Pernille Rudlin - Rudlin Consulting

About Pernille Rudlin

Pernille Rudlin was brought up partly in Japan and partly in the UK. She is fluent in Japanese, and lived in Japan for 9 years.

She spent nearly a decade at Mitsubishi Corporation working in their London operations and Tokyo headquarters in sales and marketing and corporate planning and also including a stint in their International Human Resource Development Office.

More recently she had a global senior role as Director of External Relations, International Business, at Fujitsu, the leading Japanese information and communication technology company and the biggest Japanese employer in the UK, focusing on ensuring the company’s corporate messages in Japan reach the world outside.

Pernille Rudlin holds a B.A. with honours from Oxford University in Modern History and Economics and an M.B.A. from INSEAD and she is the author of several books and articles on cross cultural communications and business.

Since starting Japan Intercultural Consulting’s operations in Europe in 2004, Pernille has conducted seminars for Japanese and European companies in Belgium, Germany, Italy, Japan, the Netherlands, Switzerland, UAE, the UK and the USA, on Japanese cultural topics, post merger integration and on working with different European cultures.

Pernille is a non-executive director of Japan House London, an Associate of the Centre for Japanese Studies at the University of East Anglia and she is also a trustee of the Japan Society of the UK.

Find more about me on:

Here are my most recent posts

Biggest European companies in Japan

Having looked at the largest foreign-owned companies in Japan in a previous post, we thought we’d take a look at the largest companies in Japan owned by European companies in more detail.

By employee number, they are:

Mitsubishi Fuso Truck – Germany (89.2% owned by Daimler), #3 overall, 10,633 employees
Bosch – Germany, #10 overall, 5,254 employees
Chugai Pharmaceuticals – Switzerland (59.8% owned by Roche), #12 overall, 5,026 employees
AstraZeneca – UK, #17 overall, 3,700 employees
IKEA Japan – Netherlands (yes, not Sweden, it’s owned by Ingka Group, which is a franchisee of Inter IKEA Systems B.V.), #19 overall, 3,602 employees
NOK – Germany (25% owned by Freudenberg Group – maybe not strictly speaking foreign owned therefore), #21 overall, 3,337 employees
DHL Supply Chain – Germany, #24 overall, 3,000 employees
Compass Group Japan – UK, #26 overall, 2,684 employees
Novartis Pharma – Switzerland, #30 overall, 2,600 employees
GlaxoSmithKline – UK, #32 overall, 2,500 employees
Louis Vuitton Japan – France, #32 overall, 2,500 employees
Nestle Japan – Switzerland, #34 overall, 2,400 employees
L’Oreal – France, #35 overall, 2,350 employees
Veolia Jenets – France, #41 overall, 2,000 employees
Phillips Japan – Netherlands, #43 overall, 1,942 employees
DHL Japan – Germany, #45 overall, 1,900 employees
Pioneer – Sweden, #46 overall, 1,859 employees
SAP Japan – Germany, #49 overall, 1,727 employees
Boehringer Ingelheim – Germany, #50 overall, 1,700 employees
Valeo Japan – France, #52 overall, 1,660 employees
Bayer – Germany, #56 overall, 1,591 employees
Ichikoh industries – France (61% owned by Valeo), #60 overall, 1,485 employees
Cap Gemini – France, #62 overall, 1,400 employees
Sanofi – France – #65 overall, 1,334 employees
Autoliv – Sweden – #66 overall, 1,332 employees
Lush – UK – #67 overall, 1,300 employees
Johnson Controls – Ireland, #70 overall, 1,282 employees
Novo Nordisk – Denmark, #72 overall, 1,274 employees
Sika – Switzerland, #80 overall, 1,136 employees
ICON Clinical Research – Ireland, #85 overall, 1,000 employees
NN Life Insurance – Netherlands, #87 overall, 975 employees
Zurich Insurance – Switzerland, #89 overall, 946 employees

= 33 BASF Japan – Germany, #92 overall, 920 employees

=33 GKN Driveline Japan – UK, #92 overall, 920 employees

35. Mahle Engine Components Japan – Germany, #96 overall, 880 employees

36. Lacoste Japan – France, #98 overall, 851 employees

37. Dassault Systems – France, #100 overall, 850 employees

There are many missing names from this, so it is just indicative, based on whatever company responded to Toyo Keizai’s enquiries. but overall it seems that European companies represent around 37% of the largest foreign companies in Japan. American companies are around 46% of the largest foreign companies in Japan, with the remaining 17% being owned by companies from Taiwan, Israel, India, China, Hong Kong, Canada and Australia – plus Japan Display, owned by a company, Ichigo Trust, registered in the Cayman Islands, which is technically UK territory.

