Additional Japan resources
Understanding how economics, politics and government intersect can help businesses navigate Japan's market with confidence. This chapter outlines key institutions, economic zones, essential contacts and support resources for business success.
Country information
Politics and government
Japan is a democratic, constitutional monarchy with a parliamentary government led by the Prime Minister. Japan maintains an Imperial Family, headed by the Emperor, currently Emperor Naruhito.
Japan’s parliament, often referred to as the ‘Diet’ in English, comprises a House of Representatives (lower house) and a House of Councillors (upper house). The lower house has 465 members who are elected for four-year terms, although political conditions frequently see the House dissolved earlier. The upper house has 242 members elected for six-year terms. Of these members, 146 are elected in prefecturebased constituencies and 96 by proportional representation at the national level. One half of the upper house is dissolved for election at regular three-year intervals.
Executive power is vested in the Cabinet, which includes the Prime Minister and ministers of state. The Prime Minister is selected by a vote of both houses of the Diet. The Japanese Constitution specifies that the majority of Cabinet members must be elected members of parliament. However, the Prime Minister can appoint non-politicians to the Cabinet and as Special Ministers of State. Japan’s governmental structure has three tiers: national, prefectural and local. There are 47 prefectures and 1741 other local municipalities. Each tier is governed by elected assemblies. Japan does not have a federal system and the two lower tiers of government are to a large extent fiscally dependent on the national government.
Legal system
The modern Japanese legal system combines largely European and Anglo-American elements, with a few traditional Japanese characteristics. The modernisation of the legal system began after the Meiji Restoration in 1868, with the adoption of European law – the French and German civil law systems in particular were primary models. After World War II, Japan’s legal and government systems were overhauled again under the direction of American occupation authorities.
The modern Japanese Constitution (which came into force in May 1947) provides the democratic foundation for the separation of state powers in Japan between the legislature, the executive and the judiciary. Legislative power is vested in the Diet and executive power in the Cabinet. Judicial power is vested in the Supreme Court and four types of lower courts: high courts, district courts, family courts and summary courts.
The Japanese Civil Code, or Minpo, was adopted in 1896 and then substantially modified after World War II. It remains in effect today. The code was a necessary response to the emergence of a new free-enterprise system after the dissolution of the feudal landholding system, as well as the desire of the Japanese to engage with the outside world. It is one of six legal codes that exists today, the other five being the Commercial Code, the Criminal Code, the Constitution, the Code of Criminal Procedure and the Code of Civil Procedure.
Japan's government and judicial structure
Key government agencies
Key government agencies and industry associations need to be consulted throughout the process of setting up a business in Japan. Some of these agencies can also be useful for providing advice and initiating contacts.
The main agencies and their areas of authority relating to foreign businesses are:
| Government agency | Responsibilities | Website |
|---|---|---|
| Ministry of Economy, Trade and Industry (METI) | Exercises jurisdiction over industrial policies, macroeconomic policies, trade related policies for industrial and economic development of the country. | meti.go.jp/ english |
| Ministry of Finance (MOF) | MOF has a number of vital functions, including the Budget Bureau, Tax Bureau / Agency, Financial Services Authority and Customs. | mof.go.jp/ english |
| Japan Customs | Under the MOF, Japan Customs is responsible for levying tariffs and collecting tax revenue, as well as facilitating trade and keeping track of Japan’s trade statistics. | customs. go.jp/english/ index.htm |
| National Tax Agency (NTA) | Under the MOF, the NTA’s main responsibility is for collecting taxes. | nta.go.jp/ english/ index.htm |
| Financial Services Agency (FSA) | Under the MOF, FSA engages in financial regulation with the aim enhance national welfare through sustainable corporate and economic growth and stable asset building. | fsa.go.jp/en |
| Ministry of Agriculture, Forestry and Fisheries (MAFF) | MAFF is responsible for pursuing a stable supply of safe food, expansion of food markets, strengthening agriculture, forestry and fisheries. | maff.go.jp/e |
| Ministry of Health, Labor and Welfare (MHLW) | MHLW provides services related to health, healthcare and drug approval and labour and welfare benefits, including pensions. | mhlw.go.jp/ english |
| Ministry of Internal Affairs and Communication (MIC) | Covers a wide array of roles from the improvement of administrative management, local government administration and finance, elections, fire and disaster prevention, information and communications, to postal administration, as well as the basic systems supporting the economic and social activities of the citizens. | soumu.go.jp/ english |
| Japan External Trade Organization (JETRO) | A government related organisation promoting Japanese trade and investment in domestic and foreign companies to boost economic growth and community involvement. | jetro.go.jp/ en/jetro |
Free Trade and Special Economic Zones
Japan has three Free Zones (FZs) and 10 National Strategic Special Zones (NSSZs). Two of three FZs are located on the island of Okinawa and the third is in Niigata Prefecture, the Free Port of Niigata. The Naha FZ in Okinawa favours shipbuilding, cargo handling and general trading, while the Okinawa FZ focuses more on technology, including semiconductors and chips. The Niigata FZ focuses on cargo and international distribution, along with energy. All offer a variety of tax benefits, as well as duty free treatment for imports for manufacturing and re-export.
