mikitani, left the federation over this issue. Masayoshi Son of SoftBank Group publicly objected to the organization’s focus on restarting the nuclear plants but remains a member.

Japan Chamber of Commerce, JCCI

This organization has an immense amount of tradition and history under its belt. The first Chamber of Commerce and Industry was established in Tokyo in 1878. Chambers later sprung up in other cities. In 1892, 15 chambers gathered together and formed a federation that found its current form as the Japan Chamber of Commerce and Industry (JCCI) in 1922. Today, there are 515 Chambers of Commerce spread out through Japan’s cities.  They form a large-scale nationwide network that boasts 1.25 million organized members. Chambers in Japan are designated as corporations with special status and operate under a special government law called the Chambers of Commerce and Industry Act. The Japanese Chambers all have the following characteristics apart from being public, non-profit, and non-political:

  • Regional, one chamber per city.
  • Large and small companies of every industry are welcome as members.
  • International in their organization and outlook.

Understandably, the JCCI is a strong voice for a huge part of Japan’s Industries. As they also organize SME’s, they also communicate the future of Japan’s new companies. They are an opinion leader in mainly economic circles. JCCI give voice to the local chambers by representing them to the government and other relevant bodies. There’s strong work performed in helping with the implementation. JCCI also plays an important role in the dissemination of information concerning government policies and programs, and the promotion of various nationwide projects.

JCCI Formulating Policy Proposals for the Japan of Tomorrow

Arguably, their most important function is to help solve the problems facing regional communities. This is achieved by speaking on behalf of the local economies and societies. JCCI is harnessing the immense power of the private sector in order to actively recommend and lobby for needed new or updated policies, and by working toward their implementation.

JCCI’s toolbox includes surveys and studies from the medium-to-long-range perspective. The key issues they work with are economic measures, small business policies, the tax system, finance, economic regulations, the global environment and reforms. Education, labour issues, international relations, and the Constitution are other important areas of focus.

Japan Association of Corporate Executives

The Japan Association of Corporate Executives is a private, nonprofit, nonpartisan organization of professional association of independent leading executives. It was founded in 1948 and engages in advocacy on public policy issues related to the development of the Japanese economy in both a domestic and global context.

The work in the organization is based on each member shedding her/his corporate identity and instead participates as an individual. Unconstrained by the interest of any specific company or industry members are completely free to express privately held opinions and ideas. This feature distinguishes them clearly from the other two organizations.

Their approximately 1,400 members are all top senior executives from almost 1000 of Japan’s most influential corporations. Membership is by invitation only. All members share the idea that corporate managers should be key players in formulating solutions of a broad range of political, economic, and social issues.

They conduct in-depth policy studies and organize seminars on a variety of important issues that relate to the development of the Japanese economy. The association engages with political parties, government officials, ministries, labour organizations and other of society’s stakeholders.

Japan Association of Corporate Executives promotes a progressive, innovative and market-based approach for Japan’s future best well-being. This is in stark contrast to the position of the other two main corporate business associations: Keidanren and the Japan Chamber of Commerce and Industry. However, it’s useful to keep in mind that this is “progressive” from a deeply traditional Japanese perspective. This progressive organization only extended membership to female executives as late as in 1986. As always, better late than never.

A key concept that they are advocating is the notion that corporate social responsibility is an integral part of responsible business activities, not simply a legal compliance issue or limited to discrete charitable giving.

How to deal with corporate taxes, payroll and accounting in Japan (Part 2 of 2)

Human Resources in Japan.

Welcome to our second part of this current overview of Japan’s corporate taxes, payroll and accounting. This post puts the focus on HR and payroll. As a small reminder from the previous post on the topic: Not only is the Japanese language a challenge to get around, but there is also a reason why no-one is interested in importing Japanese bureaucracy. Quite different from Kai Zen, JIT and other excellent Japanese inventions that are attractive to import and integrate by so many organizations. But, Japanese bureaucracy: No please. Be prepared and allow a minimum of two months to establish a payroll in Japan.

It is important that all business owners have at least a basic understanding of Japan payroll because:

  1. Your business must comply with all legal obligations.
  2. Japanese employees will have more confidence in your management team if you have a basic grip on how this works. How else will you be able to fruitfully discuss this vitally important topic?
  3. Understanding the Japanese payroll system is the foundation for tax planning for both expatriates and locally hired employees. (See a great link for tax-planning in Japan in the resource section below!)

Our conclusion is: Outsource your Japanese HR, payrolls and be done with the headache!

Like all countries, Japan has laws regulating labour and protection of employees. This will be more or less different from your country. The four main acts regulating the Japanese workplace are the following:

  • The Labor Standards Act
  • The Industrial Safety and Health Act
  • The Minimum Wage Act
  • The Equal Employment Opportunities Act

The Labor Standards Act sets out the rules for the working conditions. The Industrial Safety and Health Act aims at the workplace-safety and health of all workers in Japan. The Minimum Wage Act regulates the minimum wage that companies can pay their employees and the number differs in between different geographical regions. The Equal Employment Opportunities Act takes aim at removing inequalities of sex, age, ethnicity etc.

These laws apply to all enterprises in Japan. It makes no difference if the ownership is non-Japanese: if you’re on Japanese soil, you must play by the Japanese rules. These rules also apply to foreign workers in Japan provided that the foreign workers meet the criteria for workers under Japanese regulations.

Labour standards inspectors patrol workplaces in order to make sure that Japanese workers are safe and that all necessary systems are in place.

Recruiting empolyees in Japan – Hello Work

Hello Work is Japan’s government-run employment agency. They have offices throughout Japan and offers free support both for people looking for work and companies looking for employees. Hello Work covers all industries.

There are also some regional public organizations and educational institutions such as universities who also provide employment services for free.

