On 21 March, the House of Commons was presented with the government’s budget proposals. They continued the clear message that Britain is open for business.

The stated aim of the government is to have the most competitive tax regime among the 20 major economies represented by the Group of Twenty Finance Ministers and Central Bank Governors (G-20), and this seems to be becoming a reality.

The most significant changes to the UK corporate tax system, introduced over the past few years or soon due to come into force, include the following.

• Continued reduction in the main rate of corporation tax to 22% from 1 April 2014, the lowest among the Group of Seven (G-7) and the fourth lowest among the G-20 nations. The rate is now 24% and was 30% before April 2008.

• Introduction (from 1 April 2013) of an enhancement to the already attractive R&D tax incentive, changing it to an “above the line” credit, which should be repayable for loss-making companies. The incentive will offset directly the cost of undertaking R&D (rather than be a reduction of the tax charge), as requested by business.

• A Patent Box regime (from 1 April 2013), whereby qualifying Patent Box profits will be taxed at a significantly reduced rate of 10%, to encourage development and exploitation of patents and other intellectual property.

• An exemption system for dividends received by UK companies, and gains made by UK companies on the sale of substantial shareholdings in trading companies.

• An elective exemption system for overseas activities of UK companies (overseas branches) and a reformed Controlled Foreign Company (CFC) regime that will only tax profits artificially diverted from the UK.

These changes have resulted in the tax system becoming more territorial and making the UK an attractive location for regional holding companies, acquisition companies and publicly listed parent companies.

The UK also has a number of long-standing attractive features, including being the G-20 country with the most double-tax treaties and the absence of a withholding tax on dividends paid by a UK company.

The authorities have also changed their attitude towards interaction with business. Over the past few years, a more collaborative approach to formulating and enforcing tax legislation has been introduced. This is evidenced by the early publication of draft legislation and multiple consultations on significant new legislation (e.g. the Patent Box).

Japanese businesses have been involved in the recent consultations and, as a result, particular requirements of Japanese groups have been taken into account in the design of legislation. The UK tax authorities are now much more willing to discuss issues with businesses and to provide certainty in advance regarding tax concerns, particularly when companies are considering moving activities or investment to the UK.

As a result of the changes to the tax system, the UK has become a more attractive location for high tech businesses, including many Japanese companies. The combination of the reduced main corporation tax rate, Patent Box and R&D incentive means that high-tech companies can achieve an effective tax rate of about 10–15%. The implications of this on the Japanese CFC regime rules need to be considered, but should be manageable if there is significant business activity in the UK.

Therefore, the UK could be a low-tax principal, R&D hub or management centre in the same way as Ireland, Switzerland and the Netherlands have been in the past. When combined with the various long-standing features—highly skilled labour force, European financial centre, stable legal framework, central time zone, use of the English language, etc.—the UK is a very attractive investment location for Japanese and other international businesses.

Time will tell whether these measures will have the desired effect of attracting investment, generating growth and jobs. However, the initial signs are good with a number of announcements of increased investment, particularly by Japanese businesses.

The message from the government seems to be clear: the UK is an attractive place to undertake business and the government will do all it can, even in the current tough economic times, to further invigorate innovative activity.

As the largest global provider of flexible workspaces, Regus plc each year helps more than 1mn customers focus on their business, rather than the location from which they manage it.

Established in 1989, Regus operates at 1,200 locations in 95 countries by offering a variety of modern, efficient and versatile spaces and business support services, including offices, meeting rooms, business lounges, reception facilities, phone messaging services and video communication studios.

With 27 locations in Japan alone—including a new centre in Sapporo—Regus has selected prime-location properties in city centres, commercial districts and business parks, all with excellent transport links.

As a Regus customer, you may choose a business hub to suit your needs from 18 locations in Tokyo and Yokohama, all situated a short walk from major train or subway stations. You may gaze at the capital city’s landmark Tokyo Tower from Roppongi Hills; on a sunny day be inspired by views of Mt Fuji from Shinjuku Park Tower; or work in the centre of business, culture and nature at the Imperial Hotel Tower’s Hibiya Centre.

Whether starting your own business, operating an SME, or working at a busy multinational, Regus offers an extensive choice of workplace products and services that will enhance your ability to carry out business effectively.

Business World

This membership programme, which costs from just ¥2,800 per month, allows you access to a professional and stylish business environment wherever and whenever you need it. You may make effective use of your time between appointments at Regus business centres, private offices with full IT facilities, business lounges and cafés in 550 cities around the world. A revolution in mobile working, Business World offers four levels of service for just one hour—or on a daily basis.

