What do I need to be aware of when entering Japan? Are there risks to doing business there?


September 2015

Japan’s business climate is generally on par with most other advanced economies. Australia’s International Business Survey 2015 asked over 1,200 Australian internationally-active businesses about potential barriers to doing business in Japan:

Local language, culture and/or business practices

  • A high proportion of Australian businesses stated that the local language and culture is the biggest barrier to doing business in Japan
  • English is not widely spoken in business in Japan – an interpreter is usually required

Understanding local regulations

  • The World Bank’s ‘ease of doing business’ gauge ranks Japan 29th out of 189 economies
  • Paying tax can be significantly harder in Japan relative to other OECD nations – seeking the advice of a local accountant or tax adviser can help

Payment issues

  • Common methods of payment in Japan tend to depend on the product, quantity and relationship established between the two partners
  • Advance payment is generally preferable and may be possible for some exports to Japan

Regulations that favour local firms

  • Potential exporters to Japan should not be deterred by a perception of heavy regulations applying to foreign firms and imports
  • Where formal restrictions do exist, the Australian Government has recently signed a free trade agreement with Japan to help remove the remaining barriers


Protection of intellectual property rights

  • Protecting intellectual property is an important consideration in all markets
  • Japanese companies are experienced in this area and understand the need for confidentiality in the early stages of setting up an export relationship 

Austrade, the Australian Government’s trade and investment agency, provides more information on some of the potential risks to doing business in Japan and how to mitigate them.

Their attention to detail and their quality control [in Japan] is a much higher standard than maybe we are used to in Australia. So making sure that you adapt to their requirements is one major challenge. – John Cassegrain, Cassegrain, NSW-based wine exporter.