Doing Business in Japan Can be Straightforward: Just Keep these 5 Areas in Mind

By Mike Kim / Special to The Japan News

10:00 JST, March 25, 2026

When I first started working in Japan in 2016, I never would have imagined that a decade later I would be running my own Tokyo-based AI consulting business. Today, my primary work is helping foreign AI startups build lasting customer relationships and partnerships with Japanese corporations. Over my years here, I have often heard from outsiders that Japan is “hard, challenging and slow.”

My experience has been the opposite.

Years ago, my friend Trae Stephens, a General Partner at Founders Fund, gave me an advance copy of Peter Thiel’s bestseller, “Zero to One,” when I visited his office just before it was published. I devoured the book and was particularly struck by one specific question Thiel asks: “What important truth do very few people agree with you on?” It’s a question I’ve reflected on ever since.

One “important truth” for me that few agree with is this: While most people believe Japan is an exceptionally challenging place to do business, I have found it to be very straightforward, provided you follow the rules.

Japan is famously a rule-based society. Walking through Tokyo’s train stations, you will see arrows on the floor and on signs in a quantity unlike any city in the world.

The same is true for business in Japan. The path can be just as predictable if you follow the rules. In my work scaling foreign startups here, these rules generally apply to five core areas. While the nuances are endless, a cultural awareness of these five areas changes the game for anyone doing business in Japan.

I hope these five considerations will serve you like the arrows in a Tokyo train station, pointing where to go and helping you avoid making things harder by needlessly going against the flow.

1. The digital first impression

Your first impression happens via email, so you must first get this right. One of the first decisions you face is the level of formality and whether to use Japanese honorifics or a Western style. It is a bit of a dance; you have to read your counterpart. My principle is to follow the counterpart’s lead, whether they use high formality or prefer a more Western style with you. Matching their tone shows you have a baseline understanding of the culture.

Level of politeness and attention to detail are also important. Japanese culture highly values both. You should pay close attention to the specificity of requests, such as finalizing the agenda for a meeting in advance, providing attendees and titles, or time-zone management. On top of that, standard business professionalism and timeliness in replies are always expected.

2. First meeting protocol

Once you’ve secured the in-person meeting, you will need to have some familiarity with the business card exchange (assuming the meeting is in Japan). As a foreigner, you won’t be expected to be a pro, but having some familiarity shows respect and limits distractions.

After the business card exchange at the beginning of the meeting, both companies will introduce themselves after the opening small talk is completed. In my experience, it is generally the case that since they are hosting you at their office, they will suggest they present their company first. However, if there is a natural opportunity, you can ask whether they would like to go first or would prefer for you to start. I have cringed on more than one occasion when a visitor obliviously dives into their own presentation and talks about themselves right away without checking with their hosts, signaling a lack of cultural awareness that can hurt efforts in the trust-building process.

3. Internal alignment and next steps

At the end of a meeting, your counterparts will likely say that they will have “internal discussions” and get back to you. They are referring to a consensus-building process known as nemawashi. This is something I’ve come to appreciate about business in Japan. While in other countries I’ve had people waste my time with meetings that lead nowhere or lack follow-up, in Japan I can trust that there is almost always a formal evaluation and decision-making process happening behind the scenes, and my time is productively being used.

Following the meeting, be sure to send your hosts a thank-you email for having you over to their office. In a culture that places a premium on politeness and attention to detail, failing to do this will be noticed. I aim to do it within 24 hours. In addition to saying thank you, I clearly summarize what was agreed upon, such as timelines and next steps.

4. Passing the relational and character test

Beyond the mechanics of the points above, you must pass the character test. Japan is fundamentally different in this way because a contract is seen as the start of a trusted, long-term relationship, not a short-term transaction.

To illustrate this, I often ask the founders I work with to compare their customer turnover in Japan to the rest of the world. Japan always wins on customer retention. It is not uncommon to see a 0% cancellation rate in Japan over a number of years, while other global markets fluctuate significantly. While the bar to forming customer or partner relationships is higher, the process of ending one is equally deliberate, taking time to close out. The reward is a long-term business relationship, one built on a foundation of trust and respect.

5. A beginning, not an end

While some emphasize the signing of a contract as a closed deal, in Japan I’ve come to celebrate that signature as the opening of a long-term partnership.

This relationship requires great care, a commitment to shared success, and a deep level of mutual respect. In Japan, corporations are looking for the business equivalent of a marriage rather than a casual date. Like any long-term union, there will be ups and downs. Navigating these requires bringing your best with intense commitment, honest conversations and sometimes a sincere apology. How you manage these moments will determine the duration of the relationship. If you manage these moments well, you can enjoy the long-term partnership and the financial benefits that come along with it.

If you are truly aware of these five areas and act on where the arrows lead, you are on your way to fruitful, long-term business relationships. Following these rules removes unnecessary friction. In a world of unpredictable markets, the stability and trust that characterize Japanese partnerships can make all the difference for your company, adding a stable asset to your international portfolio. I have seen firsthand how these durable Japanese partnerships provide a critical anchor for a global company’s growth.

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Mike Kim is the founder of Gradient Consulting, a consultancy that helps AI startups build customer relationships and forge partnerships with corporations in Japan and the Asia Pacific. He has over 20 years of experience across nine countries in the region and is based in Tokyo.