JETRO Invest Japan Report 2022
Chapter2. Business Operations of Foreign-affiliated Companies in Japan Section1. Outline of Foreign-affiliated Companies

1. Survey on Business Operations of Foreign-affiliated Companies in Japan

This questionnaire survey was administered to 6,582 foreign-affiliated companies in Japan during the period from September to October 2021, receiving responses from 1,315 companies (valid response rate: 20.0%).

Regarding the industry breakdown of respondents, 15.0% were in manufacturing, 38.6% in wholesale trade/general trade, 3.8% in retail trade, and 30.3% in services and others. By country/region of the foreign parent company, Europe accounted for 39.8%, Asia for 34.0%, and North America for 21.2% (Chart 2-1).

Chart 2-1: Overview of Responded Companies 1
New Analysis
Industry of foreign parent companies	n	Propotion(%)
Manufacturing	197	15.0
Wholesale trade/general trade	507	38.6
Retail trade	50	3.8
Services and others	398	30.3

Chart 2-1: Overview of Responded Companies 2
New Analysis
Industry of foreign parent companies	n	Propotion(%)
Large enterprises	61	4.6
Small and medium-sized enterprises	1,088	82.7

Chart 2-1: Overview of Responded Companies 3
New Analysis
Country/region of the foreign parent company	n	Propotion(%)
North America	279	21.2
USA	264	20.1
Canada	15	1.1
Asia	447	34.0
China	135	10.3
Taiwan	84	6.4
Korea	81	6.2
Hong Kong	75	5.7
Singapore	42	3.2
Other Asia	30	2.3
Europe	523	39.8
Germany	167	12.7
France	82	6.2
United Kingdom	70	5.3
Switzerland	50	3.8
Netherlands	33	2.5
Other Europe	121	9.2
Others	41	3.1

2. Foreign Parent Companies Breakdown by Share Ownership, Country and Region

According to the survey on the ownership by foreign parent company, 68.1% of the respondents were 100% foreign-owned. By industry, 31.6% of the “retail trade” companies have an ownership ratio of over 50% to less than 100%, including many joint ventures (Chart 2-2). New Analysis

Looking at the countries and regions of foreign parent companies by the year of establishment/investment in Japan, the number of entries from Asia has increased significantly since 2001 (Chart 2-3).

Chart 2-2: Ownership Ratio of Foreign Parent Company (Unit: # of companies, %) New Analysis
Industry	n=	1/3 or less	Over 1/3 and less than 50%	50%	Over 50% and less than 100%	100%	No answer
Total	1,315	3.3	2.4	2.7	13.1	68.1	10.3
Manufacturing	670	2.7	2.5	2.7	12.8	71.6	7.6
Wholesale trade / general trade	115	5.2	1.7	4.3	9.6	66.1	13.0
Retail trade	19	5.3	5.3	—	31.6	47.4	10.5
Service and others	392	3.8	2.8	2.6	14.5	66.8	9.4

Chart 2-3: Year of Establishment/investment and Country/region of Foreign Parent Company

3. Industry Breakdown of Foreign Parent Companies and Foreign-affiliated Companies in Japan New Analysis

Looking at the industries of foreign parent companies, “manufacturing” accounted for the largest number of 670 companies (51.0% of the total), followed by “services and others” with 392 companies (29.8%), “wholesale trade/general trade” with 115 companies (8.7%), and retail trade with 19 companies (1.4%) (vertical axis in Chart 2-4).

57.3% of respondents have been established in Japan as wholesale trade/general trade companies, even if the foreign parent company is in the manufacturing industry (horizontal axis in Chart 2-4).

Chart 2-4: Industry Breakdown of Foreign Parent Companies and Foreign-affiliated Companies in Japan New Analysis

4. Size of Foreign-affiliated Companies in Japan New Analysis

The following are the survey results on the capitalization and the number of employees of the foreign-affiliated companies in Japan.

In terms of capital size, “over 5 million to 10 million yen” accounted for 21.9%, and “over 50 million to 100 million yen” for 20.6% of the total. Capital stock is relatively large among “manufacturing” and “retail trade” (Chart 2-5).

As for the number of employees, 82.7% of the total respondents have 50 or less, and 92.3% of “wholesale trade/general trade” have 50 or less (Chart 2-6).

Chart 2-5: Capital Size of Foreign-affiliated Companies in Japan New Analysis

Chart 2-6: Number of Employees of Foreign-affiliated Companies in Japan New Analysis

5. Business Performance of Foreign-affiliated Companies in Japan

The following are the survey results on the sales and changes in sales of the foreign-affiliated companies in Japan.

In terms of sales, “from 100 million yen to 500 million yen” was the most common range recorded by 26.1% of the respondents.

Regarding year-on-year increase/decrease in sales, "decrease of 10% or more" was the most common response at 27.5%, while "flat" and "increase of 10% or more" accounted for 21.9% and 21.4%, respectively, all above 20% range showing dispersed distribution (Chart 2-8).