Exporting to Japan

Japan is currently the third largest economy in the world with a GDP of $5.18 trillion (IMF, 2019). In the 4 quarters to the end of Q1 2019, UK exports to Japan amounted to £14.6 billion, an increase of 8.5% from the same period the previous year (ONS, 2019).

A new trade deal with Japan

On 23 October 2020, the UK Government signed the Comprehensive and Economic Partnership Agreement (CEPA) with Japan. This agreement is projected to boost trade by £15.7 billion over the next 15 years.

Opportunities to build partnerships with Japanese companies

The new deal with Japan will benefit UK companies across several sectors, such as agriculture, food and drink, manufacturing, digital, and financial services sectors.

As a stable country with a large, wealthy, and highly educated consumer market, premium high-quality goods and services are in demand. Japanese companies are also extremely loyal and open to building long-term business relationships.

Strong support for trade with Japan

To help businesses trade with Japan, the Department for International Trade (DIT) is organising an unprecedented virtual trade mission, running from March to June 2021.

You can also visit our Export to Japan hub for free information on trading with Japan, including detailed market research, events, industry guides, and practical step-by-step exporting advice.

Ease of doing business

29th

out of 190 countries (World Bank, 2019)

Currency

Japanese yen

Business languages

English is widely spoken in business

GDP per capita

$41,020

UK is $42,560 (IMF, 2018)

Economic growth

0.8%

Time zone

GMT + 9

Opportunities for exporters

Japan is an advanced economy, with a large, rich and highly-educated consumer market who are early adopters of new products and services.

Doing business in Japan

Businesses aiming to enter or expand in Japan may find differences in social and business customs daunting. To support your journey, DIT have partnered with Export to Japan to provide step-by-step exporting guides, bespoke tools, resources, and events.

Preparing to export

Tax

You can find information on tax in Japan for businesses in JETRO’s guide on taxes in Japan.

Customs

The Japan Customs website introduces the customs system and trade procedures. It also provides links to regional offices.

Standards and technical regulations

Japanese domestic standards often differ from international norms.

The Japanese Standards Association has responsibility for Japanese industrial standards covering a wide range of business areas and topics.

Intellectual property

There are Japanese laws on the registration and protection of IP rights relating to patents, utility models, trademarks and copyright.

Japan’s trademark law offers equal protection for Japanese and foreign nationals. UK companies who want to develop business in Japan can register their trademarks with the Japan Patent Office.

Trade barriers

Check for any reported barriers to trading with Japan.

Report any trade barriers that are affecting your business so we can help fix them.

Operating in Japan

Routes to market

The Japanese market is unique, as are its methods of doing business and building client relationships. It’s important to perform thorough research before deciding on a strategy for operation in the market.

Options which may work well for you are:

  • establishing direct relationships over time - doing business in Japan can be profitable, but you’ll find things can move more slowly than Western Europe or the US. Commitment and stability matter. It’s likely to take time to meet with the buyer, receive a first trial order, and when trust has been established, become a supplier. This process can take up to a couple of years, even for local Japanese salespeople.

  • using agents and distributors - as in other overseas markets you can appoint an agent or distributor who can assist with negotiating the difficulties of language and culture.

  • setting up a company - many exporters find that appointing their own manager or setting up a company, rather than using a representative, is a more focussed and successful way to break into this complex market

JETRO (Japan External Trade Organization), the government agency responsible for inward investment, can provide free office space in central Tokyo and several other locations. Whilst Tokyo would seem to be the obvious location, Osaka is an excellent option with lower start up costs.

Business relationships

You will work best with Japanese cultural differences if you:

  • make a long term commitment and do not expect to generate short term results
  • demonstrate your commitment to the market through regular engagement
  • are very information-oriented
  • are not deterred by the bottom up and consensus building decision-making process
  • take trial orders seriously as this is a key element of building relationships
  • build personal relationships

Read the Department for International Trade (DIT) Japan’s business etiquette guide for more details on business behaviour in Japan.

Next steps

DIT can advise you on doing business abroad, and help put you in touch with other people who can help such as lawyers and distributors.