10 of the 37 are German, 9 French, 6 British (or 7 if you count Japan Display), 5 Swiss, 3 Dutch, 3 Swedish, 2 Irish, 1 Danish. The missing major European economies are Italy and Spain. Judging by size of economy, the UK looks a bit underweight.

8 are pharmaceutical manufacturers or clinical research related and the other main categories are automotive manufacturing/engineering and consumer brands.

At least 6 (7 if you count Japan Display) are the result of acquisitions or at least a major investment in Japanese companies – Compass Group acquiring NKS for example.

If your company is looking to enter or expand in the Japanese market, our partner Japan Intercultural Consulting is holding online seminars on Successful Business Trips to Japan in September. Further details here.

For more content like this, subscribe to the free Rudlin Consulting Newsletter. 最新の在欧日系企業の状況については無料の月刊Rudlin Consulting ニューズレターにご登録ください。

What’s going on in Japanese HR? – online seminar 24 September 15:00-16:30 BST/10:00-11:30 EST

Human resource management in Japan has changed radically over the past decade. What does this mean if your company has employees in Japan, or your parent company is Japanese?

Join our online seminar (September 24th 15:00-16:30 UK time/10:00-11:30 EST) to find out.

We’ll look at:

The JTC – Japanese Traditional Company – lifetime employment, seniority based promotion and the company union
The twice yearly bonus season
The Ice Age generation and the Yutori generation
Job gata/job-based hiring, job type system
Haizoku gacha – random assignments
Re-skilling
Black company, overtime and karoshi (death from overwork)
Hara hara – harassing about harassment
The end of the nomikai (after work drinks party)?
Taishoku daiko – proxy quitting
Remote work and hybrid working in Japan
Purpose

Note: Direct competitors of Japan Intercultural Consulting and their employees are not allowed to enroll in this seminar.

Participant numbers will be limited to 25 to ensure interactivity

We reserve the right to postpone or cancel the seminar should there not be sufficient participant numbers

Two swallows make a summer?

We were somewhat sceptical when the Financial Times greeted Mitsubishi Corporation’s $1bn acquisition of Norwegian company Grieg Seafood’s salmon farms as being part of a record breaking acquisition spree by Japanese companies. It seemed that here in Europe at least, Japanese acquisitions had not really picked up momentum at all, compared to the pre Brexit and pre pandemic years.

Then today it was announced that Yusen Logistics is spending $1.45bn on acquiring Dutch healthcare logistics company Movianto – subject to EU approval. NYK, the parent company of Yusen Logistics, had already acquired a majority stake in Swedish company Northern Offshore this year and UK company Global Freight Solutions and Dutch company Parts Express last year. Movianto has around 5,400 employees in Europe, primarily in the Netherlands, France and UK.

Although Mitsubishi Corporation has a long history of involvement in salmon and seafood, stretching back to the mid 20th century, as the Financial Times article points out, the acquisition of salmon farms represents a more general trend of Japanese food related companies strengthening Japan’s involvement in the food supply chain, from farming through to restaurant chains. The most recent entrants into our Top 30 largest Japanese companies are Fulham Shore (The Real Greek and Franco Manca restaurant chains, now owned by Toridoll) and Yo! Sushi, now owned by Zensho.

Yusen Logistics is already in our Top 30 largest Japanese companies in the UK, with 1,863 employees. If Movianto UK remains an independent company rather than merged into Yusen Logistics, it too will be in the Top 30, with 1,354 employees. If they are merged, Yusen Logistics will be the 4th largest Japanese company in the UK, after Nissan, Fujitsu and Kwik-Fit (owned by Itochu).

Both NYK and Mitsubishi Corporation are in the same Mitsubishi group of companies, who have been key players in Japan’s global supply chains for the past 150 years.

