Solid Japan Newsletter – July 2009

Government Introduces New Tax Measures for SMEs

To help provide stimulus in the economic downturn, an additional tax reform bill was recently passed by the Diet. The following are two key changes:

1.   Increase in amount of deductible Entertainment Expenses for Small and Medium Sized Companies

Prior to the tax reform bill, the deductible limit of entertainment expenses for companies whose paid-in capital is JPY 100 million or lower was the lesser of JPY 3.6 million or 90% of the actual entertainment amount. The new amendment raises this to JPY 5.4 million or 90% of the actual amount. This amendment will apply for fiscal years ending on or after April 1, 2009.

2.   Carryback of Losses Refund

Small and Medium-sized companies filing Blue Form returns may be eligible to claim a refund for a portion of the corporate taxes they paid last year if they will be in a loss position this year. This applies to companies with fiscal years ending after February 1, 2009. In order to receive the refund, companies must submit an application form to their tax office within the fiscal year they recognize the loss. The basic formula for calculating the refund is: last year’s corporate tax paid amount X this year’s loss /last year’s profit.

Economic Indicators on the Rise in Japan

Japanese consumer confidence was on the rise again in June, perhaps indicating that the worst fears about the recession are behind us. The household confidence index edged up to 37.6 in June from 35.7 in May. Another encouraging economic indicator is the factory output index which shows that factory output rose 5.7% in May, its third straight monthly increase.

Solid Japan Launches New Website www.solidjapan.com

We are pleased to launch our newly re-designed website. With a fresh, clean look and easy to navigate information bars, we hope you will visit our new site often. iPhone users can also add the new Solid Japan iPhone button by visiting www.solidjapan.com and pressing the “+” button at the bottom of the screen.

Solid Japan Founder Featured on itv-asia.com

Solid Japan’s Managing Director Robert Crane was recently interviewed for the Business Entrepreneur’s section on the itv-asia.com website. itv-asia is a leading resource for business information in the Asian region. The topics discussed in the segment include the process for setting up businesses in Japan, and Robert’s experiences helping foreign businesses get started. The interview hosted by Dave Mori, is expected to be posted on the itv-asia website in the coming days.

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Solid Japan Newsletter – July 2009

Solid Japan Launches New Website www.solidjapan.com

We are pleased to launch our newly re-designed website. With a fresh, clean look and easy to navigate information bars, we hope you will visit our new site often. iPhone users can also add the new Solid Japan iPhone button by visiting www.solidjapan.com and pressing the “+” button at the bottom of the screen.

Solid Japan Founder Featured on itv-asia.com

Solid Japan’s Managing Director Robert Crane was recently interviewed for the Business Entrepreneur’s section on the itv-asia.com website. itv-asia is a leading resource for business information in the Asian region. The topics discussed in the segment include the process for setting up businesses in Japan, and Robert’s experiences helping foreign businesses get started. The interview hosted by Dave Mori, is expected to be posted on the itv-asia website in the coming days.

Government Introduces New Tax Measures for SMEs

To help provide stimulus in the economic downturn, an additional tax reform bill was recently passed by the Diet. The following are two key changes:

1. Increase in amount of deductible Entertainment Expenses for Small and Medium Sized Companies

Prior to the tax reform bill, the deductible limit of entertainment expenses for companies whose paid-in capital is JPY 100 million or lower was the lesser of JPY 3.6 million or 90% of the actual entertainment amount. The new amendment raises this to JPY 5.4 million or 90% of the actual amount. This amendment will apply for fiscal years ending on or after April 1, 2009.

2. Carryback of Losses Refund

Small and Medium-sized companies filing Blue Form returns may be eligible to claim a refund for a portion of the corporate taxes they paid last year if they will be in a loss position this year. This applies to companies with fiscal years ending after February 1, 2009. In order to receive the refund, companies must submit an application form to their tax office within the fiscal year they recognize the loss. The basic formula for calculating the refund is: last year’s corporate tax paid amount X this year’s loss /last year’s profit.

Economic Indicators on the Rise in Japan

Japanese consumer confidence was on the rise again in June, perhaps indicating that the worst fears about the recession are behind us. The household confidence index edged up to 37.6 in June from 35.7 in May. Another encouraging economic indicator is the factory output index which shows that factory output rose 5.7% in May, its third straight monthly increase.

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Solid Japan News

Building the Foundations of Your Business in Japan…

Volume 1, Issue 4
Introduction
Solid Japan Inc. is a complete business support solutions provider for foreign companies in Japan. We offer one-stop convenience and exceptional customer service. Solid Japan Inc. has assembled a powerful team of top-notch business service providers to help you build and expand your business in Japan. Whether you are setting up a new company, need help locating an office or apartment, filing a Japanese tax return, or recruiting capable staff Solid Japan can help. We do it all. We do it well, and we do it at competitive rates. To find out more about our full range of services, please visit our website at: www.solidjapan.com

April Rate Changes
April is the season of cherry blossoms and change in Japan and the start of the fiscal year for most corporations and government offices. As a result there are several new changes to government tax and social benefit programs beginning from this month that will have an impact on businesses and employees. Below is a brief summary of some key changes for this year.