There are also many privately-run employment agencies and head-hunters. The different flavours include executive search consultants, industry-specific agencies and general-purpose agencies. They come large and small. Often these companies will charge you on a contingency basis. Japan also has a wide range of job-transfer magazines that are made available in train stations and other places with a high throughput of people. There are also a number of Internet services where companies can advertise career opportunities and vacancies.

Contingency based fees: You pay when you hire someone from their database.

Recruitment restrictions in Japan

In most cases, as an employer, you are limited to selection criteria to be wholly based on whether the applicant has the necessary qualifications for the job you’re offering. An applicant’s nationality, family, religious beliefs etc can’t be used as standards when hiring.

Checklist for what needs to be in your Japanese job advertisement

  • Job description
  • Wage
  • The period of the agreement
  • If there’s a probation period, it must be specified
  • Workplace address
  • Start and finish times, overtime, breaks, days off and vacation.
  • Employee’s health insurance, pension, industrial accident compensation insurance and employment insurance
  • Name of the person who offers the job
  • If the employer recruits employees for worker dispatching undertakings, the fact that the employer does so.

It’s important to note that if you decide to not go along with an employee after the probation period, it will be seen as a dismissal. This means that you, as an employer, must have valid reasons on a higher level.

Japanese Law

Re-assignment, external assignment, and dispatch of workers to other companies

Reassignments where employees changes both cities and companies are common in Japan. It’s almost expected. However, you need a license for Worker Dispatching. Without such a license, you will be committing a crime if you engage in Worker Dispatching!

Worker dispatching, Contracting and Temporary Transfer are all possible and common in Japan but need to be carried out in complete accordance with laws and the local union.

Guarantee and guarantor for employees

When you hire someone, you can require that a guarantee of good conduct be provided by a relative of the worker or other guarantor. Such a guarantee is legally valid in Japan. A guarantee is deemed to be three years if not specified. The maximum time for a guarantor to take responsibility is five years.

Severance Pay Systems in Japan

In Japan, it’s customary with a severance pay system in place in companies. In Japan, this is triggered when an employee leaves a workplace and is a one-off payment. Such payments are also treated very favourably by the taxation laws.

Statutory working hours and statutory days off in Japan

The law states that statutory working hours should not exceed 40 hours per week or eight hours per day (excluding breaks). However, some businesses (retail, health, small restaurants etc) are permitted to have their employees work more.

Employees are granted statutory days off for at least one day per week, or four days off in any four-week period. Worth noting is that Sundays or public holidays are not by any means automatically days off. Any weekday may be selected as individual employees’ regular day off.

Requirements for having your Japanese personnel work extra overtime

If you need your personnel to work outside of the statutory working hours and days off, you must submit a Notification of Agreement on Overtime and Work on Days off. This means up to 15 hours a week or 360 hours in a year.

Overtime payment follows a strict percentage increase depending on many factors. It commands an increase in salary between 25% to 75%. It’s worth mentioning that executives and managers are excepted from the rules surrounding overtime.

Maternity, childcare and family care leave in Japan

Expectant mothers can request a leave of absence six weeks before the expected date of delivery and as an employer, you must approve such a request. Employers are also prohibited to make a woman go to work before eight weeks after giving birth.

Childcare leave in Japan means that a mother has the right to stay home up until 14, 18 or 24 months depending on circumstances.

An employee with a child aged less than three years old can request to be exempted from non-scheduled work and is allowed to request short-time working.

An employee who has a family member with nursing care can request permission for a leave of absence to provide the care. It’s legally capped at three times and a total of 93 days per family member concerned.

Up to 10 days per year, employees can be absent on order to nurse a child or to take care of family members.

Worth noting, all the mentioned periods of leave may be unpaid by the employer but can reap some benefits under the health insurance coverage employment insurance coverage.

Work rules in Japan

Each workplace sets its own working conditions such as working hours and wages, as well as general rules. If you have over 10 regular employees, you must submit the work rules to your local Labor Standards Inspection Office.

Work rules in Japan have the same legal force as labor contracts.

A checklist for your minimum Japanese Work Rules:

  • Start and finish times, breaks, days off, leave of absence (including childcare and family care leave), and work shift arrangements where work is to be performed by two or more teams of workers.
  • Methods of determining, calculating and paying wages (excluding special bonuses and other pay), wage closing day of payroll and payday, as well as matters pertaining to wage raise.
  • Matters pertaining to resignation or dismissal (including grounds for dismissal).
  • Any arrangements established regarding the following matters must be included in the work rules:
  • Retirement allowances
  • Extraordinary wages, etc.
  • Responsibility for meal expenses, etc.
  • Safety and hygiene
  • Job training
  • Workers’ accident compensation
  • Awards and disciplinary measures

Safety and hygene in the Japanese workplace

All new employees must have a health-check that is then carried out annually or biannually depending on a number of circumstances. If you have over 50 employees, you need to appoint a Health Officer and hire an Industrial Physician for various matters. With over 50 employees you also need to perform annual stress checks on your personnel.

Resignation and dismissal of employees in Japan

Resignation can be done by two weeks notice unless a reasonable time-frame is stipulated in other ways. Resigned workers are prohibited by law to help competitors by sharing company secrets.

Dismissal of employees is difficult in Japan and in case of a dispute, it is always the employer who carries the burden of proof. The dismissal comes with a number of vague rules and very real potential legal challenges. The general advice is to get thorough advice before attempting to dismiss an employee protected by Japan’s legal system. There are four legally approved grounds for dismissal of personnel:

  • Necessity from business circumstances, with the company showing that redundancies are unavoidable and necessary.
  • An effort to avoid redundancy. The company must prove serious undertakings to avoid redundancies.
  • Reasonable selection. The company must prove fair and reasonable selections of redundancies.
  • Reasonable process. This means sufficient consultations were made with workers and labour unions.