Rudlin Consulting is the Europe, Middle East and Africa Representative of Japan Intercultural Consulting, which provides post-merger integration cultural training and consulting.

Biggest foreign companies in Japan

It all depends on what you mean by big, of course. And, it turns out, what you mean by foreign.

Our favourite way of measuring size and growth at Rudlin Consulting has been by numbers of employees, because ranking by capital or turnover risks comparing apples to oranges. Taking a look at the rankings compiled by Toyo Keizai, the top 10 foreign companies in Japan in terms of numbers of employees are:

Accenture (25,000 employees)
Gibraltar Life Insurance (12,003 – US parent company Prudential)
Mitsubishi Fuso Truck and Bus (10,633 – German parent company Daimler Truck)
Metlife (8,569 US parent company)
Prudential Life Insurance (6,169 US parent company)
AIG (6,064 US parent company)
Proterial (5,759 was Hitachi Metals, now owned by Bain)
Sharp (5,603, now owned by Taiwan’s Foxconn/Hon Hai)
Starbucks (5,505 US parent company)
Bosch (5,254 German parent company)

It’s interesting to note that the majority of these companies are services sector, particularly insurance companies. Three out of the four manufacturing companies were originally Japanese but have been acquired by foreign companies. Some of the life insurance companies have also built up presence in Japan through acquisition, but are also divesting. Bosch also acquired a few Japan owned businesses but also divested its stake in Denso.

Toyo Keizai has not designated a nationality or parent company for Accenture, presumably because of being a federation of local partnerships. Similarly, EY and Deloitte should be in the top 10 as both employ over 10,000 but because of the partnership structure are not included in Toyo Keizai Rankings.

The rankings by capital (not market capitalization) are dominated by financial services sector companies:

Nippon Paint (now majority owned by Singapore based Wuthelam Holdings)
Metlife
IBM Japan
BNP Paribas Securities
Citigroup Securities
Axa Life
Goldman Sachs Securities
Bank of America Securities
Gibraltar Life
JP Morgan Securities

The rankings by turnover are:

Sharp
Nippon Paint
Microsoft Japan
Chugai (owned by Roche)
Proterial
IBM Japan
Mitsubishi Fuso Truck
NOK (owned by German company Freudenberg)
Accenture
Mercedes Benz

60% of these companies were originally Japanese.

Looking at all three rankings, it’s not surprising to see that these companies are long established in Japan. Looking at the newcomers, and the sectors of the future, there is a clear trend of IT, systems and software companies entering the Japanese market, primarily from the USA, but also France, Germany, Luxembourg, South Korea, Taiwan, Vietnam, and the UK. We’ve certainly seen a marked increase in enquiries for our services at Japan Intercultural Consulting from non-Japanese companies in this sector over the past couple of years. Japanese companies are embarking on digital transformation and further globalization, and the organisational change that this entails throws up plenty of cross cultural challenges both for the suppliers of digital technology and their clients.

Japan Intercultural Consulting holds regular online seminars covering topics such as cross cultural communications, business trips to Japan and what Japanese customers want.

Japanese financial services in the UK and EMEA

The UK’s financial regulatory authority has announced further plans to ease the rules for banks and insurers in the UK. This is in line with both previous and current British government policy of putting more emphasis on growth and investment over concerns about safety and risk.

It is also part of trying to find a benefit to Brexit, now that the UK does not need to comply with EU rules. Reducing the regulatory burden might free up resources for Japanese financial services companies to invest in innovation, or support their clients’ investment in infrastructure and zero carbon projects in the EMEA region.

Japanese financial services capital has flowed out of the UK into Ireland, Luxembourg and the Netherlands

Although Japanese financial services companies have maintained the scale of their presence in the UK since Brexit in terms of employee numbers, Japanese capital has flowed out of the UK financial services sector over the past few years. There have been inflows of Japanese financial services investment into Ireland, Luxembourg and the Netherlands.* The former is undoubtedly related to the large number of Japanese aircraft leasing companies in Ireland, attracted by the beneficial taxation regime. Luxembourg is host to many Japan owned investment funds and the regional headquarters of the major Japanese insurers.

