---
title: What foreign companies struggle with most in Japan
description: "JETRO 2025: the top challenges for foreign companies in Japan are currency, communication and hiring. Paperwork ranks ninth. Japan is hard because of people."
image: https://nobusato.jp/hubfs/covers-2026-11/what-foreign-companies-struggle-with-in-japan-cover-en-2026-10-m.png
---

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Launching in Japan

In this article

1. [What ranks at the top of the surveys?](https://nobusato.jp/en/blog/what-foreign-companies-struggle-with-in-japan#s1)
2. [Which people can't they hire?](https://nobusato.jp/en/blog/what-foreign-companies-struggle-with-in-japan#s2)
3. [Why everyone spends their energy on paperwork anyway](https://nobusato.jp/en/blog/what-foreign-companies-struggle-with-in-japan#s3)
4. [Maps first, paperwork second](https://nobusato.jp/en/blog/what-foreign-companies-struggle-with-in-japan#s4)

1. [Home](https://nobusato.jp/en?hsLang=en)
2. [Articles](https://nobusato.jp/en/blog?hsLang=en)
3. [Launching in Japan](https://nobusato.jp/en/blog/tag/launching-in-japan)

# What foreign companies struggle with most in Japan

In Japan, people get stuck before paperwork does

[Nobu Sato](https://nobusato.jp/en/profile?hsLang=en)7 min read

Contents4

1. [What ranks at the top of the surveys?](https://nobusato.jp/en/blog/what-foreign-companies-struggle-with-in-japan#s1)
2. [Which people can't they hire?](https://nobusato.jp/en/blog/what-foreign-companies-struggle-with-in-japan#s2)
3. [Why everyone spends their energy on paperwork anyway](https://nobusato.jp/en/blog/what-foreign-companies-struggle-with-in-japan#s3)
4. [Maps first, paperwork second](https://nobusato.jp/en/blog/what-foreign-companies-struggle-with-in-japan#s4)

The hardest part of entering Japan is people. Yet companies planning to come here ask me about paperwork first: how to register the entity, which licenses they need, how long a bank account takes.

All of that is tedious. It isn't the hard part. The hard part shows up in the data, and it has been showing up for years.

## What ranks at the top of the surveys?

Every year JETRO asks foreign-affiliated companies in Japan what their biggest business challenges are. In the FY2025 round, 1,423 companies answered, and they could pick more than one.

First came currency risk, 52.1%. No surprise, given what the yen has done in the last few years. Second, language and communication barriers, 40.3%. Third, being unable to hire specialists, executives and managers, 38.4%. Fourth, a market shrinking with the aging population, 38.2%. Difficulty hiring general staff, sales staff and administrators came in at 24.5%.

And complex administrative procedures? 28.1%. Ninth place. Tax procedures, 25.0%, eleventh.

In Japan, people get stuck before paperwork does: three of the top twelve problems are about people

Business problems named by foreign-affiliated companies in Japan (JETRO FY2025 survey, 1,423 firms, multiple answers, %)

People problemsOther

- Currency risk

  52.1%
- Language and communication barrierspeople

  40.3%
- Can’t hire specialists, executives, managerspeople

  38.4%
- Shrinking market (aging population)

  38.2%
- Falling purchasing power

  33.2%
- Office and land shortage, rising rents

  33.2%
- Cultural and business-practice differences

  29.7%
- Natural disasters

  28.5%
- Complex administrative procedurespaperwork

  28.1%
- High business costs

  25.5%
- Complex tax procedurespaperwork

  25.0%
- Can’t hire general and sales staffpeople

  24.5%

Administrative procedures rank ninth, tax procedures eleventh. What stops you first is people.

Figure 1. In JETRO’s FY2025 survey of 1,423 foreign companies, language and communication barriers (40.3%), hiring specialists (38.4%) and hiring general staff (24.5%) put people in three of the top twelve problems, while administrative (28.1%) and tax procedures (25.0%) both sit in the bottom half.

Add up communication, specialist talent and general talent, and three of the top twelve items are about people. Both procedure items sit in the bottom half.

This isn't a one-year fluke. METI used to run its own annual survey of foreign companies. In the 2020 round, with 2,476 respondents, the top obstacle to doing business in Japan was high business costs at 75.1%. Second was difficulty securing talent, at 53.6%. Administrative procedures were fifth, at 40.5%. That survey ended after FY2020 and JETRO's picked up the question. The answer is the same.

What has changed in five years is the paperwork. In JETRO's FY2023 survey, about one company in four said administrative procedures were getting better, for the second year running. Talent was the item most often reported as getting worse.

## Which people can't they hire?

The FY2025 survey has one more set of numbers. Among companies that are hiring, about eight in ten said they can't fill the roles they need, or expect not to. The hardest role to fill is sales, picked by more than sixty percent. Outside the major cities, non-IT engineers are the scarcest.