Virtual Offices

A Regus Virtual Office gives you all the benefits of a fixed office, without the actual office. A prestigious business address with a local contact number answered in your company name can give you a big advantage in the business world. With access to all of the Regus Business Centres worldwide, our professional teams will manage and forward your calls to a specified phone number and handle your mail. Alternatively, you can use a private office at the business centre of your choice up to five times per month with Virtual Office Plus.

Rental Offices

Regus rental offices are located at excellent locations in high-grade buildings near major train or subway stations, and are available for rent for a few hours or days, months and even years.

Each rental office is fully equipped with office furniture, telephones, IT network, photocopier, facsimile, reception desk and café—and you can move into one immediately. Regus has flexible options to suit any budget and working style. It can offer single rooms or space for 100 people, with no deposit or key money required.

Meeting Rooms

Regus meeting rooms allow you to meet in person or via video, thereby providing a productive space wherever and whenever you need it. Whether you’re meeting clients, giving a presentation or catching up with colleagues over a great distance, Regus meeting room facilities can be booked for as little as one hour.

For meeting rooms, boardrooms, training rooms and video communications Regus provides a dedicated support team, internet access, telephones, an LCD projector and screen, as well as catering services.

Video Communications

Even if you’re thousands of miles apart, Regus Video Communications allows you to meet face-to-face. Meet anyone, anywhere, any time with Regus Telepresence and Video Conferencing facilities.

You can make decisions more quickly, save money on flights and hotels, and connect to one or more of the 1,200 Regus centres worldwide. Telepresence uses advanced internet technology for smooth viewing, high-definition video and life-size images, with surround sound and “in-desk” screens for a controllable viewing experience.

The Regus network of videoconference suites offers full technical support, with the latest technology and 24-hour booking for worldwide coverage.

Japan was the world’s second-largest economy for more than 40 years, until it was overtaken by China in 2010. After the early 1990s, Japan experienced what some have called a lost decade, during which time the economy stagnated and growth was substantially lower than before. Over the same period, real estate prices continued to drop, eventually settling at one third of the peak prices recorded in the late 1980s.

When, after restructuring, real estate business started to pick up again, it was a totally different market. In the wake of World War II, Japan’s real estate prices rose steadily, due solely to the macro economic trend.

However, real estate prices at the turn of the 21st century were heavily dependent on such factors as location, usage and money invested. Thus, while most real-estate players could easily be winners up until the 1990s, since then there have been both winners and losers.

The post-bubble recovery

From 2000 until the financial crisis in late 2008, the real estate investment and residential markets experienced a substantial recovery. Thus, in 2009, the value of the most expensive commercial land in Tokyo was nearly the same as it had been at its peak in 1990.

However, once the current economic crisis took hold, institutional investors, who had previously played a major role in the transaction market, became very conservative. The impact this had on the global economy was so serious that real estate transactions decreased drastically worldwide.

Due to the euro crisis and the strong yen, the Japanese economy again entered a grey zone, its situation exacerbated in 2011 as a result of the Great East Japan Earthquake, resultant tsunami and the nuclear power station disasters. In addition, the production lines of many Japanese corporations were hard hit by the severe flooding in Thailand’s major industrial zones.

A New Japan?

One might well wonder whether Japan is losing its position in the global economy. Considering the three expressions that signify the economic presence of Japan—“Japan Bashing” in the 1980s; “Japan Passing” in the 1990s; and “Japan Missing” so far this century—we ask if Japan will be left behind China, South Korea, India, Taiwan and other Asian countries?

The answer is yes—and no. Yes, because Japan will no longer be able to achieve its earlier high level of economic growth. And no, because Japan is capable of enhancing its mature economy at a sustainable pace.

Although the problems related to ageing and depopulation that face Japan will weaken the country—as also the real estate market—domestic and foreign long-term investors have recently been returning to the property market, possibly attracted by promise of the nation’s post-quake recovery.

Market moving forward

According to major developers in Tokyo, there has been a recovery in sales of new condominiums, particularly those in centrally located, earthquake-resistant high-rise structures.

With consumers having awoken after a year of restraint, April saw a number of major commercial complexes open, including the Mitsui Outlet Park Kisarazu, Tokyu Plaza Omotesando Harajuku, Diver City Tokyo Plaza and Shibuya Hikarie.

Value of real estate today

The real estate market here used to be criticised by many global institutions for its lack of transparency. However, the situation has improved and the market is much more transparent than before. Now, the Ministry of Land, Infrastructure, Transport and Tourism provides real estate sales data online in Japanese and English, while the Association for Real Estate Securitization provides comprehensive investment property information in both languages.

Unlike the easy days of the 1980s, however, asset values have become a more complex issue than before.