Amsterdam the post Brexit choice for EU regional HQ

As for the flow of Japanese capital to the Netherlands, this is due to the pull of Japanese corporate customers having moved their regional headquarters there, after Brexit. As EU regulations insist that financial services firms have substantial capital and key decision makers in the European Union, many Japanese banks therefore chose Amsterdam for their EU regional headquarters too.

There are now around 10,000 Japanese nationals in the Netherlands – a 50% increase on a decade ago. The key decision makers at Japanese financial services firms in the region are not all Japanese however. Often the EU subsidiary reports into a UK based EMEA holding company and both the EU and UK boards of those companies have a majority of European directors.

Universal banking leading to restructuring in EMEA

Japanese banks have undertaken substantial restructuring in the region, merging their securities business into the banking side, to become universal banks. This has also resulted in the UK becoming host to corporate function services for the whole region.

It’s clear that London continues to have an attraction as a global financial centre in terms of a large and specialist labour pool and infrastructure, as well as a place to innovate. A loosening of regulations compared to the EU’s more stringent regime will strengthen this appeal.

*data taken from https://www.mof.go.jp/english/policy/international_policy/reference/balance_of_payments/ebpfdii.htm

This article originally appeared in Japanese in the Teikoku Databank News on 12 March 2025

The puzzle of Japanese foreign direct investment in the UK

Something has been puzzling me for a few years about Japanese foreign investment in the UK. The net investment by Japanese companies in the British “communications” sector since 2016 is US$55bn, over three times more than the next largest net investment, which was in the food manufacturing sector.

There have been various acquisitions and investments over the past few years in British food manufacturers that I am aware of; Zensho acquiring Taiko Foods and Yo! Sushi, Mizkan acquiring various British food brands and factories for Branston, Haywards and Sarsons, Calbee acquiring Seabrook Crisps and various acquisitions in fish processing.

But what Japanese “communications” companies could have invested billions in the UK? The Japanese term used by the Ministry of Finance for the communications sector is 通信業 (tsuushingyou) and the main players in Japan in this sector (perhaps in the UK we would use the term telecommunications) are considered to be NTT, KDDI and SoftBank. NTT and KDDI have been investing in data centers in the UK in recent years, and NTT placed its global non-Japan HQ in London, but surely this would not have cost tens of billions. Which leaves SoftBank.

SoftBank spent US$6.5bn on acquiring ARM in 2016, which may account for the amount shown in 2017. But what about the $10bns thereafter, and the large withdrawal of over US$20bn in 2020? I am guessing this must be money moving in and out of SoftBank’s Vision Fund, which is headquartered in London and managed by SoftBank Investment Advisers.

Another puzzle is what is going on in the services sector – US$33bn was invested in Britain 2016 and then a disinvestment of US$32bn in 2018, leaving a net investment of only US$661m. “Services” is a very large umbrella, and may have covered the shifting of European logistics, warehousing and headquarter services functions out of the UK and the capital to go with it, to the EU in preparation for Brexit.

There were disinvestments in the finance and insurance sector in 2018, 2019 and 2022 but overall a net investment of US$6.7bn. Judging by the dates, the net positive total is “despite” Brexit and the Truss budget.

Transportation equipment manufacturing, which would include car manufacturing saw a few instances of disinvestment, primarily related to Honda closing Swindon in 2021 and some of its suppliers shutting up shop in the UK. Overall, despite some tough years, the sector is $3bn in the black, in terms of net investment since 2016, helped by a $2bn investment in 2024. Japanese net investment in almost all other sectors apart from services has outstripped this, however.

For comparison, the charts for the main investments in Germany and the Netherlands are given below:

Comparing by sector, in finance and insurance, the Netherlands has yet again been the clear beneficiary of Brexit, receiving around US$21bn in net investment, with Germany receiving around around US$9bn, compared to US$6.7bn for the UK.

For transportation equipment manufacturing, Germany is the clear winner with US$9.5bn net investment 2016-2024, compared to US$3.7bn to the UK and US$1.75bn to the Netherlands – even though Germany does not host any Japanese OEM car manufacturing.

The investment by Japanese companies into the UK “communications” sector at US$55bn dwarfs the US$2.8bn invested in the Netherlands and US$1.5bn invested in Germany – which does reinforce the view that this is a SoftBank Vision Fund driven figure, rather than any actual investment in the British telecommunications infrastructure. You might have expected to see comparable investments from NTT in Germany and the Netherlands if it had been a business decision rather than an investment fund decision.

