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Transcript of Tokyo Managing Shareholder, Greenberg Traurig Greenberg Traurig, LLP | gtlaw.com Title of...

  • Koji Ishikawa,

    Tokyo Managing Shareholder,

    Greenberg Traurig

  • G R E E N B E R G T R A U R I G , L L P | A T T O R N E Y S A T L A W | W W W . G T L A W . C O M

    ©2014 Greenberg Traurig, LLP. All rights reserved.

    Doing Business in Japan

    Koji Ishikawa

    Managing Shareholder, Tokyo office

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  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com

    What is Japan?

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    Some may say “the country of paradox”

    Zen Garden: Infinity in limitedness

    Noh: Stillness in action

    (Wikipedia) (Wikipedia)

  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com 7

    Haiku – Infinity in 17 characters

    Matsuo Bashō (松尾芭蕉, 1644 – 1694)

    夏草や 兵どもが 夢のあと

    Natsukusa-ya tsuwmono-domoga yumeno-ato

    Ah, summer grasses! All that remains

    Of the warriors’ dreams

    なつくさや つわものどもが ゆめのあと

    5 7 5

    (R.H. Blyth) (Wikipedia)

  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com 8

    Some may say “the country where you can apologize”

    Everybody knows your apology is moral one, not admitting legal responsibility.

  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com 9

    Some may say “the country where atmosphere rules”

    (Japan is changing but still) many things can be decided by “inaction”, or “atmosphere” in the meeting room.

  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com

    Why Japan Now?

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    (source: JETRO)

  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com 11

    http://www.jetro.go.jp/en/invest/whyjapan.html

  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com 12

    http://www.jetro.go.jp/en/invest/whyjapan.html

  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com 13

    http://www.jetro.go.jp/en/invest/whyjapan.html

  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com 14

    http://www.jetro.go.jp/en/invest/whyjapan.html

  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com

    Japanese Business Culture

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  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com

    > Some of Japanese companies are still conservative. They need precedent to do things (like judges).

    > Process and formality are important - sometimes more important than results.

    > Why so? Life time employment and relatively small compensation. Upside potential is limited but downside risk is substantial – losing job.

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  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com

    > Punctual. We make very best efforts to meet the deadline. We don’t go home or sleep if necessary to get things done on time.

    > A promise is a promise. We do as promised, even immediately after the 3/11 earthquake and nuclear disaster.

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  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com 18

  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com

    > Japanese government and private sector are generally very clean.

    > They don’t accept even small gifts (e.g., less than USD 100).

    > Sometimes too much compliance.

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  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com

    > Business mantra: “報連相 ” (hou-ren-sou), meaning “report, communication and consultation”.

    > If you say “hou-ren-sou is very important” to Japanese business partners, they will regard you as a “friend”.

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  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com

    > Japanese companies appreciate a long-term perspective.

    > We might not be good at “quarterly”.

    > But we are very good at “several hundred years”.

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    The World’s 10 Oldest Companies: 7 from Japan!

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  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com

    So, when you deal with Japanese companies…

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    > Be patient.

    > Preparation and more preparation. We love preparation – sometimes more than output.

    > We are working hard (internally), even if we remain silent (externally).

    > But, once a decision is made, we move pretty quickly.

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    > We expect you to keep the same level of punctuality and precision.

    > Japanese companies hate surprise (more than Chinese or Korean companies). Even a small surprise could kill a deal entirely.

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    > On a personal level, we are generally polite, have goodwill and friendly – some even understand humor.

    > We like drinking but get drunk easily – an open national secret.

    > If you can make them drunk, you can win business (and drinking).

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  • G R E E N B E R G T R A U R I G , L L P | A T T O R N E Y S A T L A W | W W W . G T L A W . C O M

    ©2014 Greenberg Traurig, LLP. All rights reserved.

    Contract Law

  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com

    Overview

    > The general ideas and principles of contract law of Japan are provided in the Civil Code.

    > Although Japan is a civil law jurisdiction, the Civil Code has been supplemented by over the years by court cases.

    > Consumer Contract Act is a particularly important supplement to the Civil Code.

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  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com

    No consideration is required.

    > Under Japanese contract law, the common law concept of consideration (i.e., an exchange of something of value) is not required to form a contract.

    > As a result, what would be considered an unenforceable “gift” contract in other jurisdictions is valid and enforceable in Japan.

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  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com

    No parol evidence rule.

    > Japanese contract law does not have a parol evidence rule.

    > Japanese courts may, at its discretion, look beyond the written agreement to other evidence (e.g., written correspondence or oral discussions) as the court deems necessary to confirm the intent of the parties.

    > In addition, Japanese courts have relatively broad discretion in exercising discretion when interpreting contracts.

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  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com

    Damages

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  • G R E E N B E R G T R A U R I G , L L P | A T T O R N E Y S A T L A W | W W W . G T L A W . C O M

    ©2014 Greenberg Traurig, LLP. All rights reserved.

    Employment Law

  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com

    Overview > Japanese labor laws are very

    employee-friendly (probably more friendly than PRC labor law…).

    > Decisions made by an employer that have a negative or potentially negative impact on employees are often difficult to implement or may be void if implemented improperly.

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  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com

    “At will” employment is illegal in Japan.

    > There is no concept of “at will” employment in Japan.

    > Termination of employees generally must be for cause. An employer’s right to dismiss a hired employee is severely restricted.

    > A dismissal will be invalid under Japanese law as an abuse of rights if it “lacks objectively reasonable grounds and is not considered to be appropriate in general societal terms.”

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    Reduction in force.

    > During the global financial crisis and recession, many employers considered downsizing their workforce in Japan.

    > Case law has developed four factors which must be thoroughly considered in order to justify termination based on economic conditions.

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  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com

    Reduction in force – Four Factors.

    > There must be strong economic necessity to reduce the workforce (“Economic Necessity Test”);

    > There must be necessity to terminate employees (“Termination Necessity Test”);

    > The employees to be dismissed should be selected using a reasonable and fair standard; and

    > Termination procedures must be reasonable and proper.

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  • Title of PresentationGreenberg Traurig, LLP | gtlaw.com

    Reduction in force.

    > Generally, it is not easy to prove the Economic Necessity Test and Termination Necessity Test.

    > In relation to the Econom