Dismissal can not be carried out in case an employee is absent because of disease, caring for children or family members. Whistle-blowing is not a reason for dismissal.

In all practicality, dismissals in Japan are usually by an employee’s free decision and usually comes with added bonuses and a severance pay with a golden tinge.

Resignation and dismissal of Directors in Japan

The office of directors in joint-stock corporations terminates upon expiration of their term of office. Directors may also resign at their own discretion. However, if it causes a vacancy in the position, a director may not be released from his/her obligations until a new director takes office.

Directors might be dismissed by the General Meeting of Shareholders regardless of reasons. However, a premature dismissal of a director without any justifiable reason means the company must pay for damages.

The Social Security System of Japan

Many countries have Social Agreements already in effect with Japan. The agreements cover pension and medical insurance. Each country has different agreements and you can find your own country in the list of Table 4-9 here. Furthermore, your embassy or international trade organization can provide you with the exact details.

This heading is in itself enough to write several books about. We, therefore, provide only a bullet-list in order to help you as a reader to draw your own conclusions on what must be managed and find the specific information you need using search engines.

  • Labour and social insurance systems
  • Workers’ Accident Compensation Insurance
  • Employment Insurance
  • Health Insurance and Nursing Care Insurance
    • Medical expenses
    • Overseas expenses
    • Excessive medical expenses
  • Employees’ Pension Insurance
    • Old-age pension
    • Disability pension
    • Survivor’s pension
  • National Health Insurance Scheme
  • Corporate Expenses for employee-related taxes, insurances etc

There is a great and comprehensive overview available on this topic on Jetro’s website that you can visit here including highly useful flowcharts on Insurance and Annual procedures.

Payroll in Japan, the perks and the jerks

Paying your Japanese employees their salary

Employees are usually paid on the 25th of the month in Japan but your company can fix a different date if you so wish.

Employees also usually get reimbursed for their commuting costs. However this is not an obligation, but may be expected.

Salaries and bonus in Japan

The minimum wages in Japan can be found here!

Salary Revision is performed once per year.

It’s customary in Japan to pay monthly salaries and two yearly bonuses: One Summer bonus and one Winter bonus. The monthly wage usually includes a basic wage and a range of allowances. The amount paid in bonuses may come as a shock: it makes up a high proportion of the total wages paid, equalling on average across industries almost 5 months of wages.

The Japanese employee expects both Summer and Winter bonuses, totalling somewhere around 5 months of ordinary monthly pay.

average over a range of industries

The high proportion of the wages made up of allowances and bonuses lower the rate of pay for overtime pay. Yearly wage systems are in place, but mainly for management-level employees.

Japan yearly bonus system for dummies

The Japanese bonus system often causes confusion for non-Japanese companies attempting to understand the Japan payroll system. First of all, the traditional Japanese Summer and Winter Bonus system is deeply rooted in tradition and has nothing to do with any kind of performance bonus systems. According to some sources, Japanese companies take an employee’s annual compensation and divide it by 16. The employee then receives 1/16th of their annual salary each month except in June and December. In June and December (or January), the summer and winter bonuses are paid. meaning that, in June and December, employees receive 3/16ths of their annual salary.

Please note that there are other ways of calculating the Japanese summer and winter bonuses! There are also differences between different industries and between different types of employees.

Foreign firms in Japan often simply divide the annual compensation by 12 and pay the same amount every month. This is not met with any kind of concerns or negativity from Japanese employees. Meaning, you are welcome to do what suits you the best.

Don’t forget: bonus or no bonus must be indicated in your employment agreement.

Year End Bonus payment and Year-End Adjustment

In Japan, you must calculate the tax liability of each employee at the end of each year and adjust for the tax due on the last salary payment. This is called Year-End Adjustment. Since this process is complex and takes time, the common practice for December bonuses is to pay the December bonuses early in the month as in before December 8. Many companies instead chose January for the Winter bonus payments. A Winter bouns paid in January can still be considered as an expense for the previous fiscal year even if the company ends its fiscal year in December.

Year-End adjustment on employee withheld income tax

The Year-End Adjustment is for the calculation of the income tax due by the employee. During the year, employee tax is withheld each month from employee salary based on the rates published by the tax office. At the end of the year, we calculate the exact tax liability of the employee based on her/his special situation (such as the number of dependents) and we make an adjustment so that the total amount of tax withheld during the year equals the tax liability of the employee. The amount of tax withheld from employees is reported annually in the withholding tax report “Gokeihyo” filed in January.

There are three main payroll taxes in Japan: National and Local tax, Social Insurance and Labour Insurance

  1. Japanese individual income tax, national tax and Residential (local) tax
  2. Japanese social insurance.
  3. Japanese labor insurance.

Employee National tax liability is calculated by the company, deducted from the salary and paid to the proper authorities.

Employee Residential tax liability. This is a local tax that is calculated by each employee’s respective ward office of the residence of the employee. This tax can be paid by the employees themselves. However, employees usually ask their companies to have this tax deducted from their salary instead.

Social Insurance mainly consists of a statutory retirement contribution, National Health Insurance, and a long-term care premium. The employer generally matches the employee contribution. This provides your employees with Social Insurance cards that give them a 70% discount on any medical health care costs. This universal coverage for employees in Japan is very good and your employees are usually satisfied with it. This means that your employees will not need any additional health care benefits. There are two prominent groups of the Japanese social insurance system: 1) Social insurance which is consisted of Health Insurance, Nursing Care Insurance, and the Welfare Pension Insurance, and 2) Employment Insurance and Worker’s Compensation Insurance.

Health Insurance and Welfare Pension need to be paid in Japan as soon as your company has more than one employee, including officers. However, if you have a representative office in Japan, this limit is from 5 employees and participation in the Japanese Social Insurance before that is voluntary.