Overall, the comparative advantages in trade and investment between the three economies, in Japanese eyes is clear – Britain – digital, services and communications (despite the SoftBank reality distortion effect), Germany – automotive and chemical related manufacturing and corporate banking and the Netherlands – continuing to be strong in food manufacturing, but now also seen as an EU base for financial services headquarters – effective from a tax perspective, but not needing as many employees as manufacturing.

For further insights on Japanese foreign direct investment in the UK and EMEA financial services sector, our Japanese Financial Services in the UK and EMEA 2025 report and directory can be purchased and downloaded here.

What is a Japanese company anyway?

One of many jobs I did not get over the years was a board position for an investment trust focused on Japan. In the “any other questions for us?” bit at the end, I raised the issue of “how do you define a Japanese company? Is it enough just to say it is listed on the Tokyo Stock Exchange? Or headquartered in Japan?” In retrospect, a foolish question to ask at that point and the chair simply shut me down and said that was a topic for debate for another day. Which of course never happened. And a year or two after that interview, I had a certain amount of schadenfreude watching the fund’s Net Asset Value take a dive.

Is SoftBank?

What triggered that question was that the fund had made a lot of money over the years investing in SoftBank, which is listed on the Tokyo Stock Exchange and is headquartered in Japan, but to my mind, not really a Japanese company. This is not some racist point about the founder, Masayoshi Son, being ethnically Korean. More that, as an investor, rather than just simply thinking of your portfolio as a series of aggregated regional or national risks, with each regional or national economy moving in a particular direction and counterbalancing each other, in the case of Japanese companies, another risk to consider might be the particular way that traditional Japanese companies behave and whether the fund is investing in those traditional Japanese companies, or emerging ones.

Nissan – run by a Mexican, using Chinese batteries, manufactured in the UK for sale to the US?

Even some of those traditional Japanese companies are no longer owned by Japanese shareholders. I was reminded of this by the recent coverage in the UK of the British government contributing a substantial part of the £1bn funding for an AESC electric vehicle battery factory to be built in Sunderland, to supply Nissan. AESC is described as “Japan-owned” but actually the controlling majority of shares is owned by Envision, a Shanghai based company. AESC’s headquarters are in Japan, however, and Nissan still owns some shares in it.

That this news came a day after the announcement of a UK-US trade deal which will (if signed) dramatically reduce tariffs on UK cars being exported to the USA does not seem a coincidence – even though some commentators say this scanty deal was rushed through so as to be announced in time for the 80th anniversary VE day.

Another announcement the UK government might have wanted to synchronise with was the leaked news that that the new, Mexican CEO of Nissan will announce tomorrow (13th May) plans to cut 20,000 jobs worldwide. Looking at the capacity utilisation and sales data for Nissan, Japan, the USA and China look likely to bear the brunt of this. Production has already ended in Argentina and India. Nissan will also announce that it is not going ahead with building a battery factory in Japan. So, using the Sunderland plant and the AESC factory for batteries for the new Leaf, and exporting to the USA looks like a plausible plan now and one that the UK government is presumably also happy to back.

Other Nissan suppliers, traditionally Japanese, are also now foreign owned, depending on how you classify this. Marelli (which used to be Calsonic Kansei in the UK) and Vantec (a logistics company) are both now owned by KKR Japan – the Japanese operation of the US owned private equity and investment company, Kohlberg Kravis Roberts.

Back to SoftBank again

If you look at our 30 largest Japan-owned companies in the UK, employing around 65,000 people, you’ll see some surprising names such as Kwik-Fit and The Fulham Shore (owners of The Real Greek and Franca Manca), which was acquired by Toridoll, who have other more obviously Japanese brands such as Marugame Udon. Other companies such as Stapleton’s Tyre Services, the Financial Times, Micheldever Tyre Services, Building Design Partnership and Liberata are also all acquisitions by Japanese companies. And of course, ARM, which was acquired by SoftBank in 2016 An acquisition which, according to the British government at the time, showed Britain’s economy can be successful after leaving the EU. SoftBank then tried to sell ARM to Nvidia, and finally floated it in 2023 – on NASDAQ, rather than the London Stock Exchange.

