Japan is a strong global market with a lot of promise for many companies ready to expand their business internationally. Japan may be a relatively small island from a global perspective, and yet the location you choose to establish your Japanese partners, customer base, and subsidiary is likely going to be a make or break decision, so you should make sure you know the best place for doing business in Japan for your company before deciding where to start.
Are you looking to expand into the Japanese market? Then you should know about Yokohama City.
Yokohama is the second largest city in Japan by population, and is historically one of Japan’s very first cities to truly embrace international visitors and businesses. Even today, Yokohama is one of the best locations for international companies looking to establish a business office in Japan, and if you aren’t aware of the powerful benefits that being in Yokohama can have for your company, you’re risking missing out on a great opportunity for growth.
We have compiled a list of some of the top reasons why you should choose Yokohama when doing business in and expanding into Japan:
Top 8 reasons why Yokohama City could be the best place for doing business in Japan
1. Strategic Location
Yokohama City is a major commercial and industrial hub within the Greater Tokyo Metropolitan area, the world’s largest city economy. In fact, Yokohama is the second largest city in Japan, with a higher population than other major cities like Kyoto, and Osaka.
As a massive market, the Greater Tokyo Area provides businesses with the densest population of potential partners and customers, allowing for a full understanding of the needs and challenges that could arise when making your foray into the Japanese market, while also providing you with the best starting place for success while doing business in Japan.
Yokohama and the Greater Tokyo Metropolitan Area are geographically located near the very center of Japan as well, meaning domestic flights to northern Hokkaido or southern Kyushu are both equally close and convenient.
Yokohama is not only located in the most vibrant, influential, and central market in Japan domestically, it is extremely easy to access. Those unfamiliar with the area might think that to access the potential clients and partners in Tokyo that your only choice would have to rent or purchase expensive office space within central Tokyo. But in reality, locating in Yokohama means that you have 30 minute access from Yokohama to the very center of Tokyo via normal train lines. Many international cities have commutes from one side of the city to the other that would take more than 30 minutes, but in Yokohama, you can reach into the very center of Tokyo in just half an hour!
However, if you are traveling to do business or meet someone in a different major city in Japan, you can do so easily via the bullet train or shinkansen from Shin-Yokohama station: it only takes only around 2 hours to reach Kyoto or Osaka.
And if your business takes you to other areas of Asia or you need to travel back to your home country, Yokohama is located very close to Haneda and Narita airports, two of the very largest international airports in all of Japan, eliminating the need for lengthy layovers or transfers that you would need if you were located in other cities around Japan.
3. Highly Skilled Workforce
Besides being the second largest city in Japan by population, Yokohama is also the location for 157 academic and R&D institutions, and one of the densest concentration of engineers in the country (over 140,000 engineers in total!)
Out of the 26(!) universities in the city, over a third are specifically known for STEM (Science, Technology, Engineering, and Mathematics). These universities collaborate in research with public and private entities, including international universities, on advanced R&D projects.
The high concentration of skilled workers in Yokohama means that as a foreign company establishing a base in Japan for the first time, you will have access to a great pool of talent to set up your Japan rep or team and take those first steps toward success in a new country.
4. Innovative Culture
Yokohama is known for its thriving R&D landscape: Apple chose to set up its largest Asian R&D center in Yokohama, and many other international corporations have done the same, making Yokohama a hub for innovation and groundbreaking research in Japan.
In addition, the City of Yokohama has put strong efforts into supporting its growing startup ecosystem in recent years, making sure that entrepreneurs and business owners choosing Yokohama when looking to start and grow their business in Japan have resources and opportunities.
Also, Yokohama is known historically as a Japanese city that has always been very accepting and welcoming to international influence and ideas. A major port city in Japan, Yokohama was one of the first to accept international trade, and as such was the starting place for many international innovations in Japan. Japan’s first newspaper, ice cream, and beer all started in Yokohama.
5. Industry Leaders
Beyond R&D, Yokohama is home to businesses of every size and industry, but some of the industries in the city stand out for their density and activity, providing an especially ripe opportunity for international companies looking to find clients, partners, and industry-specific talent and equipment.
