5. a look at japan. geography page 94 dependent on imported raw materials, fossil fuels positive...

5. A Look at Japan

Geography

Page 94

Dependent on imported raw materials, fossil fuels

Positive trade balanceUnrestricted flow of capital and financial

transactions Unique to Japanese business—the

Keiretsu

Economy and Business

Pages 95-96

Japan’s National Debt230% of its GDPOffset by trade

surplus, foreign currency portfolio

Increasing consumption tax to 10% by 2015

Investor confidence

Difficult reckoning in 10–20 years? Aging population Shrinking workforce Cost of debt service Waning export

competitiveness

Page 96

Human tragedyLost families, homes, and livelihoods363,000 buildings completely or partially destroyed; damage to

infrastructureMost expensive natural disaster in historyA decade to rebuildOpposition to nuclear power plants

2011 Disaster

Pages 96-97

Scarcity of land Many small landholders , small land parcels Land lease system Landowner maintains title to the landLeaseholder receives the right to construct and

occupy a building on it

Land Lease

Pages 97-98

No restrictions or conditions No government permission or approval Free flow of capitalMay establish a operate a business

But….Mortgage financing obstacles

Can Foreigners Own Real Estate?

Pages 98-99

Home values depreciateSell at deep discounts25-year old home has no valueMost rebuilt after 25–30 yearsNo value in quality constructionJapanese favor newPrevious owner’s bad fortune?

Secondhand Housing

Page 99

Homeownership rate—61% Small living spaces, condos—45 m2,

single family homes—121 m2Land prices barometer for new home prices1 tsubo = two standard tatami mats

(3.3 square meters , 35.5 square feet)

Homeownership Trends

Page 100

Pro-landlord, expensive process5-7 months rentKey money—thank you for privilege of renting Direct transfer of rent payments from the tenant’s

bank accountForeign Resident Registration Card

Rental Property

Pages 100-101

Real estate business licensing

Sales agent licensingMinistry for Construction

regulates commission rates

Real Estate Professionals

Page 102

Office Vacancy Rates

Page 103

Despite weak growth, favored country for real estate investmentInvestment in senior housingIncrease of vacanciesShare houses and common living2020 OlympicsAbenomicsWeakening Yen

Top Trends

Pages 103-104

Beyond the BasicsNamesInitial Contact and

IntroductionsIntermediariesBusiness

RelationshipsBusiness Cards

MeetingsDemeanorNegotiations and

DecisionsSocial EtiquetteA Few Taboos

Pages 108-112

AmaeHada to hadaNemawashiTatemae and honne

Building Relationships

Page 109

6. A Look at India

Geography

Page 116

Economic Growth—surpassing China?Growing Middle ClassHomeownership—86%Subsidies and Rising Commodity Prices Infrastructure issuesSpreading urbanization, crowded cities

Modern India

Pages 117-121

Torrential downpours 80% of the annual rainfallJune to AugustBeneficial monsoon season

bolsters the economy

Monsoon Season

Page 120

FDITop FDI Investors in India1.Mauritius*2.Singapore3.United Kingdom4.Japan5.Netherlands6.United States7.Cyprus*8.Germany9.France10.Switzerland

Top Sectors for FDI18%–Services10%–Construction Development: Townships, Housing, Built-Up Infrastructure7%–Telecommunications6%–Computer hardware and software

Pages122-123

Your Next Client?United States: 2.2 millionCanada: 1 millionU.K.: 1.5 millionS. Africa: 1.2 millionMalaysia: 2 millionSingapore: 590 thousandSaudi Arabia: 1.7 millionUAE: 1.7 million

India Diaspora

Page 123

NRIs and PIOsNon-Resident Indian

(NRI)Person of Indian

Origin (PIO)Overseas Citizen of

India (OCI) Prime source of

investment in real estate

Government encourages ties and long term investment

NRI Colonies--full-amenity communities

Pages 124-125

Diaspora pulls Indians abroadCareer opportunitiesFamily tiesImmigrationReal estate business potential

Why is This Important?

