BUS202AT3Presentation (1)

[Audio] [Speaker 1] Good morning/afternoon, board members. Thank you for the opportunity to present. My name is Muhammad Haris, and with me today are and [Speaker 2]. We're here to recommend whether Southern Cross Botanicals should proceed with our proposed expansion into Japan, covering the legal structure, treaties, intellectual property, labour law and risks involved..

[Audio] [Speaker 1] Over the next ten minutes we'll walk through eight areas: the opportunity itself, the best business structure for Japan, the treaties that apply, how we'll protect our IP, labour law considerations, potential conflicts of law, difficulties we anticipate, and finally our recommendation..

[Audio] [Speaker 1] Our chosen country, carried over from Assessments 1 and 2, is Japan. Southern Cross Botanicals makes natural skincare using Australian native botanicals like Kakadu plum and eucalyptus, sold domestically as a premium, sustainably sourced brand. The opportunity is to export our existing range into Japan, one of the world's largest and most sophisticated beauty markets, where imported natural or 'clean beauty' products with a genuine provenance story are in growing demand. We'd start with online and pop-up retail to test demand before moving into department-store beauty counters..

[Audio] [Speaker 1] Japanese law offers four main structures for a foreign business: a Representative Office, a Branch Office, a Godo Kaisha or GK, and a Kabushiki Kaisha or KK. A Representative Office can't generate revenue, so it's ruled out immediately. A Branch Office can trade, but leaves SCB Australia directly and fully liable for everything that happens in Japan. That leaves the GK and the KK, both limited-liability entities under Japan's Companies Act..

[Audio] [Speaker 2] We recommend a Godo Kaisha, or GK subsidiary. Like a KK, it gives SCB limited liability – our exposure is capped at what we invest. But it's cheaper and faster to set up, with no notarisation requirement, roughly one hundred thousand yen versus two hundred fifty thousand or more for a KK. A GK can still trade, invoice, hold a Japanese bank account, and sign the distribution and Marketing Authorisation Holder-related contracts we need. And if SCB later wants outside investors, we can always convert the GK into a KK down the track..

[Audio] [Speaker 2] Several treaties directly shape this opportunity. JAEPA, in force since 2015, eliminates or reduces tariffs on most Australian goods entering Japan. Both countries are also in the CPTPP, which delivers JAEPA-plus outcomes in places. Because both Australia and Japan are parties to the CISG, that convention automatically governs our export sale contracts unless we choose to exclude it. And because both countries belong to the Madrid Protocol, SCB can extend its existing Australian trade mark registration into Japan through a single international filing rather than starting from scratch..

[Audio] [Speaker 1] Three things need protecting: our trade mark, our botanical formulations as trade secrets, and our packaging and marketing copyright. Japan applies a strict first-to-file trade mark rule, so we need to register early, either through the Madrid Protocol using our Australian registration, or by filing directly with the Japan Patent Office, and we'll need a local representative to do so. Formulations aren't protected by registration at all – they rely on a solid confidentiality agreement with our distributor. And the trade mark itself will be licensed to the distributor under the distribution agreement, with clear quality-control terms attached..

[Audio] [Speaker 1] To resource this, SCB's GK will hire a small local team – a country manager and one or two marketing and compliance staff to work with our distributor and MAH. Japan's Labor Standards Act sets standard hours at eight a day, forty a week, and any overtime requires a written labour-management agreement, known as a 36 Agreement. The Labor Contract Act treats dismissal as a last resort requiring objective justification, which is stricter than Australia's unfair dismissal regime. Japan's dominant union model is the enterprise union – organised within a company rather than across a trade – and if we second an Australian manager, equal-treatment rules mean their wages and conditions can't be set differently purely because of nationality..

[Audio] [Speaker 1] Because our distribution and sale contracts span Australian common law and Japanese civil law, there's real potential for a conflict of laws – a dispute where each side argues a different legal system should apply. Japan's own private international law statute generally respects the parties' choice of governing law, but defaults to Japanese law if the contract is silent. We resolve this by putting an express governing-law clause and a clear statement on CISG applicability into every contract, along with a dispute-resolution clause – commercial arbitration is well recognised in Japan-linked deals – and a jurisdiction clause for anything that falls outside arbitration..

[Audio] [Speaker 2] A few difficulties deserve attention. The PMD Act means every product needs a licensed Marketing Authorisation Holder before it can be sold, adding lead time. Japan's strict first-to-file trade mark rule creates a real risk of squatting if we delay registration. All labelling and regulatory notifications must be in Japanese, adding translation and compliance cost. Japanese consumers expect meticulous quality assurance and a genuine brand story, so any misstep could damage trust quickly. And we're entering a market where established Korean and French natural-beauty brands already hold strong positions..

[Audio] [Speaker 2] Our recommendation is that the Board approve this expansion, structured as a staged, managed entry: incorporate a GK subsidiary, partner with a licensed distributor who already holds MAH status, file our trade mark via the Madrid Protocol before any public launch, use JAEPA and CPTPP tariff preferences to protect our margins, and put governing-law, CISG and dispute-resolution clauses into every contract. In our view, the size of the opportunity, the tariff advantages, and Japan's strong rule-of-law environment outweigh the regulatory and cultural risks we've identified, provided we manage them as outlined..

[Audio] [Speaker 2] Thank you for your time. We're happy to take any questions the Board has about our proposal..

REFERENCES. Sources. Department of Foreign Affairs and Trade. (n.d.). Japan-Australia Economic Partnership Agreement. Australian Government..