Yokohama is a hub for the mobility and transportation industry in Japan. International businesspeople may already be aware of the name “Yokohama” from the Yokohama Tires brand, but the city’s industry is known within Japan as being much broader than just tires. Yokohama could very well be the best place for international mobility and transportation companies doing business in Japan, and many huge players already agree. Major international and domestic automaker and parts manufacturers are heavily concentrated in Yokohama, with Bosch, Nissan, Ducati, and many more, which attract even more companies, providing a rich ecosystem for international companies to plug in and connect with.
The Life Sciences also forms another major industrial hub in Yokohama. The city has been purposefully working to enrich its Life Science ecosystem for the past 30 years, which has given rise to a highly active and collaborative community which includes major universities and R&D facilities, and major players like Chugai Pharmaceuticals and Shiseido. One of the best things about working in the Life Sciences in Yokohama is all of the support available: including major partnering events, an open innovation platform, and bountiful wet lab space.
The IT and Advanced Manufacturing industry is very strong in the city as well, and tech companies have a lot to love about doing business in Yokohama. Just like the Life Sciences, a specialized collaboration platform focused on IoT, big data, AI, and robotics is pushing innovation and projects in the city. Additionally, the high concentration of R&D centers and engineers in Yokohama means that tech companies have a lot of talent to draw from, and there is the incubation space needed for a soft landing space in Japan when establishing your business’s first Japanese office.
6. Quality of Life
One of the major advantages of establishing your Japanese base in Yokohama is the Quality of Life benefits that you and your workers can enjoy while living, working, and playing in Yokohama.
Many workers in the Tokyo Metropolitan area would prefer to live in Yokohama due to lower costs, the beautiful ocean views, and the open atmosphere. In fact, Yokohama has been consistently rated as a top destination in Japan for tourism, quality of living, and in “best city” rankings, both for foreigners and local Japanese. Companies located in Yokohama can reduce commute times for those employees.
And for foreign workers, Yokohama offers a diverse, accepting culture friendly to international travelers. Yokohama is home to Japan’s largest Chinatown, and Western influence is baked into many of the oldest standing buildings in the city.
Yokohama also has more than ten international schools, and multiple hospitals equipped with translators, making it extremely family friendly to any workers your international business brings with it to Japan. Community groups can provide interpreters, multilingual consultation, Japanese language classes, and more. Existing employees and their families can make the transition into Japan with you and your business knowing they have the support to live well in a new country.
In addition, Yokohama has been working hard to become a sustainable smart city, by working to reduce carbon emissions, preserve the environment, and improve life for its citizens by following the Sustainable Development Goals.
7. Cost and Options
One of the major reasons that both employers and employees of companies in Tokyo AND Yokohama prefer to live in Yokohama is simple: cost. For a company just getting started doing business in Japan, the best place is one that will let you save cost on office space while you’re getting your feet under you.
For employers, the benefits are immediate. Office rent in Yokohama is on average 40% cheaper than Tokyo.
And there are a variety of great options of business districts within the city as well. Minato Mirai 21, the city’s fastest growing district is right on the waterfront and is attracting innovation centers from all over the world. Shin-Yokohama Station district is number one for accessibility: while transportation in and out of Yokohama is easy from any of the districts, if you choose to locate right next to Shin Yokohama Station you are walking distance from a quick train to Tokyo or a bullet train to other cities.
8. Business Support and Incentives
Beyond just cheaper rent, Yokohama has support systems and incentive packages in place to help foreign companies get their start in Yokohama with ease.
Yokohama offers many different kinds of subsidies and tax incentives for various projects, including establishment of major HQ/branch offices, factories and R&D facilities, support for growth industries and budding entrepreneurs, and for office space leasing. Yokohama City also works with the larger prefecture of Japan that it is the capital of to offer an even wider menu of incentives to help you find the right options for you and your company.
The city is also host to a number of startup and incubation offices, some of which provide specialized support for foreign companies setting up office in Yokohama. Through the city’s partnerships with local branches of the Japan External Trade Organization (JETRO) and other partners, it is able to offer a wealth of support to any company looking to establish its first office in Japan.
There are even more reasons why Yokohama could be the best place for international companies starting doing business in Japan. you are interested in expanding into Japan and want to learn more about Yokohama, please feel free to contact the City of Yokohama’s Representative Office to the Americas or any of its other global offices.