Pages 124-125

Bank Accounts

Page 125

Determines flow of funds for real estate transactionsNon-Resident Ordinary Rupee Account (NRO)

Non-Resident External Account (NRE)

Foreign Currency Non-Resident Account

(FCNR) Annual repatriation

limit of US$1million

RBI approval for repatriation

NRIs only

Funds must be from abroad

Government approval required to withdraw funds for real estate purchase

NRIs only

Foreign currency from abroad

Indian property law Maintain real property ownership by resident citizens Quell speculation

Limit ownership to Indian citizens, those with family tiesNo ownership of agricultural land, plantation property,

or a farm house

Buying Real Estate in India

Page 126

Crore and Lakh

Page 126

1 Crore = 10 Million

1 Lakh =100,000

Stamp Tax Registration FeeCapital gains tax Real estate agent feesRegistration Property tax

Transaction Costs

Page 127

Foreign Ownership?

Page 128

May purchase a residence

Prior-year’s stay of 182 days required plus proof of intent to reside in India indefinitely

Foreign Residents of Non-Indian Origin

Non-Residents of Non-Indian Origin

No purchase allowed

May rent a residential property

Maximum 5-year lease

Foreign corporations need Reserve Bank of India approval to buy or sell real property

Trend toward outlying business park developmentResidential development funded with foreign capital

requires 25 acres of land Commercial properties minimum 50,000m2

Commercial Real Estate

Page 128

Rent-control laws skew rental marketsApply to leases of 12 months or more11-month leases commonServiced apartments provide short term

housing for staff of foreign companies

Rental Property

Page 129

States regulate real estate practiceNo licensing Informal channels-homemakers, friends and relatives, kiosk

owners, and janitors National Association of

Realtors–India striving for professionalism nationwide MLS

Real Estate Professionals

Pages 129-130

Tremendous growth due to urbanization, increasing income, and FDI

Benami Transaction BillREITs and Commercial Real EstateAffordable HousingSenior Living

Top Trends

Pages 130-131

IntroductionsWomen in BusinessBusiness CardsConversation Starters MeetingsDemeanorContracts and NegotiationsA Few TaboosSocial Etiquette

Beyond the Basics

Pages 135-141

7. A Look at Philippines

Geography

Page 144

12 million Overseas Filipinos (OF), Overseas Filipino Workers (OFW)

Workers’ remittances $20.1 billion, 13% of GDP2nd largest Asian-American group in U.S.California, Hawaii, Illinois, New Jersey, New York, Washington,

D.C., Texas, and FloridaMedian household income of $78,000

Philippine Diaspora

Pages 145-146

Exports to: China, United States, Singapore, and Japan Agricultural Industrial Mining

Infrastructure impedes development outside metro areasTourism potential

Philippine Economy

Pages 146-147

Overtaking IndiaEnglish-speaking workersService attitudesLow wages & office rentsMakati City, Manila, Quezon City, Cebu CityDriving office space, residential, retail

development

Business Process Outsourcing

Pages 148-149

Cloud & Virtual WorkforceBusiness Process Management

(BPM) and Knowledge Process Outsourcing (KPO)

Disaster Planning and Business Continuity

Trends

Pages 148-149

Building for Ecologically Responsive Design Excellence

Philippine Green Building CouncilLocal green building rating systemPatterned after LEED

BERDE

Page 149

Cannot own landCondos okay if no more than 40% foreign occupancySingle-family home okay but not the landForeign natural heirs of a Filipino citizen may inherit, cannot

sell to foreignerCorporations less than 40% foreign ownership may acquire

land

Foreign Ownership of Real Estate

Pages 149-150

Influx of expatriates and retirees keeps market active

government encourages return of expatriates, those with family ties

Citizenship Retention and Reacquisition Act Special Resident Retiree’s Visa

Homeownership

Page 150

Luxury condos 2–3 month’s rent deposit Rent paid in advance, post-dated checks

Standard rental 2 month’s rent deposit

“Customs of the place“

Rental Property

Page 151

National licensing Challenge to develop the

real estate management skills

Chamber of Real Estate and Builders Association

Real Estate Professionals

Page 152

Real estate market growing and prices are rising

Manila Top Real Estate MarketASEAN Integration

Top Trends

Page 152

NamesInitial Contact and IntroductionsBusiness CardsNegotiations and DecisionsDemeanorSocial Etiquette