Japanese labour insurance is a program that consists of workers’ accident insurance and unemployment insurance. Employers and employees both contribute to this program, but not equally.

Payroll taxes are paid monthly and Labor Insurance is paid on a yearly basis.

Paying the taxes for your employees. The set date is the 10th of the month following the salary payment. If your company has less than ten employees, you can make a request to your tax office called “noki no tokurei” and instead pay the tax only twice a year.

Resident tax adjustment

For your employees with monthly resident tax, new resident tax payment slips are delivered by your tax office. This is done in June each year, meaning that you can update the amount of resident tax to be deducted from each employee’s salary. The resident tax deduction is based on the taxable income for the previous year. Resident tax is usually somewhere around 10% of the previous year’s taxable income. Resident tax is paid only for employees who were residents of Japan on January the 1st and had a taxable income in Japan in the previous year.

Tax returns in Japan

Unlike most Western countries, a majority of Japanese employees do not need to file annual individual income tax returns. This is because all of your employee’s tax obligations are already managed via your corporate payroll.

Paid Vacation in Japan

In article 39 of the Japanese Labor Law, it states that there’s a minimum amount of paid vacation that you, as an employer, must grant your employees. The number of days of paid vacation earned is based on how long someone has worked in your company:

If you have worked for at least: 6 Months, you get 10 a minimum of days paid vacation.
1.5 Years -> 11 days
2.5 Years -> 12 days
3.5 Years -> 14 days
4.5 Years -> 16 days
5.5 Years -> 18 days
6.5 Years -> 20 days

Nota bene: An employee must have worked over 80% of the time he/she has been hired.

Employees may accumulate up to two years of unused paid vacation. After two calendar years, any unused paid vacation is forfeited. For example, an employee with two and a half years of employment may accumulate a maximum of 23 days of paid vacation.

Public holidays in Japan

1st New Year’s Day
9th Coming-of-age Day
11th National Foundation Day
20th Vernal Equinox Day
29th Showa Day
3rd Constitution Memorial Day
4th Greenery Day
5th Children’s Day
3rd Monday of July Marine Day
11th Mountain Day
3rd Monday of September Respect for the Aged Day
22nd Autumnal Equinox Day
2nd Monday of October Health-Sports Day
3rd Culture Day
23rd Labor Thanksgiving Day
23rd The Emperors Birthday

The Japanese corporate taxation calendar


10th Withheld national tax, local tax and Social Insurances are paid to your Japanese tax authority.

15th Provide the current month’s payroll information to your Japan payroll provider.

20th The Japan payroll provider sends a breakdown of that month’s payroll and instructs the funding needed for the payroll account.

25th (at the latest) Funds are required to be in place.

25th (or other decided date) Funds are remitted directly to each employee’s personal bank account. Pay-slips are provided to each employee.


January: Filing your annual withholding report of the amounts withheld from employees’ salaries (for both national and local taxes) during the previous calendar year.

May: Annual labor insurance report.

May: Annual labor insurance premium is paid from the company’s bank account. This is paid as a prepayment of one year’s estimated labor insurance premiums.

August: Filing of the annual social insurance report.

December: Year-end adjustment of the Japan payroll. This is very important as, for most of your Japanese employees, it replaces the need to submit a personal tax return.

Payroll conciderations for non-Japanese employees and expatriates

If you expect to employ non-Japanese expatriates, you could consider paying them offshore. Your expatriate employees may enjoy significant individual tax benefits in this way. This way of paying salaries are covered in the Japan taxing system: Tax Planning for Foreigners Working in Japan. (See very useful link in the resources below!)

It’s important to keep in mind that your employees who are paid offshore are not considered to be a part of the Japanese payroll system. Meaning that you need to make arrangements for matters such as health insurance, pension etc. One important addition is that employees paid offshore usually need to submit Japanese individual income tax returns by March 15 regarding their earnings etc from the previous calendar year.

As your employee’s home country may have tax laws either prohibiting such measures or making them costly, special care needs to be taken before deploying this solution.

Checklist: Registrations your company need to make in Japan

Registration for Withholding Tax is a notice to the Japanese tax authorities. Your company will be assigned a withholding tax number upon registration with both the national and local tax offices.

Registration for Japanese Social Insurance is managed by the Japanese Social Insurance Office. Under normal circumstances, both the employer and employee make contributions to the program in equal amounts. Social insurance is very important. Your employees will expect that you manage their social insurances through the company payroll. Please remember that it can take up to two months to register your company for social insurance, your employees may be left without coverage during the application period. You need a solution for that! Here are two possible solutions:

  1. Health insurance coverage through your employees’ former employer. This can be possible for up to two years.
  2. Coverage through the national system for individuals. Your employees may receive interim coverage as individuals. Application is submitted at their local city office.

Registration for Japanese Labor Insurance is with the Labor Insurance Office for Japanese Labour Insurance. This system requires contributions from both the employer and employee. Registration is a relatively fast process.

Your company will need a Bank Account in Japan. It’s used to transfer the salaries to your employees. It’s also necessary for your payments to the Japanese tax authorities as these costs are deducted directly from your company bank account. Japanese bank accounts can be difficult and time-consuming to establish for new companies. It is strongly recommended that you ask your accounting firm or lawyers for a referral. A small note on Japanese corporate banking: There is more than one story out there mentioning “alternative service” and inefficiency from within Japanese banks, so prepare well and in good time! To my knowledge, there aren’t any Japanese banks that provide their Corporate Internet services in English. Go figure!

The solution is of course to use a non-Japanese business bank present in Japan. However, you will still need a Japanese bank account for tax payments and salaries.


