Language hurdle for entrepreneurs

There are many hurdles when establishing your business in Japan beside taxes. For example, they might be connected to land and leasing agreement, financial issues or forming a network with local Japanese people.

The above-mentioned hurdles are common for foreigners, but there is another issue for people who conduct their business in English: Japanese 'Kanji'. The acceptability and viability of your applications and contracts depends on your ability to read and use Kanji.

For instance, a government institution called JFE (Japan Finance Corporation) is a well known bank which finances general loans without collateral and joint guarantee. However, the application forms and the assessment processes are entirely written and performed in Japanese so a certain level of Kanji-knowledge is required.   

Contracts are always written in formal Japanese, which is not easy to read even for an average Japanese person - least of all an English-speaker with no Japanese experience.

Here is an idea of the amount of Kanji which you would need to remember if you wanted to conduct business in Japan on your own. Learning 'Kanji' starts at the age of seven, in the first semester of elementary school. Through the following process, children remember about 1000 Kanji in the period of six years.

Kanji taught in Japanese primary school

Yr/AgeKanjiTotalKanjiTotal
1st year (7) 80804th year (10)200640
2nd year (8)1602405th year (11)185825
3rd year (9)2004406th year (12) 1811006

Japanese Language Proficiency Test

GradeKanjiLevelGradeKanjiLevel
4th 1322Jnr HS2nd 1945Snr HS
3rd1608Jnr HS GradPre-1st3000Uni/Soc
Pre-2nd1945Snr HS1st 6000Uni/Soc

Kanji needed for everyday use consist of 1945 letters, so an average business person needs to know about 3000 Kanji characters and 10,000 kinds of pronunciation.

Even if English-speakers remember 10 Kanji characters every day, it would take more than a year to master an average business person level. Moreover, if you also commit to learning pronunciation it could take two more years.

Clearly it would be better for foreign interests if Japanese companies would present their materials in a bilingual fashion, but most documents such as invoices and receipts are written in Japanese only. It is not common to negotiate business conditions in English, except with large or west-armed companies.

David Otani