Beyond the Basics

Pages 156-159

8. Country Profiles

A Look at Australia Geography

22.5 million, 6 statesEconomy

Continuous growth; strong stable system

Foreign Ownership Some restrictions for

second-hand housing Agents licensed by

state/territory

Beyond the Basics Diverse and

multicultural society Informal in business

and social life

Pages 163-167

A Look at Hong Kong

Pages 169-173

Geography 7.1 million, Basic Law

Economy Expensive real estate,

stamp duty Foreign Ownership

Can buy, rent, invest Foreign exchange

restrictions for mainland Chinese

Licensed agents

Beyond the Basics Behavior and

protocol similar to China, but more relaxed

A Look at Indonesia

Pages 175-181

Geography 253.6 million, Diverse

Economy Many obstacles

Foreign Ownership Cannot own land,

businesses, or houses but can purchase strata title

No license required for agents

Beyond the Basics Respect and

relationships important

Strive for harmony and saving face

A Look at South Korea

Pages 183-188

Geography Seoul is 10.4 million

Economy 12th largest Chaebols

Foreign Ownership Few restrictions Agents must be

licensed Expensive to rent

Beyond the Basics Strict hierarchy,

respect for seniority and elders, and group harmony

A Look at Malaysia

Pages 189-198

Geography 30.1 million

Economy Exporter of oil and gas Government subsidies

Foreign Ownership Few restrictions, but

minimum value req. MM2H Agents must be

licensed

Beyond the Basics Bumiputra Modest, self-

deprecating, and face-saving behavior admired

A Look at New Zealand

Pages 199-203

Geography 4 million, kiwis

Economy Agricultural exports Globally competitive Homes sold in auction

format, no MLS Foreign Ownership

Few restrictions Licensed agents

(national)

Beyond the Basics Egalitarian Concise,

straightforward approach to business

A Look at Singapore

Pages 205-209

Geography 5.6 million, mix of

Chinese, Malay, IndianEconomy

#1 ease of doing business

Foreign Ownership Approval required in

some cases Stamp duties License required

Beyond the Basics Indirect

communication and saving face valued, yet keen negotiators

A Look at Taiwan

Pages 211-214

Geography Taipei is 2.7 million

Economy Healthy trade surplus

and foreign reserves Foreign Ownership

May purchase or lease if Taiwanese are allowed to in foreigner’s country

License required

Beyond the Basics Traditional Chinese

culture Family important Group harmony

A Look at Thailand

Pages 215-219

Geography Bangkok is 8.2 million

Economy Tested by recession,

flooding, and political unrest, but resilient

Foreign Ownership Cannot own land, only

condos and apts Practitioners, business

not regulated

Beyond the Basics 95% Buddhist, sets

tone for hierarchical relationships

Wai (greeting) Body language key

A Look at Vietnam

Pages 211-225

Geography 93.4 million

Economy State-owned

enterprises dominate Foreign Ownership

2015 law allows foreigners to buy houses with valid visa

Licensed property trading floors/agents

Beyond the Basics Value duty, loyalty,

honor, respect for age and authority, and family devotion

Summary: What Did We Learn? Identify the social, political, and geographical

characteristics of Asia/Pacific countries. Develop market intelligence by researching factors

that shape Asia/Pacific real estate markets and assessing business opportunities.

Adapt business and social behavior to conform to customs and cultural norms.

Develop strategies for making productive network contacts and marketing your real estate services to clients and customers from Asia/Pacific countries.

Page 225