Reducing barriers in Japan

We brought together over 30 Japanese and UK law firms at a virtual roundtable on 23 May to renew the focus on improving market access for foreign firms in Japan.

Delegates were joined by the director of trade and investment for Japan and deputy trade commissioner for North East Asia, Darren Goff.

He set out the UK government’s trade plan for Japan, which focuses on defence, decarbonisation, digital and services.

The state of the Japanese market

Delegates identified the key needs in Japan as the desire to:

• digitise
• internationalise
• ease restrictions
• protect services

Japan is rapidly increasing its digital services and, with an increase in exports very likely, there is also a focus on Japan as an international financial hub.

This push is creating opportunities for complementary industries, including legal services, management consultancy and accountancy – all areas where the UK performs strongly.

Financial, professional and business services dominate our exports to Japan, with legal services making up a large part of this.

The focus of the Department for International Trade’s (DIT) team is to:

• support UK law firms already operating in Japan
• identify opportunities for new law firms to enter
• identify and resolve market access issues that may be preventing UK law firms from operating and winning business

Since the signing of the bilateral free-trade agreement (FTA) in 2020, there has been a lot of work in this area, including on:

• the Comprehensive Economic Partnership Agreement (CEPA)
• the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
• economic and geostrategies

Most views on the CEPA agreement look to ease market access barriers, which is a priority for the British Embassy in Japan.

The embassy’s implementation committees will hold annual meetings, with opportunities to raise concerns and issues to get the most out of the Japan FTA.

In addition to leading on the bilateral trade policy relationship with Japan, trade policy teams are coordinating activity in other Asia and Pacific CPTPP markets.

CPTPP accession is not just a DIT goal: membership will be of huge economic and geostrategic importance.

Alongside these developments, Expo 2025 is taking place in Osaka which will be a space where eight billion people from around the world view exhibits and co-create Japan’s future society.

An online platform for sharing challenges and solutions from around the world will be launched and cutting-edge technology will be shared and used to create new ideas, to help resolve global issues facing humankind.

How are firms finding operating in Japan?

Foreign lawyers in Japan face significant registration requirements before they can practise under their home title.

In contrast, foreign lawyers can practise with minimal regulations or requirements in England and Wales.

One of the most critical issues for foreign lawyers practising in Japan is the 180-day requirement to reside in Japan.

Combined with difficulty obtaining visas and travel restrictions – which have further tax implications if a lawyer cannot travel in the required period – this has led to recruitment difficulties.

Some recruitment has taken up to two years due to travel issues.

The number of documents required for registration as a foreign lawyer adds to the heavy regulatory burden and can make it more difficult for those who want to stay longer in Japan and contribute to the market.

Despite this, some flexibility has been exercised by authorities in Japan during the COVID-19 pandemic.

What we’re doing to help

We work closely with the British Embassy in Japan and the British Chambers of Commerce in Japan to:

• identify the barriers faced by the legal profession in Japan
• help members to prioritise these issues and engage the Japanese government and regulators to find solutions
• promote opportunities to members interested in the market

In the meantime, we hope Japan will ease its travel restrictions soon and hope to increase market access for firms moving forward.

We have a productive relationship with the Japanese Federation of Bar Associations (JFBA) and the Dai Ichi Tokyo Bar Association.

We also have a close relationship with the UK Ministry of Justice, who work alongside us to encourage internationalisation of legal services around the world.

If you're interested in getting involved in our work in Japan, email international@lawsociety.org.uk.