The 10 NSSZs were developed to attract investment into key sectors and as testing grounds for regulatory reforms. They are less focused on trade but offer a range of incentives for both foreign and domestic investors. They are shown in the map below.
National Strategic Special Zones
Japan-Australia bilateral relationship
Japan and Australia re-established diplomatic relations in 1952, although informal relations date back to the late 1800s. The relationship is now built on strong political, economic and security ties. In 2014, Japan and Australia elevated bilateral relations to a Special Strategic Relationship, which pledged cooperation on economic, security and defence, people-to-people exchanges, and international and regional issues. In 2015, the Japan - Australia Economic Partnership Agreement came into force. Meetings between both countries Prime Ministers have increased over the past five years driven by shared strategic and commercial interests. Japan is Australia’s second largest trading partner and the third-largest foreign direct investor in Australia in 2024.
Both Japan and Australia are active members of the RCEP and the CPTPP. The RCEP, which entered into force on 1 January 2022, enables cross-border movement of business people, facilitates cross-border digital trade and enhances the investment environment for Australian investors in RCEP signatory economies.
Useful contacts and support resources
Government organisations
Australian Department of Foreign Affairs and Trade (DFAT)
DFAT manages Australia’s international network, including in Japan. Australia has an Embassy in Tokyo, and a Consulate-General in Osaka.
Australian Trade and Investment Commission (Austrade)
Austrade is the Australian Government agency responsible for facilitating international trade and investment. Austrade can provide advice on the market, potential in-market partners and export marketing services. Austrade has offices in Tokyo and Osaka.
Export Finance Australia (EFA)
EFA provides information, support and export finance solutions to Australian businesses looking to expand overseas.
State government agencies
Many state government agencies have representatives or offices in Japan, including New South Wales, Queensland, Victoria, South Australia, Western Australia and Tasmania.
Business and industry associations
Australia and New Zealand Chamber of Commerce in Japan
The Australian and New Zealand Chamber of Commerce in Japan represents and promotes Australian businesses operating in Japan. ANZCCJ coordinates a regular program of business seminars, networking and social functions for the business community in Japan.
Australia Japan Business Co-operation Committee
The Australia Japan Business Co-operation Committee promotes bilateral trade and investment opportunities between Australia and Japan.
Export Council of Australia
The Export Council of Australia is the peak industry body for the Australian export community.
Programs and support
Go Global Toolkit
Austrade's Go Global Toolkit provides information, tools and support to grow your business globally through a range of digital platforms for every stage of the export journey.
Export Market Development Grants (EMDG)
Austrade seeks to help small to medium Australian enterprises grow their exports in international markets through their EMDG grant program.
Industry Growth Program
The Industry Growth Program supports innovative SMEs undertaking commercialisation or growth projects in the National Reconstruction Fund priority areas.
State or territory government trade and investment agencies may also run programs and provide support to businesses looking to expand into international markets. Please consult your relevant state or territory agency for more information.
References
A select list of sources used in the development of this publication are included below.
Australian Department of Foreign Affairs and Trade
Australian Trade and Investment Commission (Austrade)
Baker Mckenzie
Chambers and Partners
Energy Information Administration (US)
Euromonitor
EU - Japan Business Centre
EY
Freedom House
FitchRatings
Foreign Affairs
Goldman Sachs
GR Japan
Healy Consultants
Heritage Foundation
IMD
IMF
International Comparative Legal Guide
International Federation of Accountants
International Forum of Independent Audit Regulators
Japan Association of Overseas Students
Japan Bankers Association
Japan Institute of CPAs
JETRO
JTB Tourism Research Centre
Lowy Institute
New York Times
Notre Dame
OECD
PWC
Tech in Asia
The Heritage Foundation
Transparency International
S&P Global
Statista
Stockholm International Peace Research Institute
United Nations Council of Trade and Development
US Chamber of Commerce
US Department of State
US International Trade Administration
Japan Government (various sources)
Transparency International
We Are Social
World Bank
A note on currency
All money amounts are in Australian dollars unless otherwise indicated.
Exchange rate used is the historical rate for the previous 12 months.
AUD 1 = JPY 97.0162
JPY 1 = AUD 0.0103
AUD 1 = USD 0.6482
USD 1 = AUD 1.5427
Acknowledgements
Asialink Business gratefully acknowledges the assistance and information from the following organisations in the production of this Doing Business Guide:
Austrade
Department of Foreign Affairs and Trade
Australia Japan Business Cooperation Committee
Richard Andrews
Cristina Merino, JA Network
Disclaimer
This publication contains Japan and industry general information and does not address the circumstances of any particular individual or entity. While all efforts have been made by Asialink Business to ensure that the data and information provided herein are accurate, the accuracy of the information in the future cannot be guaranteed.
Users of this document should undertake their own independent analysis and obtain appropriate professional advice, if required, before acting upon such information in any given situation. Asialink Business accepts no liability for any loss which may arise from the use of the information contained in this publication.
eproduction of any part of this publication without prior written approval of Asialink Business is strictly prohibited. The information in this document is accurate as of November 2025.