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Nevada to try Attracting More Japanese Firms

NEVADA -- Nearly one-third of the foreign companies operating in Nevada are Japanese, a study conducted by the Nevada Commission on Economic Development says.

Knowing that, the state will do more to recruit other Japanese companies.

A survey on which the study is based said the total number of businesses excludes retail operations, including restaurants. State officials said Japan is the source of the most foreign companies operating in the state and the next largest number come from Germany.

The reasons the 23 Japanese companies have chosen Nevada to conduct business mirror those given by their domestic contemporaries: tax benefits and incentives, being close to the state's dominant gaming industry, the state's low cost of living and Nevada's favorable business climate and location.

A University of Nevada, Las Vegas, business management class commissioned by the Economic Development board surveyed 75 foreign businesses in the spring about why they chose to locate in Nevada.

Of the Japanese companies, 39 percent cited Las Vegas being the epicenter of the gaming industry as their reason for choosing the state. Respondents also cited Las Vegas' and Reno's designated free trade zones, which offer tax breaks; easy accessibility of government regulators, the high quality of labor and the state's excellent quality of life.

"The most common reason among Japanese companies who were either manufacturers for gaming products and devices or service-related industries that benefited from a high volume of tourism, was that they chose Nevada as a location because the success of their business was tied to gaming," the report says. "For the gaming-related companies, one company put it quite clearly: 'Nevada would be the only state to be considered.' "

The state's proximity to other markets in the West and nonstop air service to Tokyo also were noted in the survey.

"Japanese companies also liked the fact that Nevada is situated at the hub of the 11-state western region. Nevada is an ideal location for companies seeking cost-effective, rapid access to major markets both domestic and international," the report says. "Japan Airlines maintains direct air service from Tokyo's Narita International Airport to Las Vegas, providing convenient access for Japanese company executives and their families. The Japanese communities in Southern California are less than a one-hour flight from Las Vegas."

Japan Airlines currently has five round trips a week between Tokyo and Las Vegas, but a downturn in tourism will result in the airline cutting back to three flights a week between November and March.

The trade zones also were listed as important. Those zones allow firms to transport goods and materials for manufacturing into the United States without U.S. Customs entry, payment of duties and government excise taxes. Materials are then assembled and processed and when ready for delivery, can be exported abroad without excise taxes being levied.

Al Di Stefano, director of global trade and investment for the Commission on Economic Development, said the survey has led to the publication of an investment guide for Japanese companies.

Di Stefano said the state would work with Kaji & Associates to develop a promotion and recruitment plan to encourage other Japanese companies to consider moving to Nevada and the office also is providing information on the state to the Japan External Trade Organization, which has an office in Los Angeles.

Tom Nugent, vice president of sales and marketing for JCM American Corp., Las Vegas, said there could be some long-term advantages to existing Japanese companies, including his, if more overseas companies were recruited.

"We could all have some things in common and may be able to help each other in the areas of shipping or communication," Nugent said.

JCM manufactures currency validators that are a part of slot machines. The company is led by President Akiyoshi Isoi.

Nugent said additional Japanese companies could add camaraderie to the growing Asian community in Southern Nevada and that the commission should explain that Las Vegas is a logical place for Japanese companies to relocate.

"There's a rather large Japanese community here," Nugent said. "It's easy to travel to and from Japan from here and there's an ease of communication."

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