As Japanese HR comes with what may very well be this World’s most complicated grounds for the calculation of wages, allowances, bonuses, a plethora of insurances to manage with taxes and social payouts on top of that, there is a reason why many non-Japanese entities decide to outsource this part. If payroll isn’t part of your core business and doesn’t add value to your operations, maybe you should join the outsourcing companies. Keeping a strong focus on what really drives your business forward is usually the best choice.

It is also our standard recommendation to outsource this bureaucracy together with the rest of your corporate taxation and accounting.

The perfect HRM, accounting and payroll shortcut: WeConnect Japan

The perfect shortcut

To make sure that your HMR and payroll are managed properly we suggest taking a look at weConnect Japan: These guys have over a decade of experience in helping foreign companies navigate setting up entities in Japan and dealing with all the local tax, finance, payroll, HRM and corporate secretarial compliance. Their services take management of the back office to the next level by using the latest international and domestic technology to create a customer experience never thought possible from an outsourcing provider.  Whether you are in the market for a provider or not, a 30-minute call with weConnect will leave you comfortable to take the next step in entering Japan. They’re Americans, meaning you will not be lost in translation.

(Manifestum currently has no affiliation with WeConnect Japan, we simply like them as they provide the best available outsourcing solution in Japan today.)

This article is for informational purposes only and not intended to convey or constitute legal or any other advice. It is not a substitute for advice from qualified professionals.

Great resources:

Tax Planning for Foreigners Working in Japan

weConnect Japan


EU-Japan Centre

Japan’s 2015 Tax reform outline (pdf, 127 pages).

Featured image byline:

Attribution: Alpha Stock Images –

Original Author: Nick Youngson –

Original Image:

How to deal with corporate taxes, payroll and accounting in Japan (Part 1 of 2)

Japanese yen bills.

Not only is the Japanese language a challenge to get around, but there is also a reason why noone is interested in importing Japanese bureaucracy. Quite different from Kai Zen, JIT and other excellent Japanese inventions that are attractive to import and integrate in so many organizations. But, Japanese bureaucracy: No please.

With bureaucracy you can’t choose not to, you need to bite the bullet. Here’s an overview of what you need to prepare yourself for, suggestions on how to solve issues and ^^a shortcut to manage your taxes, payroll and accounting with perfect results and no surprises^^. We also serve you a set of great links, all aimed at assisting you to do your homework.

First out is a great PDF from JETRO (The Japan External Trade Organization) giving you thorough information on everything you need to know from the corporate point of view. From the various available alternatives of setting up operations in Japan to visas, taxes, HMR, Trademark and Design Protection Systems.

Download JETRO’s 88-page-brochure here!

The easy-to-digest overview of corporate taxation in Japan

1. Choose your Japanese accountants (not singular!)

First of all, you may be used to needing only one tax accountant. Not in Japan! Here you will need two. You need a certified public accountant and a tax accountant. Public accountants perform audits under the Certified Public Accountant Law (an 80-page pdf in English here), while tax accountants engage in tax agent services: preparation of documents and tax consultations. They obey the Certified Tax Accountant Law. Both professions also provide additional services such as business consulting. Certified public accountants have a monopoly on the performance of audits, while tax accountants have a monopoly on tax agent services, preparation of tax documentation and tax consultations.

Let’s underline an important fact: your tax accountant is responsible for all communications between your company and the Japanese tax administration and this communication can not be managed in any different way!

2. Japan has four different sets of accounting principles

There are four very different sets of accounting standards that companies in Japan can currently choose from when filing their financial statements. The most common standard is called J-GAAP (Japan’s Generally Accepted Accounting Principles) and are issued by the Financial Service Agency (FSA) and Accounting Standards Board of Japan (ASBJ). The remaining three accounting standards are IFRS, US-GAAP and Japan’s Modified International Standards (JMIS). In 2019, over 30% of the companies listed on the Tokyo Stock Exchange had adopted or planned to adopt IFRS standards.

The accounting principles for any Japanese company are based on the following seven principles, and they shouldn’t surprise anyone:

  • fair and true reporting
  • bookkeeping in an orderly system
  • distinction between capital surplus and earned surplus
  • disclosure
  • consistency
  • prudence and
  • in accordance with reliable accounting records and facts.

3. Your Japanese Fiscal Year

The typical fiscal year in Japan starts on April 1st and runs until March 31st of the next year. This is not mandatory, but…

4. Financial Reporting is straightforward

Financial documents of a fiscal year closing usually consists of the following documents being: Balance Sheet, Profit and Loss statement, a statement of changes in net corporate assets and where needed, also explanatory notes for the aforesaid financial statements.

Joint ventures also need to adhere to some further regulation

A JV (joint venture) with a Japanese partner is usually a Kabushiki Kaisha (KK) registered in Japan. It must give public notice of its balance sheet without delay after the conclusion of the annual shareholders meeting. For a large company, its balance sheet and profit and loss statement. Publicly listed companies are also required to publish their quarterly and annual securities reports.

5. Some profound differences with the accounting principles of Japan and elsewhere

Both the accounting principles and the taxation systems differ profoundly. Depending on the status of the business entity which can vary from representative or branch office over the typical 100% subsidiary as permanent establishment called Kabushiki Kaisha to the lesser known Limited Liability Company (LLC) and Limited Liability Partnership (LLP).

6. E-business taxation rules when selling to Japanese customers

What determines the taxable situation for E-business follow the definitions of a permanent establishment. If a company is conducting E-business in Japan without having a physical presence in Japan, it will generally not be taxable in Japan. However, consulting with a business lawyer before venturing there is prudent, as rules change and there are a number of exceptions.

If you have have a storage in Japan for delivery or other, it may be considered that you have established physical presence in Japan. That would usually mean that your business will be taxable in Japan under Japanese tax law.

However, as there are a number of different tax and trade treaties signed between Japan and many different areas: EU-Japan Free Trade Agreement, for instance, your home country will affect what applicable to your business, under your particular circumstances.

