Japan
A mature, high-standard market of 123.05m people with deep automotive, semiconductor, precision-manufacturing, digital and content ecosystems. Real GDP grew 1.2% in 2025. A shrinking population shifts the opportunity toward productivity, automation, health/elder care and high-value localisation—not low-cost scale.
Best for: Digital/AI and data infrastructure, semiconductors and advanced manufacturing, robotics/automation, life sciences and health/elder care, decarbonisation, and consumer/content businesses prepared to build local trust, channels and after-sales over time.
Japan is not a market you can test merely by registering a ¥1-capital company. Entity, residence status, FEFTA, sector licences and customer qualification are separate gates; price long-term local execution before choosing the form and city.
Market overview · how big the opportunity
Source: Statistics Bureau of Japan / Cabinet Office ESRI / JETRO (checked 20 Aug 2026)
Business environment · what wins, what to watch
Do not reduce the regime to “open except a few sensitive sectors.” A foreign investor’s share acquisition, unlisted-share transfer, loan, branch establishment or business-purpose change must be tested under FEFTA against investor status, transaction type/threshold, target activities and exemptions. Where required, prior notification goes to the Finance Minister and competent business minister. Registration, FEFTA, sector licences, tax, employment, banking and residence status are separate gates.
- High-standard customers, mature supply chains and an IP environment suited to validating high-value products
- Deep auto, semiconductor-material/equipment, precision, robotics and life-science clusters
- Osaka, Aichi and Fukuoka provide differentiated industrial and cost choices beyond Tokyo
- JETRO and local governments provide location and entry support, but support is not approval or a subsidy
- Population decline supports demand for automation, digitalisation, health/elder care and productivity solutions
- A shrinking population/workforce requires role- and location-specific talent validation
- Procurement, quality qualification, security, after-sales and local references extend sales cycles
- FEFTA, sector licences and residence status are not created by company registration
- Japanese contracts, tax, employment and bank-KYC evidence require local execution capacity
- Tokyo customer density comes with higher pay, rent and competition than national averages
Industry opportunities
- Digital / AI and data infrastructure2024 greenfield announcements included 38 software/IT and 24 communications projects; data-centre growth still depends on site-specific power, land, data and network conditions
- Semiconductors / electronics and advanced manufacturingSemiconductor, electronic-component and communications projects rose in 2024; customer qualification, export controls, subsidy conditions and resilience remain launch gates
- Robotics / automation and logisticsDemographic and labour constraints support automation; 2024 projects included industrial equipment and transport/warehousing, with returns dependent on local integration and service
- Life science / health and elder careAging and regional health needs provide long-run demand, while drugs/devices, clinical work, reimbursement, care and personal data each have specific regulation
- Decarbonisation / premium consumer and contentRenewables and a high-standard consumer market offer opportunity, but grid/site, copyright, channel, product and advertising compliance must be tested separately
Choosing an entry mode
Useful for demand validation; allocate importer responsibility, product approval, permanent-establishment tax, data, after-sales, channel and brand control first
May research, collect information and liaise, but generally cannot make direct sales; it is not a low-cost operating entity or a substitute for contracting and invoicing
May operate within registration and licence scope, with direct parent liability; requires a Japan representative plus tax and continuing filings
Fits long-term local staff, assets, finance and customer contracts; Companies Act capital, Business Manager residence status, FEFTA and sector capital are not one number
Choosing a region
- Tokyo / Kanto
The deepest HQ, finance, customer, international-talent and digital pool. The 2025 Census counted 14.246m in Tokyo and 36.986m in the Tokyo metro, 30.1% of Japan, alongside the highest pay, rent and competition.
- Osaka / Kansai
Supports second headquarters, life science, manufacturing, consumer and western Japan. Test customers, labs, ports, pay and local support separately across Osaka, Kyoto and Hyogo.
- Aichi / Chubu
Dense auto, aerospace, machinery, robotics and supplier networks suit B2B manufacturing; supplier qualification, engineering Japanese, field service and customer concentration matter more than for HQ operations.
- Fukuoka / Kyushu
East-Asia connectivity, semiconductors and a startup ecosystem, with lower office/pay signals than central Tokyo. Validate talent scale, HQ-customer distance, logistics and local incentives per project.
Budget, timeline and key risks
JETRO’s current planning references are about ¥700,000 for branch setup/tax notices and ¥1,000,000 for a subsidiary, including outlays and professional-agent fees but excluding capital, office, hiring, residence status, housing, banking, licences and operating cash. Companies Act registration can start at ¥1 capital; that does not mean ¥1 is viable. The ¥30m condition linked to Business Manager residence status is a separate gate.
JETRO references about two months for a branch and two to three months for a subsidiary after registrable particulars are settled. Notarisation/translation, FEFTA prior notification, residence status, bank KYC and sector/premises approvals can extend operational launch. Never turn registry processing into a universal opening promise.
- Combining Companies Act minimum capital, Business Manager residence-status capital and operating cash into one “minimum capital”
- Failing to determine FEFTA prior notification, exemption and post-reporting before signing or closing
- Using a representative office for sales, invoicing or other direct business
- Operating after commercial registration but before tax, labour/social, bank, sector, product and premises gates
- Underbudgeting Japanese evidence, notarisation/translation, quality qualification, local after-sales and customer-validation time
- Applying national-average pay/rent to Tokyo, or overestimating talent and customer density because a regional site is cheaper
- Treating greenfield announcements, government support or location promotion as realised funding, approved subsidy or unconditional benefit
Labor cost (summary) · what one hire costs
Minimum wages are prefectural, not one national rate. FY2025’s weighted average is ¥1,121/hour: Tokyo ¥1,226 from 3 Oct 2025, Osaka ¥1,177, Aichi ¥1,140 and Fukuoka ¥1,057. Add health insurance, employees’ pension, employment/workers-comp, overtime, leave, bonus and professional-service costs; see the hiring guide.
Getting started · first steps
- 1.Define Japan-source revenue, customers, data, import, product, premises and personnel, then test FEFTA and sector licences
- 2.Choose rights and liability before form: cross-border/agent distribution, representative office, foreign branch, KK/GK subsidiary or JV/acquisition
- 3.Before committing premises or hires, compare Tokyo, Osaka, Aichi and Fukuoka for customers, talent, supply chain, wages, rent and support
- 4.Separate registration, tax notices, labour/social insurance, bank KYC, residence status, sector/premises approvals and operational launch into distinct milestones
Japan Launch journey · six connected channels
Work through the dependencies in order, retaining official evidence, owners, deadlines and exception-recovery records at each step.
Official evidence for this page
Still choosing? Compare Japan with other markets; once you decide, start by hiring.
Straight answer on what we do
We only field local teams in Vietnam, Malaysia and Singapore
This country guide is free for everyone, but we do not deliver on the ground here — we will not pretend otherwise. If those three Southeast Asian markets are also on your list, that is where we can genuinely help.