German companies demand swift easing of entry restrictions to Japan. Million Euro projects at stake.
- 73% of German companies in Japan see ongoing projects and business activities at stake caused by the entry ban for expatriates and foreign experts.
- 61% require foreign specialists and technical experts to finalize projects in Japan.
- 36% expect a strategic impact on their operations in Japan in terms of downsizing, shifting regional responsibilities outside Japan or reduction in expat deployment.
February 3, 2022 | Tokyo – Japan’s entry restrictions imposed at the start of the global pandemic almost two years ago still massively impact the business activities of international companies working in the country. Without an easing of the entry ban in sight, 73% of German companies in Japan see ongoing projects and business activities at risk. According to a recent survey by the German Chamber of Commerce and Industry in Japan (AHK Japan), 61% of the companies desperately require foreign specialists or technical experts to come to Japan to complete projects and carry out orders. 29% of the respondents urgently need to fill key positions with seconded staff, but they cannot take up their jobs because of the existing entry ban.
At the same time, German managers are concerned that the strict immigration rules continue to heavily affect Japan’s business community itself since their Japanese clients cannot get the service, they require from their international business partners. Some even see long lasting impact as Japan puts its reputation as a destination for investments and international talent on the line.
23% of the German companies surveyed already lost substantial business related with the entry ban that sum up to more than 100 million Euro.
Three fourths (73%) of the respondents see their project and business volume at stake due to the entry ban. Asked about their outlook, 62% stated they expect an impact of up to 10 million Euro of lost opportunities. 7% expect to risk 50 million Euro of potential business volume if the entry restrictions are not eased. 4% of the companies finally even see projects of more than 100 million Euro at risk.
What hinders foreign companies severely, is the impossibility to send specialists and technical experts to Japan for project-specific tasks. 61% of the German companies require overseas experts in the next 3 to 6 months. The figure has doubled in comparison to a 2021 survey, underlining the urgency of the problem.
"International companies urgently require staffing key positions with expatriates, who after all contribute to the Japanese society and pay their share of taxes. Overseas specialists and technical experts urgently need to come to Japan for short-term stays to complete important projects. The entry ban in place for the past 23 months is not only a burden on German business but starts to severely impact Japan’s own business community and its international reputation.”, said Marcus Schürmann, CEO of AHK Japan and Delegate of German Industry and Commerce in Japan. “We therefore urge the Government of Japan to manage the entry restrictions more flexibly and allow entry for these target groups according to transparent procedures.”
The longer the entry restrictions last, the more severe impact they have on Japan’s international business community as a whole. 11% of German companies have already or will downsize their operation in Japan, up 4 percentage points from a February 2021 survey. 13% have already or will move regional responsibilities to other locations outside Japan, up 11 percentage points since twelve months ago. The same negative trend can be seen for attracting international talent to Japan. 12% of the German companies have already or will reduce expat deployment and increase local management functions, up 7 percentage points since 2021.
Japan is a key partner for German business. With a trade volume of 38.6 billion Euro, Germany is the Number 1 European exporter to Japan and vice versa. 12,480 German companies export to Japan, 450 German companies have their own subsidiary in Japan creating 265,000 jobs. The German stock of foreign direct investment in Japan adds up to 15.6 billion Euro. 10 German companies are among the top 100 foreign investors in Japan.
The current AHK Japan online survey ran from January 27 to 31, 2022. Responses from 25,2% of 396 surveyed companies were included in the evaluation.
The full results of this flash survey are ready to download here:
Press Contact
Yuko Makita
Communications
German Chamber of Commerce and Industry in Japan (AHK Japan)
+81 (0)3 5276 8741
press(at)dihkj.or.jp
Related Links
Publications on the topic
AHK Japan Flash Survey 1/2022