If you are a non-Japanese company engaged in business in Japan with warehousing for the distribution of goods, you may very well be classified as having a permanent establishment in Japan. In such a situation, your company could be subjected to direct, as well as indirect taxes like VAT. If this is the case, you must have a tax agent.

A golden tinge for some European countries’ e-commerce companies

Many EU-based SMEs will not be taxed under the classic permanent establishment definition in the Japanese law. A business conducted from abroad, even with products stored in Japan, will not be taxable in Japan for quite a number of EU-member states. This means that e-commerce companies based in the following countries don’t need to pay tax in Japan, even if they have a physical presence there:

  • Luxembourg
  • Netherlands
  • Poland
  • Portugal
  • Romania
  • Slovakia
  • Spain
  • Sweden
  • UK

7. VAT is managed a little differently in Japan

Consumption tax refunds

Maybe you are accustomed to receiving monthly or quarterly consumption tax refunds in your home country? Well, you guessed it: the Japanese system is different. Common practice is that you file for a refund of taxes within two months after the end of the business year, including VAT.

Companies with taxable sales lower than JPY 10 million (approx £75k, €85k, and $93k) during the base period are exempted from the consumption tax obligation.

Base Period: is the benchmark period for determining whether or not a business is taxable. The base period for sole proprietors is the second preceding year before the Taxable Period, and the base period for corporations is the second preceding business year before the Taxable Period. For instance: EU companies with no taxable sales in Japan, are not eligible for a refund of consumption tax paid on business expenses incurred within Japan.

Japanese taxation rules

Consumption tax for cross-border service provision

In 2015, Japan implemented a reverse charge mechanism for B2B transactions. Providers of B2C digital services have to pay consumption tax. There has also been an overseas business registration system established.

For more details see the link below to: Consumption Taxation on Cross-border Supplies of Services.

The perfect taxation shortcut: WeConnect Japan

The perfect shortcut

To make sure that your bookkeeping and taxes are managed properly we suggest taking a look at weConnect Japan! These guys have over a decade of experience in helping non-Japanese companies navigate setting up entities in Japan and dealing with all the local tax, finance, payroll, HR and corporate secretarial compliance. Their services take management of your back office to the next level. How? By using the latest international and domestic technology to create a customer experience never thought possible from an outsourcing provider. Whether you are in the market for a provider or not, a 30 minute call with weConnect will leave you comfortable to take the next step in entering Japan. They’re Americans, meaning you will not be lost in translation.

Highly recommended!

(Manifestum currently has no affiliation with WeConnect Japan, we simply endorse what they’re doing.)

Picture of Japanese yen (C) Copyright Japanexperterna.

This article is for informational purposes only and not intended to convey or constitute legal or any other advice. It is not a substitute for advice from qualified professionals.

Some great resources:

weConnect Japan

Jetro on Corporate taxation

EU-Japan Centre on taxes and accounting in Japan


NTA, Japan’s National Tax Agency on Cross-border taxation

Japan’s 2015 Tax reform outline (pdf, 127 pages)

SARS upgraded evil twin SARS-CoV-2, a business devastator and heroes creator

SARS-CoV-2 infographics

It is in times of adversity that people and organizations show what they are really made of. In Japan, schools are closed, just like many museums, most or all trade shows have been cancelled or postponed, with many people sick and dying. Some products have seen manifold price-hikes with the follow-up dialogue if that’s in any way ethically defendable. In the meantime, the virus continues to spread. And not only in Japan. It’s everywhere! This article aims to shine a light on some who are truly heroes. This article is sourced and cross-checked over a vast number of sources meaning that it’s hopefully close to true.

The latest threat to global health is the ongoing outbreak of the respiratory disease that was recently given the name Coronavirus Disease 2019 (Covid-19).

New England journal of medicine

Doing business in times of pandemics

It’s generally believed that a bad pandemic will remove 5% of the global economy. Depending on the nature of the outbreak, different industries will, of course, be affected differently. It is true that even in the worst of times, there are business opportunities.

The travel and tourism industry is generally suffering. Other sectors that are taking a hit include events, restaurants, retail, leisure and real estate.

The gold price hit a seven-year high last week and stock markets around the world plunged. The Dow Jones Industrial Average suffered its worst week in over a decade as investors apparently shifted from ignorance of an impending pandemic into PPM: Panic-Pandemic-Mode. Put in a different light, last week wiped out a full year’s worth of market gains.

The Summer Olympics may not happen, Saudi Arabia shut down many religious sites and in South Korea, the leader of one church may face charges on manslaughter and their president Moon Jae-in is facing possible impeachment after earlier stating that the coronavirus will soon disappear. The media is also reporting that Panic Buying has started in Australia.

Drug companies are racing to develop or repurpose treatments to combat the potential pandemic. There are currently 35 active drug development programs in North America, Europe, and China.

A new survey by Genetic Engineering & Biotechnology News (GEN

Hard times make heroes

One great example is the British company Cambridge Mask who produces military-grade face masks for ordinary people. Their business has gone through the roof and they have slashed the price on-line with 10%.

“I’m pleased someone is appreciating that we’re not raising our prices. It seems a much more socially responsible thing to do in this situation.”

CEO of Cambridge Mask, Christopher Dobbing


…while several companies in hand-sanitation and mask-production have doubled (or more) their prices.

Amazon is warning third-party sellers against exorbitant price hikes to face masks as it’s a violation of their Fair Pricing Policy. It seems Amazon has warned some vendors, but not yet banned any sellers.

The biggest hero is, of course, the Chinese whistleblower Li Wenliang who was shut up by the Chinese authorities and then became a victim of the disease he had discovered. However, all the healthcare workers of the World easily qualify for the heroes list.

COVID-19 in Japan

Apart from the unbelievably clumsy incompetence shown regarding the management of the infection spread onboard the Diamond Princess ship, there is a deep and serious discourse in society.