Largest Japan owned companies in the UK – 2024

The largest Japan owned companies in the UK employ around 65,000 people and have grown around 5% on average in terms of employee numbers in the year 2023 to 2024.

The top 5

The top three largest companies are the same as in 2015/6 – Nissan Motor Manufacturing with around 7,000 employees, down 500 from 2015/6, Fujitsu Services, with around 6,000 employees, down from nearly 10,000 in 2015/6. The third largest company, Kwik-Fit (owned by Itochu) has around the same number of employees (5,000) as they did nine years ago.

Toyota Motor Manufacturing was the fourth largest Japan owned company in 2015/6 but has been overtaken by Dentsu UK and ARM (owned by SoftBank). Dentsu UK has grown significantly as a result of the merger of its UK regional operations – but also due to further acquisitions.

New entrants

New entrants for 2024 are the result of acquisitions in the food services sector – Toridoll, who acquired The Fulham Shore (brands including The Real Greek and Franco Manco), adding to their Marugame Udon chain, and Zensho, who acquired Yo! Sushi, through their purchase of Wonderfield, who also own Taiko Foods, a sushi supplier.

Notable growers

Companies which have grown at an above average rate over the past year include logistics companies Yusen Logistics and Vantec (owned by KKR Japan, mainly supplying Nissan), as well as other services sector companies such as SMBC Bank International, NTT Data UK and Dentsu International. In the manufacturing sector, Marelli Automotive Systems (also owned by KKR Japan) has grown significantly, but is still 4% down on nine years ago, whereas Hitachi Rail, which is quadruple the size it was in 2015/6, shrunk its workforce by 4% over the past year. Two companies with manufacturing in the UK – Mitsubishi Electric Air Conditioning and Fujifilm Diosynth Biotechnologies – have both doubled in size since 2015/6.

Drop outs

Those companies who have dropped out of the top 30 since 2015/6 are largely those who have divested, ceased or cut down manufacturing operations, such as Honda, Toyoda Gosei, Japan Tobacco (closing its Gallaher factory) and Princes (divested by Mitsubishi Corporation). Pilkington UK, acquired by Nippon Sheet Glass in 2006, has halved in size and car part manufacturers Unipres, Denso and Yazaki have all cut back their workforces significantly.

Non appearances

Several Japanese companies undoubtedly have more than 1,000 employees in the UK, but do not disclose this. Sony Europe, MUFG Bank and Mizuho Bank are all branches, so do not have to publish annual reports in the UK showing their employee numbers. Uniqlo only discloses employee numbers for the whole of Europe.

For further details, our Top 30 largest Japanese companies for 2024 is available for purchase and download online (£3+VAT) here.

Japanese companies in the UK 20 years on

After a three year gap due to the pandemic, my company has rejoined the Japanese Chamber of Commerce in the UK. My company was the first non-Japanese company, with no Japanese nationals working for it, to be allowed to become a member in 2004. This followed a change in the rules, in reaction to declining membership.

Back then, such non-Japanese companies were classified as “associate” members, and my company was allocated to the “local entrepreneurs” group. This time, we were allowed to join as a full member and we are in the “professional services” group.

Both the professional services group and the local entrepreneurs group have grown over the three years we were absent. Partly this was due to the pandemic, during which the Chamber meetings took place online, including for members of the Chamber to introduce their services through online webinars. This meant that members had the benefit of being able to promote their services and network with potential clients without having to attend Chamber meetings in London in person. Some members do not even have UK bases, because they can offer their services remotely.

Marketing to “Japanese” companies in the UK has to be much more than just being able to communicate in Japanese

The distinction between Japan originated and local companies is also blurring. Many of the traditional Japanese companies in the UK are not members of the chamber – I suspect not only because they are not based in London, but also because their senior executives are not Japanese. This localization continues, even for traditional Japanese companies based in London.

Trying to define membership by expatriate status of key managers has also become difficult. Looking at the latest Ministry of Foreign Affairs data for long term (mostly Japanese corporate expatriates) and permanent resident Japanese nationals in the UK, Germany and France, it is clear that if present trends continue, the number of permanent resident Japanese will outstrip the number of long term visa holding Japanese within the next five years in all three countries.