Sales being the hardest matches what I've seen. A foreign company entering Japan brings a finished product and HQ's technology. The one thing it has to grow locally from zero is the sales team. And Japanese salespeople are far more wary of joining a foreign company nobody has heard of than most executives expect.

If you can't hire sales, nothing else gets its turn. The entity is registered, the office is leased, and the first revenue still doesn't come.

## Why everyone spends their energy on paperwork anyway

Paperwork is certain. That's the whole appeal.

Company registration has a checklist. Which documents, how many weeks, and a consulting firm or administrative scrivener will quote you a price. It looks hard. But it's a road with a known answer.

People have no checklist. I once helped a foreign company set up in Japan, and every early question was about procedures. Halfway through, the real problem surfaced. They wanted to hire their first employee and couldn't say what that person should look like. Or what to pay, how to interview, how to persuade someone to join a company nobody in Japan had heard of, what to say in that conversation. None of these questions had a standard answer, so none of them had been asked.

Most executives handle it the same way. Finish what can be finished, and worry about hiring when hiring fails. By then the entity exists, the office is leased, and HQ is asking about the first quarter's numbers.

## Maps first, paperwork second

My own approach fits in two words. Don't guess.

When you enter a new market, build the market map first, then the talent map, then work down through product, sales and organization in that order. Paperwork comes after all of that.

Paperwork can wait. Draw the two maps first

The order I use when helping a company enter Japan (the method in this article)

1. 01Market mapWho is there: who fights for the same customers, who supplies people, who decides whether you get to play
2. 02Talent mapWho can come: how many people are left once you multiply the requirements, how thick each of the three rings is, what you give up
3. 03ProductDecided from what the two maps say
4. 04SalesThe first hire’s profile, pay, interview and pitch are settled here
5. 05OrganizationThe shape of the team, whether to open a regional office
6. 06PaperworkDone by a company that already knows who it should hire and who it can hire

Do it in reverse and you end up like the eight in ten who can’t find the people they need.

Figure 2. The order for entering Japan runs market map, talent map, product, sales, organization, paperwork: once you know who is there and who can come, the first hire’s profile, pay, interview and pitch are mostly on paper, and the paperwork can come last.

The market map tells you who's there. Which players, which ones fight for the same customers, which ones can supply people, which ones decide whether you get to play at all. Get this wrong and everything after it is wrong. I wrote about that in [Picking the wrong competitors is worse than having none](https://nobusato.jp/en/blog/picking-the-wrong-competitors?hsLang=en).

The talent map tells you who can come. How many people are left once the role's requirements multiply. How thick each ring of companies is at each distance from your business. Which requirement you'll drop when you can't fill the role. This decides more than hiring. It decides what the organization looks like, who the first person is, and whether to open a regional office. Details in [A talent map is not a list](https://nobusato.jp/en/blog/talent-map-is-not-a-list?hsLang=en).

Once both maps are drawn, most of the hard questions are already answered on paper: who the first hire is, what to pay, how to interview, how to persuade. Then you do the paperwork, as a company that knows who it needs and who it can get.

Do it in the reverse order and you become one of the eighty percent in the survey.

The second-ranked item, language and communication barriers, looks less and less like a language problem to me. When HQ and the Japan entity can't communicate, it's usually a difference in background, in culture, and in how finely each side looks at things. HQ sees quarters and market share. The entity sees this customer, this person, this week. Same language, no overlap. A map doesn't fix that. I ran into it once in [Two people at the top](https://nobusato.jp/en/blog/when-two-heads-work?hsLang=en), and I still don't have a good answer.

When your company entered Japan, what stopped you first? The paperwork, or the people?

Sources

- [JETRO 2025年度 外資系企業ビジネス実態調査（2026年2月、有効回答1,520社）](https://www.jetro.go.jp/news/releases/2026/f40d8720121d8e2a.html)
- [JETRO 2024年度 外資系企業ビジネス実態調査](https://www.jetro.go.jp/news/releases/2025/a2074f44be097739.html)
- [JETRO 2023年度 外資系企業ビジネス実態アンケート 調査ポイント（内閣府資料）](https://www.cao.go.jp/invest-japan/committee/ap_taskforce_02/siryo_01.pdf)
- [経済産業省 第54回 外資系企業動向調査（2020年、JETRO整理）](https://www.jetro.go.jp/invest/investment_environment/ijre/report2021/ch2/sec3.html)

On who that first hire should be, see [Your first hire in Japan should not be a salesperson](https://nobusato.jp/en/blog/first-hire-in-japan-should-not-be-sales?hsLang=en).

On why inward FDI into Japan is so low, see [A good market that is hard to enter](https://nobusato.jp/en/blog/japan-inward-fdi-is-low?hsLang=en).

Author

[Nobu Sato](https://nobusato.jp/en/profile?hsLang=en)

Launching in Japan, starting with people and systems. I write about building organizations, sales teams and technology organizations in Japan, in English, Japanese and Chinese.

[Profile](https://nobusato.jp/en/profile?hsLang=en)[Contact](https://nobusato.jp/en/contact?hsLang=en)

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