In late February, Japan’s prime minister Abe called for the closure of all Japanese elementary, junior high, and high schools as a measure to help slow the spread of the coronavirus. Many festivals and events such as trade shows like MEDTEC 2020 in Tokyo have been cancelled or postponed. Also, theme parks such as Tokyo Disneyland, Tokyo DisneySea, and Universal Studios Japan, museums and galleries have been closed until further notice.

Japanese huge advertising company Dentsu sent 5,000 workers to work from home after one employee tested positive for the virus. Cosmetics group Shiseido decided that 8,000 employees should start teleworking. A growing number of Japanese companies are cutting most or all business-related travel and looking at various ways to. Business meetings are also increasingly moved to online platforms.

Already the old Greeks…

Let’s go back to September of last year, 2019. An article published by Foreign Policy then says what we’ve all actually known all along, that our life on Earth is under serious threat from a horrific pandemic. The question isn’t “IF” but “WHEN”. A bad pandemic can kill 80 million people and wipe out a huge portion of the global economy. That’s a serious threat to modern society, something that WHEN it happens, the World will never fully recover from. The Secretary-General of the United Nations, the World Bank and other prominent organizations were the source of this statement. Read it! It’s important!

Even if the World has many brilliant scientists and leaders that have been trying to make governments prepare for the next bad pandemic since over 100 years ago, not much has actually happened regarding preparation. As you could see from the many disastrous and crazy mistakes made by health professionals in Japan with the ship Diamond Princess. It’s extra scary as Japan is likely the World’s best-prepared nation for anything that threatens society or infrastructure.

Our biggest hero is, of course, Dr Li Wenliang who first found the virus, sounded the alarm and was immediately silenced by the authorities in China…

“Denial is not just a river in Africa.”

As the saying goes…

Italy, Iran and Korea are three other nations that are competing with China and Japan on ineptitude, bad preparations, bad luck and bad policies. Before long, there will be many more countries added to this pitiful list. Even if China is trying hard to look like the World leader in fighting COVID-19, the facts remain that the Chinese government silenced whistle-blowers, withheld information and downplayed the threat, allowing for the early stages of this epidemic to go unchecked rather than being dealt with.


Do you remember the SARS outbreak in 2003? SARS: Severe Acute Respiratory Syndrome. It’s a Coronavirus and it affected over 8000 people in 26 countries and took 6 months before it was finally contained. The containment could happen primarily because patients only became contagious after one week of being sick. Now we are meeting with SARS’ upgraded evil twin: SARS-CoV-2. This new SARS is contagious before patients become sick and have already affected over ten times (!) as many people in half the time. Containment of the new virus has not yet been successful and it seems that the only thing we can do is to slow down its spread.

The dangers of being alive

If you compare the number of yearly deaths for different reasons, the COVID-19 number of deaths is almost insignificantly small, hardly even a blip on the screen:

Deaths per year:
Ordinary seasonal flu: up to 500,000 dead
SARS: 774 people dead in 6 months.
SARS-Cov-2: Just under 3,000 people dead in 4 months
Dengue fever: 25,000 people
Malaria: 800,000 people  (2018)
HIV: 770,000 people (2018)
TBC: 1,500,000 people in 2018 (including 250,000 people with HIV)
Measles: 140,000 deaths, mainly in young children

However, if the pandemic explodes, as many diseases have done in history, we will be looking at death tolls in the vicinity of the Spanish flu or the Black Death.

Spanish flu: 50,000,000 deaths
Black Death: 100,000,000 deaths

It’s also useful to look at some other common reasons for deaths among people on this planet:

Road Traffic Deaths: 1,250,000 deaths
Smoking: 7,000,000 deaths
Obesity: 2,800,000 deaths
Alcohol: 3,000,000 deaths

A bad pandemic will take more lives than all of these deaths combined!

It will be disastrous if SARS-CoV-19 kills as many people as the Spanish flu did. It is a terrible possibility and a scenario we need to be prepared for.

But why wasn’t this heard and all necessary precautions put in place already after the Spanish flu in 1920?

…and why only now, as the virus says: “told-you-so”? Denial may be one important explanation model. “Not-recently-seen-in-my-backyard” may be another important factor as to why so little preparation has actually been executed. For instance, Sweden woke up only yesterday.

What is a typical (?) politicians way of thinking: “If I push on the popular issues instead of the boring and expensive long-term issues, I can be re-elected.” And the typical voter’s way of thinking: “I want what is good for me and I want it now!” Our political systems usually suffer from shortsightedness. This is because it’s quite risk-free to wager that something bad that didn’t happen in the last 15 years, also won’t happen in the near future.

It also seems that the organizations against CO2 and other issues on the top of the agenda are screaming so loud that not much else gets through for those “not-in-the-know” of microorganisms, virus and disease. Not saying that we should not make efforts to keep our planet healthy, but we need to balance it with keeping people healthy as well.

Luck runs out

The very real and the very dangerous recent outbreaks of SARS, MERS and Ebola, to mention a few, should have sounded everybody’s alarm clocks. Those outbreaks managed to be contained, a lot thanks to sheer luck. However: Luck runs out. The SARS-CoV-2 is maybe the villain that beats humankind’s lucky streak?

Juicy headlines tend to be the foundation for both private and political decisions. Unfortunately, this isn’t so for facts.

Healthy humans on a healthy planet

Imagine if we halved our financial efforts with the CO2 issues and instead invested that money in preparing for pandemics and fighting infectious disease. Simply put, it means curing and getting rid of HIV, TBC, Measles, Polio, Dengue, Malaria, Zika and the other main killing infectious diseases. If we decided to do this, we could actually do it. Compared to other issues, the solutions are quite affordable. Before the year 2100, we could then have saved 250 million lives plus massively impaired the death toll of future pandemics. This further means we would vastly improve life expectancy and quality of life for all people on this planet. It is possible that climate change could curb those positive effects to some degree, but not very much.