Local professional services companies who target Japanese companies have benefitted from this trend in that they can hire permanent resident Japanese people as employees, bringing with them Japanese language ability. However, as I have also experienced, the blurring of distinctions between Japanese and British, and increased familiarity with each other, means that marketing to “Japanese” companies in the UK has to be much more than just being able to communicate in Japanese.

This article by Pernille Rudlin originally appeared in Japanese in the Teikoku Databank News on 14th August 2024

Australia overtakes China as second largest host of Japanese nationals living overseas

The headline in Japan on the Japanese Ministry of Foreign Affairs latest data on Japanese nationals living overseas was that the number of Japanese living in China had dipped below 100,000 for the first time. This meant China was overtaken by Australia as the second largest host of Japanese nationals, below the USA, also for the first time.

The USA is still overwhelmingly the largest host, with over 413,000 Japanese nationals living there on permanent or long term visas, but there has been a gentle decline in numbers since 2018. Similarly, the UK, which has the sixth largest number of Japanese nationals (just over 64,000) peaked in 2019 and is now around 1% down on 2016. Germany, #8, has 12% more Japanese residents than it had in 2016 – a similar growth rate to Australia, and looks to be catching up with Brazil, which has had a 13% decline in Japanese nationals.

It may seem odd that Brazil and the USA have so many Japanese nationals considering the major migrations from Japan to those countries were at the end of the 19th and beginning of the 20th century, but this is because in many cases, the Japanese nationals are actually third or even fourth generation. Japan does not allow dual nationality, and nationality is determined by ‘jus sanguinis’ – at least one of the parents being Japanese, rather than being born in Japan. So many children of Japanese immigrants keep their parents’ nationality despite their birthplace. This is why the Ministry of Foreign Affairs data needs to be treated with caution. The data shows those Japanese who have registered with the embassy or consulate. Clearly, if you want your children to have Japanese nationality, despite being born overseas, you would need to register them. I suspect however, that many parents both register their children as Japanese nationals, but also enable their children to take the nationality of the country they were born in, if that is legally allowed – ‘jus soli’. Others may not register with the Embassy at all, to try to stay under the radar.

There would be no way for the Japanese Ministry of Foreign Affairs to check whether there were conflicting nationalities being claimed, until something forces the issue, such as inheritance tax to be paid in Japan, a pandemic or a change in the immigration and nationalization laws in the host country.

Separating out the numbers for permanent residents and those on long term visas (who are likely to be corporate expatriates) reveals the impact of legal changes, the pandemic and also long term shifts in Japanese corporate expatriation and Japanese who commit to “burying their bones” as it is said in Japanese, in a foreign country – probably due to having married and raised families in that country.

The rise of the permanent resident

If current trends continue, the number of Japanese who are permanent residents in the UK is set to overtake the number who are in the UK temporarily on working visas by around 2026 – a function of both the decline in Japanese corporate expatriates and a steady increase in the number of Japanese choosing to live permanently in the UK.

The other major host countries (more than 10,000 Japanese nationals) where more than half the Japanese nationals are permanent residents are Argentina (96.7%), Brazil (91.7%), Canada (67.9%) Australia (61.5%), New Zealand (60%), the USA (55.7%), Italy (55.1%) and Switzerland (65.7%).

A similar crossover of Japanese permanent residents exceeding long term visa holders may occur in Germany and France within the next 5 to 10 years if the trend is projected from 2012 – but the most recent data show that there has been a slight upturn in Japanese long term visa holders in both countries and a levelling off in the number of permanent residents.

Except in the Netherlands, the Brexit benefitter

The outlier in Europe in many ways is the Netherlands. Although there only are just over 10,000 Japanese nationals living there, this represents a 53% increase on 2014. Judging by the steady rise of long term visa holding Japanese – particularly around the Brexit years, there is no sign of the gap closing between permanent and long term Japanese nationals in the Netherlands. As noted in our recent report on Japanese financial services in Europe, Japanese banks have followed their Japanese clients and reacted to Brexit by opening or reinforcing their regional headquarters in the Netherlands with assets and capital, and Japanese expatriates would seem to have followed.

Our 2025 report on Japanese Financial Services in the UK and EMEA, with a directory of 300 Japanese financial services companies in the region – can be purchased and downloaded online here

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