“People who live in glass houses shouldn’t throw stones”. Shouldn’t there be a similar aphorism for people who build increasingly higher structures in earthquake zones? Were there such a thing, no doubt the late Minoru Mori (24 August 1934–8 March 2012) would have had a ready answer.

Mori’s vision of creating a world of vertical garden cities has been explored, admired and respected (and, it has to be said, in some quarters criticised) for decades, and as an articulate defender of that vision and what it meant for people living in cities, he frequently was the subject of media interviews.

Now there is a definitive English-language exploration of what Mori intended and how he believed it would radically change urban life-styles—and for the better.

Since the concept for the design of Mori Hills was launched, many issues have been raised in the public forum. Is the acquisition of large swathes of city land at the expense of small domestic and commercial communities ethical? Do such large-scale projects damage or benefit the environment? And what about the social responsibilities of those who would seek to make revolutionary changes in terms of city planning?

In Mori Building, which comfortably addresses most of these issues and more, powerful and influential building tycoon Mori is not afraid to answer his critics in a well-researched and considered way. It is especially interesting to read how the concept of double-deck lifts (two vertically connected cars that stop at two floors simultaneously) came into being.

Interestingly, at the time the English-language version of the book was being prepared, the Great East Japan Earthquake struck, and so the book incorporates a fascinating prologue that centres essentially on what happened at the Roppongi Hills complex. It makes for intriguing and reassuring reading.

Somehow comforting, albeit in a naive way, are seemingly small points, such as the fact that in the 51st-floor Roppongi Hills Club, not a single glass or piece of crockery was broken. At a time when we are told to expect further major tremors, it is greatly to be hoped that other building managements are as equipped and prepared as are the Mori Building Co.

March Was Made of Yarn
Reflections on the Japanese Earthquake, Tsunami, and Nuclear Meltdown
Edited by Elmer Luke and David Karashima
¥1,800

Certain events have such a profound effect that the dates associated with them become iconic. We all know where we were when JFK was assassinated; man first walked on the moon; planes hit the New York Twin Towers.

Now among these events, the Great Eastern Japan Earthquake, tsunami and nuclear meltdown are writ large—certainly for those of us who were on the ground then, for that ground shook as it had never in our lives shaken before, and few would wish it to so shake again.

There is no doubt that something profound happened to the national psyche as a result of the triple blow of 11 March 2011, but Japan has yet to come to terms with what that really means.

March Was Made of Yarn is an attempt to do that. A collection of non-fiction pieces, stories, poems and even manga, these reflections—on what has inevitably been named 3/11—make for sometimes uncomfortable, yet heartening reading. The roll call of the writers and translators involved is most impressive. Some, like Japanese novelist and filmmaker Ryuu Murakami, are already household names outside Japan, but even the less recognisable names have impeccable credentials—while Elmer Luke and David Karashima, as editors, have done a masterful job of bringing the whole together.

The collection is all the more powerful because few, if any, of the pieces are predictable; there is always something else going on beneath the surface. True, the disaster is the backdrop for the scenes that are played out, but the drama lies in often unexpected places. The tension on which storytelling depends, if it is good and holds the reader’s attention, is frequently cleverly generated in ways that are not immediately obvious at all times.

It is unlikely that many will have the stomach to digest this volume at one sitting, but it is an enthralling compilation of highly readable pieces that repeatedly draws in the reader.

Summer is coming! And it will be hot! Most people associate ways to cool themselves down in the summer with ice cream, tall glasses of lemon ice tea, swimming pools and, most importantly, air conditioners. However, while some classic ways to cool down can be enjoyed with negligible impacts to the environment, the reality is that we are becoming more conscious of the need to save energy. Last year’s earthquake, tsunami and nuclear disaster has set Japan on a course of reevaluating how people can save energy. Theodore Jennings, principle designer and owner of Vacation Veranda, says that creating urban balcony and rooftop lifestyle gardens is one way we can move toward cooling the environment and saving energy.

When Jennings started his balcony greening transformation company two years ago, some people thought it was a good idea but didn’t really take him seriously. Last year’s triple disaster, however, actually helped his company to grow. The Texas native and 14-year permanent resident in Japan says that although he doesn’t have the answers to everything regarding the looming energy crisis in Japan, he passionately believes that each individual and company can play a role in greening their own personal space. “Everyone seems to be waiting for the government to do something, but you can do something now yourself and have fun at the same time”.

Some people started listening to him and orders soon followed. His outdoor lifestyle garden design company’s motto is to “Escape, have a vacation in your own home!”.