Unemployment Insurance Rates Going Down
Despite the increasing number of people applying for unemployment insurance benefits, the government has decided to lower the contribution rates for unemployment insurance premiums. This is said to be aimed at giving companies a break and making it more affordable to keep their staff on the payroll. The unemployment insurance rates will drop from 1.5% to 1.1% (employee portion: 0.4%, employer portion 0.7%) of salary effective from April 1st. This is a temporary measure that will last for a period of one year. At the same time, the Accident Insurance (Worker’s Compensation) rate will drop from 0.45% to 0.3% of salary. Only employers pay into this program

Nursing Care Rate Increase
The Nursing Care Insurance rate for employees over 40 years of age has changed from March 1st 2009, and for most companies the deductions will begin from April’s payroll. The new rate has changed from 1.13% to 1.19%.

Corporate Tax Rate on the Way Down
The corporate income tax rate for small and medium size business will drop from 22% to 18% on the first 8 million yen of income. This new rate is applicable for companies whose fiscal year ends after April 1st, 2009.

National Pension Premiums Increasing
Premiums that individuals pay at their ward or city office for the National Pension (Kokumin Nenkin) Program will be increasing by 250 yen per month from April, and the new premium rate will be 14,660 yen. This change is only for National Pension and does not impact those enrolled through their company in the National Workers Pension Program.

Labour Insurance Deadline Moved Back
The window for calculating and submitting the annual Labour Insurance (unemployment insurance and worker’s compensation insurance) adjustment and prepayment (1st payment) report has been pushed back this year. In previous years employers were expected to make these calculations during the April- May period and the submission deadline was May 20th. This year, the Labour Insurance Office will be sending the calculation/report forms out by the end of May, and the report/payment will be due by July 10th. The labour insurance rates have also changed from April (see above).

Subsidies Available for New Business Owners
Did you know that if you are a new business owner, you may be eligible to receive cash subsidies to help get your business off the ground? A program administered by the Health, Labour and Welfare Ministry provides subsidies to help cover a portion of company set-up costs. The program is available to individuals who are qualified to receive unemployment insurance benefits and who have started their own business. The program covers up to one-third of start-up costs incurred in the first 3 months up to a maximum of 2 million yen, - or one-half of start-up costs up to 3 million yen in rural areas. The company must stay in business for more than 3 months and must enroll in the Unemployment insurance program within a year from the company set up date. Also, the owner must be the Representative of the new company and must have been enrolled in the unemplyment insurance program for more than 5 years. Certain other conditions may apply. For more information, contact Solid Japan today.
info@solidjapan.com

Business Start-Up Information Package - Only JPY25,000!
Thinking of starting a new business in Japan? Our special business start-up information package is the perfect place to begin. This is a one-hour consulting and information package that will answer all those nagging questions you have about starting your own business in Japan. Our business establishment expert will sit down with you and go through all the basics; from which structure to choose, initial setup procedures, tax and visa considerations, staff and payroll planning, IT/office setup, and expected start-up costs and timeline. We’ll also give you an information packet to take home. At only JPY25,000 you can’t afford not to take advantage of this valuable time-saving resource.
info@solidjapan.com

Solid Japan featured in Tokyo Weekender Magazine
Solid Japan Inc. and founder Robert Crane are featured in the latest issue of the Tokyo Weekender magazine. To view the article, click on the following link: http://www.weekenderjapan.com/#issue:7/page:26
One-Stop Centers for Foreigners on the Way

According to a recent report in the Mainichi Shimbun, the Ministry of Justice is establishing special “One-Stop Centers” to help foreign residents better integrate into Japanese society. The 3 centers, which will be set up in Tokyo, Saitama, and Hamamatsu - areas chosen for their relatively large foreign populations - will be staffed with cross-sectional teams and will be available to assist and advise foreign residents with all matters such as employment issues, visa and immigration problems, residency procedures and how to settle into their local communities. These issues are currently handled separately by local governments and regional immigration bureaus. The first center, in Hamamatsu will open this month.
Outsourcing Your IT or Keeping it In-House?
With the current downturn in the economy, many businesses are turning to contract or project-based IT solutions over maintaining their own in-house IT staff. Because IT is such an essential part of business these days, it is important that any outsourcing is done properly, with a full view of the costs and benefits. Companies often get burned trying to outsource their IT work to offshore countries in an attempt to keep costs low. They quickly discover that issues such as lack of local market expertise, communication difficulties, and problems trying to administer and develop IT systems from a distance can cause more headaches than it is worth.
On the other hand, local Project and Contract- based IT solutions can make a lot of sense and is fairly easy to administer. The benefits are that you can pay as you go and you get the experience and expertise of a full team, all without having to pay for training time, employee benefits, and being locked into employment contracts that are hard to get out of. The trick is choosing a skilled IT partner you can trust, and who has experience in a wide variety of IT applications. There are providers of differing levels out there, so it is important to look for client testimonials and a solid track record. Solid Japan’s IT Support Team is available to help clients on a contract, retainer or project basis. For more information, contact us today at: info@solidjapan.com

