Academic journal article Journal of Accountancy

An American CPA in Tokyo

Academic journal article Journal of Accountancy

An American CPA in Tokyo

Article excerpt

How an adventurous CPA runs a successful practice in Japan.

It always had been Garry Royce's dream to live and work in Japan. He was intrigued by Asia ever since his childhood days in Minnesota. After four years working for a small CPA firm in Minneapolis, Royce decided it was time to live out this dream without a hotel reservation and with no certain plan, Royce left the United States to live and work in Japan. Since that risky move 12 years ago, Royce has established his own small CPA firm that provides expatriates and non-Japanese companies a complete range of accounting and tax services.

The Asian market is one of the world's largest and fastest growing. Small CPA firms that are considering expanding into Asia may benefit from Royce's experiences. Here is first-hand account of how one CPA overcame the barriers and opened his own practice overseas.


It was my intention to own my own practice overseas, but I went about acquiring my firm, Royce and Associates, in an unusual manner. I was hired by a large Japanese steel manufacturer just two weeks after my arrival in Japan. I worked in the company's foreign funds section and was responsible for project finance and collections. I later met an accountant and retired U.S. Air Force officer, and we agreed to establish a tax preparation business that would serve the U.S. military bases in and around Tokyo. During our first tax season my partner was in a car accident and was forced to leave Japan. At the same time, the value of the U.S. dollar was rapidly dropping and I wanted to find customers who would pay me in Japanese yen. I turned to expatriate tax services and began learning more about Japanese individual and corporate taxation. There is a strong market in Asia for smaller CPA firms that can help non-Japanese-owned companies and, as I expected, work came quickly.

I have been in Japan for 12 years and enjoy tremendously helping foreigners enter the Japanese market. Royce and Associates is the only small non-Japanese CPA firm in Tokyo. The firm works with Indonesians, Singaporians, New Zealanders, Australians, Canadians, Peruvians, Britons, Belgians, Indians and, of course, Americans. What do I offer that Japanese accountants do not? Native English.

My command of Japanese is adequate but not excellent. The secret of my success is that I can communicate to English-speaking people living in Japan. A Japanese person who needs accounting or tax services will not call me. But a foreign company or individual that comes to Tokyo to set up an office will look in one of Tokyo's two major English-language phone books and see Royce and Associates and call me first.

Foreigners and foreign businesses are the firm's specialty. We have come to know problems foreign companies are likely to face when entering the Japanese market, and we have the solutions to solve them. The firm specializes in three categories of services: national and local corporate tax services, expatriate tax services and business and individual consulting services, such as employment practices, the social insurance systems and visas.


Neither the American Institute of CPAs nor the Japan Institute of Certified Public Accountants (JICPA) recognizes the other's CPA license; there is no reciprocity. My firm operates legally in Japan by working in conjunction with a licensed Japanese accountant, Kenji Miyako.

Larger U.S. accounting and consulting firms operate the same way, but on a much bigger scale. For example, Price Waterhouse uses Aoyama Audit and Arthur Andersen uses Asahi Audit and Uno Tax Service.

In Japan a person must be licensed to sign a tax return for a fee; thus, Miyako reviews all Japanese tax returns and stamps them when they are ready. Our fees are carefully arranged to meet the requirements of the Japanese regulatory body. In the few cases a client has been audited, Miyako has provided representation. …

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