Jennings’s efforts to green and beautify verandas in Tokyo hasn’t gone unnoticed. He’s been featured in the New York Times, Aera magazine and, most recently, in the Japan Times for his “out of the box” niche business concept, in the concrete jungle of Tokyo, revamping unused balcony spaces into lush outdoor lifestyle gardens. Last year, Vacation Veranda took home the silver medal in the national Hibiya Lifestyle Garden competition where it beat many large and established garden and design firms. He said he put his booth together on a shoestring budget and still won.

He mixes many natural elements such as wooden decks, potted plants, rocks, and water into his projects. Most importantly, his designs are eco-friendly. Studies show that greening balcony and rooftops significantly cuts the heat of hot concrete floors that can rise to more than twice the outdoor temperature. Greening your terrace can reduce the heat to just 5-degrees difference compared to the outside heat, or even cooler. The results mean that your air conditioner uses less power to cool your space, and that is money in your pocket!

Jennings says that although starting a new business is difficult, he’s pleased with his performance to date with 25 projects completed and more larger corporate contracts on the horizon. He’s hoping to someday achieve his goal to become the “Louis Vuitton of outdoor lifestyle garden design”.

And with the Japanese government now offering up to 50% cash back in a program to incentivize individual households and corporations to green their rooftops and terraces, maybe he will.

For more information please contact:
Tel: 090-5211-0053
Email: info (at) vacationveranda.com
Website: www.vacationveranda.com

Believe it or not, this ancient Chinese art is practical for business

Whether people believe feng shui actually influences events or is superstitiousnonsense, even cynics cannot deny its real benefits in the office, especially if you have Asian staff or clients who visit.

After all, Donald Trump, the property developer, consults masters of the traditional Chinese practice to make major structural and design decisions—if only for potential tenants and valuable Asian business.

Feng shui is too complex to explain in full detail here, but I wanted to share with you a recent consultation I gave during a visit to Custom Media, publishers of BCCJ ACUMEN. My first impression was that it looked and felt good. Located on a quiet road, the redbrick building with gold-coloured letters suggested solid and successful.

The tall and wide ground floor windows were filled with green trees from the sprawling grounds of Akasaka Palace opposite and the office glowed in warm natural light. Inside, the soothing view and gentle flow of energy fully compensated for the irregular shape of the office—feng shui followers prefer square or oblong—which creates practical and pleasing spaces for different departments such as editorial, design, business, reception and boardroom, etc.

But there was a nasty corner: the 45-degree edge of a wall jutting towards a desk was soon fixed by moving a pot plant a few inches. I also suggested for this relatively remote spot more light and an aquarium or other water feature, and maybe some music to boost energy flow.

After learning the birthdate of the desk’s occupant, I consulted my compass and moved his computer slightly to face the large window at south-west, rather than a dull corner with a cupboard facing his unlucky east. This meant slightly moving his chair and a few things on his desk, but he soon saw the light. The occupier later revealed he was born in the south-west of his country. Coincidence? You decide.

The specialist recruitment firm that Robert Walters set up in 1985 today has 48 offices in 23 countries and plans to start operations in Munich and Rio de Janeiro in the near future. Since 2000, when Robert Walters plc opened in Tokyo, it has become the group’s third-largest office in terms of revenue, and was recognised as the Company of the Year at the BCCJ 2011 British Business Awards.

Are Asian economies slowing?
Since our industry does not mirror GDP statistics, any slowdown hardly matters. We deal with international, bilingual professionals and Japan is the third most profitable country for Robert Walters.

Over the past 10 years, the economy here has lacked vibrancy, yet demand for professionals has remained high. We have grown from a one-person office to one of Japan’s largest global recruiters. Looking back 12 years to when I first came to Japan, it is hard to believe that the job-for-life mentality of those days has changed so quickly.

What further economic changes do you expect in Japan?
The message is mixed. While, for cost considerations, many banks and corporations are moving their head offices to Malaysia and Hong Kong, for example, other firms are vigorously internationalising, so there is a push and a pull. Forecasting Japan’s future is tricky but, I expect, it may become the world’s largest market. There is huge potential here for us: were we not to triple our business in three years’ time, I believe we will have missed a trick.

How might the skills shortage affect Japan and the UK?
Two points are relevant to mature markets. First, life is becoming more complicated as legislation increases, and the new laws require the services of experienced professionals.

Second, over the coming 15 years, there will be a shortage of people between the ages of 20 and 40. Even now, there are not enough people with the required skills and technical abilities, and the International Labour Organization predicts a further 17% decline in this age group between 2005 and 2020, but the gap cannot be filled by simply throwing bodies at the problem.