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Solid Japan News

Volume 1, Issue 1

Building the Foundations of Your Business in Japan

Introduction

Welcome to the Solid Japan newsletter. Solid Japan LLC is a complete business support solutions provider for foreign companies in Japan. We offer one-stop convenience and exceptional customer service. Solid Japan LLC has assembled a powerful team of top-notch business service providers to help you build and expand your business in Japan. Whether you are setting up a new company, need help locating an office or apartment, filing a Japanese tax return, or recruiting capable staff Solid Japan can help. We do it all. We do it well, and we do it at competitive rates. To find out more about our full range of services, please visit our website at: www.solidjapan.com

Office Rents Dropping in Downtown Tokyo

Recent data from real estate firm Miki Shoji has confirmed that office rents continued to drop in the Tokyo central business areas, while the vacancy rate rose in October. The average office rent in the main five wards (Chuo, Shinjuku, Shibuya, Minato, and Chiyoda) was JPY22,559 per tsubo (3.3 m2), with the highest average rent in Shibuya Ward at JPY23,962 per tsubo. The vacancy rate in these wards also increased 0.23% to 4.30% in October. Asking rents in prime Class A office buildings are coming down quickly. This may be an ideal time for companies looking to upgrade their current office. Whatever the stage of your business, Solid Japan’s real estate team can help you find the ideal office. Contact us today at: info@solidjapan.com

Companies to Receive Cash Subsidies for Hiring Full-Time Employees?

According to recent reports, the central government is preparing to introduce cash subsidies of up to 1 million yen per employee to small and mid-size companies hiring non-student part-timers to full-time contracts.  The plan is expected to be introduced as part of the Aso administration’s plan to stimulate the Japanese economy in the face of the global financial crisis. The plan is geared toward moving part-time or casual workers (known as “freeters”) to full-time employment. The program is expected to be funded from a special labor insurance fund, and the scale of the program has yet to be announced.

Personal Tax Tip

Did you know that even if you don’t have a Permanent Resident Visa, you might still be considered a Permanent Resident for Japanese Income Tax purposes? This means that not only do you need to file taxes and declare your Japanese income, but you also need to declare your global income from all sources as well.  Recent amendments to the tax code have changed the length of stay required to be considered a Permanent Resident for Japanese income tax purposes. Now anyone who has been in Japan for a total of 60 months (5 years) within the last 10 year period qualifies as a Permanent Resident for Tax. This change in the permanent residency requirements can have a significant impact on personal financial planning.

Are You Getting the Most Out of Your Server?

Now more than ever, companies are trying to cut costs in all departments, and IT is no exception. Many don’t realize that it is possible to cut costs, without sacrificing performance or productivity. Windows Server advanced features are rarely used. Did you know that with a simple configuration of Windows Server called “Roaming Profile”, users have the ability to move from desk to desk with all of their settings and data intact. This means that if a workstation goes down, there is no loss of data or productivity –the user needs simply log in at another machine on the local network. Another feature of Windows Server is “Group Policy”, allowing for central control of all workstations in the office. For more information on this, or other IT solutions, please contact Solid Japan at: info@solidjapan.com

Market Turmoil Creating Opportunities

With the recent turmoil in the financial markets, it’s no wonder a lot of investors are avoiding the stock markets and waiting for the smoke to clear before they make any investment decisions. On the other hand, quite a few savvy investors see the currently depressed markets (the Nikkei is at nearly a 30-year low) as a rare buying opportunity with plenty of bargains available. As the old adage goes; “It’s best to buy low and sell high”.

Solid Japan’s financial advisors say that while many clients are moving into relatively stable investments such as bonds and guaranteed investments, the long-term investors are wisely staying the course, and taking this opportunity to assess and re-balance their portfolios. Bargains are out there, but it is important that individual investors conduct their due diligence and also consult with professionals before venturing into any investment. Working with a professional tax planner as well as an investment portfolio advisor are components of any smart investment strategy. There can be additional tax and other implications for ex-pats and long-term foreign residents.

Looking to Move Home or Office?

Solid Japan offers a full complement of relocation services for foreign businesses and individuals. Working with our licensed realtor partner, one of the largest and best-known realty brokerages in Japan, we specialize in homes and offices for English-speaking clients. Whether you are looking to buy, lease, or invest, we can help you find the perfect home or office. We also provide safe and secure Japan-wide and world-wide moving services through our relocation partners. Solid Japan’s knowledgeable, bilingual staff can also help review, summarize, and translate important lease documentation and applications , while our IT Services team is happy to assist with moving sensitive computer and communications equipment and help map out and cable your new office network. If you are thinking of moving home or office, give Solid Japan a call and we will be happy to tailor a solution that fits your needs.

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