A terrible truth is that alarmingly few long-term precautions have been taken by governments even in the light of the recent years’ close calls. However, we can also put the blame on ourselves for not help to make the fight against microorganisms and virus a global key priority.

If COVID-19 spreads globally and deeply into all populations: It will almost surely affect how we all live our lives for the next 6 months or so, it will almost certainly kill some of our near and dear, and the Coronavirus will almost certainly continue to disrupt business on a grand and global scale.

Let’s get back to basics:

What’s a Pandemic?

Such a Jeopardy answer, of course, follows the statement: an epidemic disease that is spreading across multiple continents, or worldwide.

Flu pandemics are generally excluded from this definition as they are thought of as recurrences of seasonal flu. Throughout history, there have been a big number of pandemics, such as smallpox, leprosy and tuberculosis. One of the most devastating pandemics was the Black Death in the 14th century, which killed an estimated 100–200 million people. The only current pandemic is HIV/AIDS, which started in the 1980s. Other recent pandemics include the 1918 influenza pandemic (Spanish flu) and the 2009 flu pandemic (H1N1).

…and now it seems we may soon add COVID-19 to the ugly list of pandemics…

So that we don’t forget: Ebola, SARS, MERS, Zika, Bird flu and others have come very close to becoming bad pandemics. But, heroes worked hard and … humankind was also lucky.

Pandemic – Endemic? What’s the difference?

It is important to remember that widespread disease can also be endemic (meaning in a steady-state, not increasing in the number of affected people) like chickenpox in Europe. It’s a disease that is stable in terms of how many people are getting sick from it. Endemic doesn’t count as a pandemic.

Among the endemic diseases plaguing us, we find terrible members such as TBC, Malaria, Leprosy, Measles, STD’s and the whole alphabet of Hepatitis.

What are we seeing with the new Coronavirus, the SARS-CoV-2?

We may very well be witnessing the onset of a bad pandemic at this moment in time. SARS-CoV-2 is obviously a deadly viral disease that we so far have not been able to contain. How deadly the virus is, is not known yet, but it’s fair to assume that it’s more deadly than the average seasonal flu. It clearly is much more dangerous the older you are and if you have other complications. Many governments, ministers and ordinary people still seem to be perplexed or in denial, possibly hoping for this nightmare to go away auto-magically. Hoping and worrying are both useless because reality needs to be dealt with.


The difference between anti-waxers and flat-earthers is that the flat-earthers in a worst-case-scenario can contribute to confusing other, sane, people. On the other hand, the anti-waxers pose a real danger to themselves, their children and society. That’s because they allow really dangerous bugs to continue circulating in society for a number of silly and non-scientific ideas.

As we still don’t have a vaccine for this new virus, it means that us ordinary people will fare as poorly as the anti-waxers. To be as poorly prepared as the anti-waxers and to die in equal proportions is a terrible thing. The balance is usually heavily skewed towards the anti-waxers doing the main-part of the dying.

Do you remember from your history lessons that the Catholic Church were among the first and strongest anti-waxers after Jenner invented vaccination for smallpox by inoculating cowpox in people? Their argument: Humans shouldn’t meddle in God’s affairs, and it’s only good that we humans suffer, as suffering brings us closer to God. That’s quite a tricky one to translate into an ethical statement.

It’s much more straightforward to argue the ethical correctness in preferring the heroism of the people and organizations that sequenced the SARS-CoV-19 virus genome, that have made their databases available in the public domain, produce SARS-CoV-19 vaccines and look for antivirals. Can’t help putting the hero-sign up also on Sharp’s initiative to start mass-production of facemasks in a TV factory.

“Heroes are heroes because they are heroic in behaviour, not because they won or lost.”

Nassim Nicholas Taleb

Sources: The New England Journal of Medicine, World Bank, Foreign Policy, New York Times, Japan Travel, Financial Times, Vox, BBC, In-Pharma Technologist, The Verge, The Guardian, Wired, Wikipedia, CNBC, Genetic Engineering & Biotechnology News (GEN), McKinsey and WHO.

Suggested further reading

Closed attractions in Japan, updated list here.

BBC All about the Novel Coronavirus

VOX The travelguide for Coronavirus times

If you want to be really scared, check out this TED Talk on How synthetic biology could wipe out humanity — and how we can stop it by: Rob Reid.

Coming soon: The podcast on doing business in Japan

Podcast Japan - What could possibly go wrong?

Japan – What could possibly go wrong?

We are soon launching our podcast. There are some technical issues that remain. We have a great lineup of amazing people sharing their views, experiences and insights with you on doing business in Japan.

Focus is on how to make your business grow in Japan, mistakes that great people have made in Japan and some amazing gems on how to grow as a human being.

Our amazing friends share not only their success stories but also their mistakes and shortcomings. This adds up to a lot of things to learn and to enjoy!

Stay tuned and buckle up! There are great lessons to be learned!

Our first interview is with Calle Eklund, Swedish national and CEO of Hoganas Japan K.K.

Calle Eklund, CEO of Hoganas Japan K.K. in his friendly office in central Tokyo.

Stay tuned!

Relaunch ! ! !

The new beginning for our homepage

Our homepage fell victim to hackers in the end of 2019. As useless as the attack feels, it taught us some important lessons regarding backups and the extent of our own responsibility. Hopefully, this means we’ve learned how to deal with and to mitigate the things that are not predictable and have very little bearing with doing business.

It has taken us some time to create our new page, but here it is!

From now on, we will follow our safety protocols and regularly update plugins with regular virus and malware scans PLUS regular complete backups that we never delete.

Let 2020 be great and safe!