Top 5 Most Popular Locations to Start a Business in Japan
Japan is recognized globally as a leading business hub, known for its advanced infrastructure, skilled workforce, and stable economic environment. It continues to attract companies from around the world, particularly those seeking to expand their presence in the Asia-Pacific region. For such companies, establishing a foothold in Japan can be a highly strategic move.
However, within Japan, each prefecture differs significantly in terms of business environment, support systems, convenience of daily life, and readiness to accommodate foreign businesses and residents. Choosing the right location for your office can be a crucial factor in your business’s success.
In this article, we rank the top prefectures in Japan that overseas companies should consider when setting up a new office. By understanding the unique characteristics of each region, we hope this guide helps you decide where to establish your business in Japan.
Popular Business Locations in Japan Ranked
- Tokyo
- Osaka
- Kanagawa
- Aichi
- Saitama
1. Tokyo
Tokyo is Japan’s political, economic, and cultural capital, and it is the most sought-after location for overseas companies entering the Japanese market. It is home to many multinational corporations’ Japanese branches and Asia-Pacific headquarters, boasting world-class business infrastructure.
Districts such as Minato, Chiyoda, and Shibuya are hubs for IT, finance, and startups, offering a diverse range of business opportunities across various industries. The Tokyo Metropolitan Government is also proactive in attracting foreign businesses, providing multilingual support services such as assistance with company registration, interpretation and translation, and visa acquisition.
In terms of lifestyle, Tokyo offers a welcoming environment for foreign employees, with access to English-speaking medical facilities and international schools. While the cost of living and business operations is relatively high, the potential to build a strong network and enhance brand value makes Tokyo an extremely attractive choice.
2. Osaka
Osaka is Japan’s second-largest economic region and is widely recognized as a significant business hub, ranking after Tokyo. With a long history as a “merchant city,” Osaka has developed into a thriving center for manufacturing, logistics, retail, and service industries.
In recent years, the city has also focused on supporting startups, with facilities like the Osaka Innovation Hub offering resources and networking opportunities for both domestic and international companies. With Kansai International Airport and other transportation infrastructure, Osaka provides convenient access to other major Asian markets.
Compared to Tokyo, office rental costs and labor expenses are generally lower, making Osaka a more attractive option for companies planning mid- to long-term business operations. The city also offers a vibrant urban lifestyle with a distinctive culture and a friendly, welcoming atmosphere for foreigners. As a strategic base for doing business throughout the Kansai region, Osaka stands out as a highly promising choice.
3. Kanagawa
Located next to Tokyo, Kanagawa Prefecture is a highly attractive area for many foreign companies, thanks to its well-balanced business and living environment. Yokohama, the largest city in the prefecture, is an international port city that hosts numerous branches and R&D centers of global companies.
Particularly active in the fields of life sciences, IT, and environmental technology, the region is developing innovation hubs around the Minato Mirai area, which is also notable for landmarks such as the Red Brick Warehouse. Kanagawa offers excellent access to central Tokyo while maintaining relatively lower business costs, making it a practical choice for many firms.
The prefecture is also rich in natural surroundings and known for its high quality of life, which appeals to foreign employees and their families. The local government actively supports the entry of foreign businesses with English-language services for both business operations and daily life, making Kanagawa a reliable and comfortable place to establish a presence in Japan.
4. Aichi
Located in central Japan, Aichi Prefecture is globally recognized as a manufacturing hub, particularly in the automotive industry. It is home to the headquarters and factories of major manufacturers, including Toyota, and boasts a strong concentration of industries related to auto parts, robotics, and precision machinery.
Nagoya, the capital of Aichi, is the largest city in the Chubu region and serves as a major transportation hub. With access to the Shinkansen and Chubu Centrair International Airport, the area offers excellent connectivity both within Japan and internationally.
Aichi is also recognized for its active involvement in research and development, characterized by strong collaborations among universities, research institutes, and private companies.
Compared to Tokyo and Osaka, land and office rental costs are more affordable, making it a cost-effective base for business operations.
The local government is highly supportive of foreign business entry, offering well-organized assistance and business support services. For companies seeking to collaborate with manufacturers or focus on R&D, Aichi offers a strategic and attractive location in Japan.
5. Saitama
Saitama Prefecture, situated just north of Tokyo, is part of the greater Tokyo metropolitan area and offers excellent access to the capital’s market, along with a strong logistics infrastructure. It has evolved into a thriving business hub, particularly in manufacturing, logistics, and IT, boasting well-developed industrial parks and research facilities.
Its proximity to central Tokyo, only about 30 minutes by train, combined with lower office rental and labor costs, makes Saitama an attractive option for companies focused on cost efficiency. The local government, particularly in Saitama City, actively works to attract businesses by providing support services such as company setup assistance, translation services, and business matching.
Saitama also offers a calm and comfortable living environment surrounded by nature, which appeals to foreign employees and their families. Blending the functions of a metropolitan area with the stability of a regional location, Saitama has become an increasingly strategic choice for overseas companies planning long-term business development in the Japanese market.
Conclusion
For overseas companies considering expansion into Japan, choosing the right location for their office is a critical decision that can significantly impact business growth and long-term sustainability. While Tokyo offers the convenience of a global business hub, other areas, such as Osaka and Aichi, stand out for their strong industrial bases, and regions like Kanagawa and Saitama offer a well-balanced mix of cost efficiency and quality of life.
Each region in Japan has its own distinct characteristics, so selecting the ideal location based on your industry, business model, desired talent, and potential partnerships is the first step toward success. In Japan’s increasingly diverse and globalized market, location strategy is not just about cost; it is a key element in building competitive advantage.
We hope this article helps guide you in finding the most suitable business base for your company’s future in Japan.