What challenges face a firm entering a new market?
They include bureaucracy, corruption in some countries, a different culture, licensing requirements and the acquisition of local knowledge. An understanding of the market is needed: many companies have entered foreign markets with little sensitivity and have failed. Maybe it’s our imperial heritage, but we Brits are good at understanding foreign markets and adapting our behaviour.

What would you advise to overcome the hurdles?
The challenges are mitigated by the way one enters a country, so we try to have a country’s nationals run our local businesses. Although we often start a new business with an expat, we are keen for locals to take over, so that our DNA is established in the local environment.

As an example, take Japan. The intention is to triple the size of our Japan operations, so the staff—with Japanese now accounting for nearly two-thirds of the Tokyo complement—ideally should comprise a mixture of Japanese and international individuals.

How do you maintain standards of quality worldwide?
It’s the attention to detail. Every six months, I meet the reception staff in London to discuss interview room utilisation rates and how quickly phones are answered.

With each of our offices worldwide in a prime space, we seek to put forward the best possible image. As organic growth is transferred to other offices, continuity and conformity are created, ensuring that the heart of each business is the same.

We have 48 offices around the world, and in each of them you will find the same furniture, branding and quality of reception. It is important that my vision cascades down through the layers of management and be understood. Since we do not produce a physical product, our service is measured in terms of first impressions: our web site, the first phone call and our iPhone apps. These factors are important to getting, and staying, ahead; thereafter it’s just a case of getting on with the job and meeting local requirements.

How important is Japan to your business overall?
When I first came to Japan, I decided—based on one client’s suggestion—to open an office here. It was not cheap to do so, but we pressed ahead and the business became successful.

From the earliest days, I saw that this is an unusual place. It has a magnetism that is quite extraordinary and is of interest in our world of recruitment, right now being the hottest spot anywhere. With the employment system changing and an ageing population of 130 million, everything about Japan seems to be in our favour. We are the biggest professional recruitment firm here and, if we continue expanding, Japan soon will be the largest office in the Robert Walters group.

As British ambassador, I always enjoy the opportunity to speak to Japanese audiences about my country today. And, while I greatly respect the affection that I know many Japanese feel for the traditions of Britain, I also try to give an impression of how Britain has changed during my lifetime to become a more diverse and more innovative society. This is as true of the Diamond Jubilee as it is of other manifestations of modern British life. This is a Jubilee of the digital age, as you can see through social media and at the official Diamond Jubilee website.

For those of us not living in the UK, the Royal Commonwealth Society is inviting people around the world to share their memories and stories of the last 60 years to create a digital Diamond Jubilee gift for Her Majesty. You can find out more on the Jubilee Time Capsule website.

The Jubilee celebrations come during a very exciting 2012 for the UK. In only a few weeks’ time, London will host the 2012 Olympic and Paralympic Games. I am sure that the millions who visit to experience the games at first hand will also discover why Britain is one of the most exciting places in the world in which to live and work.

Many in Japan already know this. There are over 1,200 companies from Japan employing more than 130,000 people in the UK. London is the world’s leading international finance centre, where all the major Japanese financial companies are represented. Britain is a top destination for education and tourism, with over 400,000 young people going there to study and 13mn tourists each year.

But we want to take this further. During the recent visit to Japan by Prime Minister David Cameron, we launched the GREAT campaign here by briefly turning the iconic Shibuya crossing into a little corner of Britain. The prime minister’s visit also produced a Joint Statement that reflects the commitment of both countries to strengthen further our close links in many areas, across an ambitious agenda of new co-operation. I’m very pleased that BCCJ ACUMEN is publishing the text of the statement in this edition.

And I would like to take this opportunity to wish the members of the BCCJ and the readers of ACUMEN a great summer and, of course, a wonderful Jubilee weekend.

Too late to make this issue of ACUMEN, meanwhile, Sir John Major spoke at a BCCJ luncheon on 8 May, with his vast array of credentials and experience suggesting a very stimulating occasion. ACUMEN did have a presence there, so we will feature a full report in the June issue.

After all the serious politics, softening this issue a bit—if softening is the right word—is the incredible adventure of our indomitable cover girl, Sarah Outen. She is now paddling furiously and alone across the Pacific Ocean, focused on reaching Tower Bridge in London, her starting point of more than a year ago. As Sarah waited for the wind and rain to stop before departing from Japan, she shared with ACUMEN her darkest (and most unlikely) fear. She’s probably reached Okinawa by now—if she’s rowing that way—which is very fitting, since we found three British entrepreneurs there who have been living the dream since washing up on the tropical island several years ago, after rejecting big city lifestyles.

Finally, there are more UK-related events scheduled in Tokyo, so please don’t hesitate to apply for the free tickets we are offering.