Japanese Companies' Overseas Expansion Rate Rises Overall, but a Gap of Over 43% Emerges by Sales Scale; Expansion Destinations Diversify Beyond ASEAN to Include the U.S. and India — Results of the '2026 Overseas Business Survey' Released

TANABE Consulting Co., Ltd., a pioneer in Japanese management consulting (Headquarters: Chiyoda-ku, Tokyo; Yodogawa-ku, Osaka; President and CEO: Takahiko Wakamatsu), announces the results of its '2026 Overseas Business Survey' conducted among corporate executives, directors, and management staff nationwide.

1. Survey Summary

(1) The overseas expansion rate among Japanese companies has increased across all sales scales. However, a gap exceeding 43% has emerged between companies with annual sales of 300 billion yen or more (82.1%) and those with less than 50 billion yen (38.7%). This disparity by sales scale is expected to increasingly manifest as a 'polarization' in Japanese companies' overseas expansion.

(2) Regarding selection of overseas expansion regions, ASEAN maintained its previous level, while companies considering expansion into the United States (29.7% → 38.9%) and India (29.7% → 36.8%) both increased by over 7 percentage points. This indicates that diversification of expansion destinations is now fully underway, moving beyond ASEAN's previous dominance.

(3) Over 70% of companies with local subsidiaries reported concerns about their management and governance structures. The top challenge cited was 'shortage of local management and executive talent, and concerns about talent development' (61.0%), highlighting the need for improved management systems and global talent cultivation.

2. Detailed Data Analysis

(1) Approximately 80% of companies are either currently engaged in or planning overseas operations.

The proportion of companies with a positive attitude toward overseas expansion reached about 80%, a sharp increase of +16% compared to the previous year. This significant shift in mindset within a single year is attributed to several structural and environmental factors. As demographic aging shrinks the domestic market, many executives now clearly perceive the 'risk of maintaining the status quo.' At the same time, historically low yen levels are increasing the yen-converted value of overseas earnings, strengthening the financial incentive for overseas expansion. Additionally, the momentum for supply chain restructuring, triggered by U.S. tariff policies, has shifted discussions from 'expanding overseas someday' to 'immediate consideration.' Overseas expansion is transitioning from a frontier strategy for select large corporations to a common management challenge for a broad range of companies.

(2) While the overseas expansion rate among Japanese companies has increased across all sales scales, disparities by sales size have widened beyond 43%, indicating deepening 'polarization.'

The overseas expansion rate has risen year-on-year across all company sizes, reflecting an overall improvement. However, analysis of companies that answered 'engaged in overseas operations' reveals a gap exceeding 43% between those with annual sales of 300 billion yen or more (82.1%) and those with less than 50 billion yen (38.7%). About 60% of companies with sales under 50 billion yen still neither conduct nor consider overseas operations, as the triple constraints of know-how, talent, and funding continue to act as 'structural barriers.' As overall enthusiasm for overseas expansion grows, the disparity between sales scales is expected to become increasingly pronounced, manifesting as 'polarization' in Japanese companies' overseas activities.

(3) While 'increased revenue and profit' remains the most common outlook for overseas operations, 'increased revenue but decreased profit' has surged approximately sixfold.

The outlook for overseas operations shows 'increased revenue and profit' rising to 43.5% (from 39.7% the previous year), while 'stable' outlooks declined to 23.2% (from 34.2%). At first glance, performance outlooks appear to be improving. However, 'increased revenue but decreased profit' surged from 1.4% to 8.7%—approximately six times the previous level. This result clearly indicates that more companies are experiencing rising sales without corresponding profit growth. Factors include the inability to pass on rising local labor and logistics costs to selling prices, as well as changes in yen-denominated cost structures, particularly among companies with local subsidiaries. The ability to simultaneously achieve 'sales growth' and 'profit sustainability' is emerging as a key evaluation criterion for future overseas operations.

(4) 'Changes in supply chain structure' is the most frequently cited 'opportunity' for companies' overseas operations.

The most recognized 'opportunity' for overseas operations was 'changes in supply chain structure' (29.0%). Geopolitical tensions and the trend of 'de-risking from China' are perceived not only as 'threats' but also as creating new opportunities for Japanese companies—such as new orders and expansion of operational bases—through supply chain reconfiguration. At the same time, 24.6% responded 'none in particular,' indicating that a significant number of companies lack the perspective to interpret external changes as opportunities. As environmental shifts bring both risks and opportunities, strategic thinking must deepen among this group, especially in a context where 'doing nothing' poses the greatest risk.

(5) The proportion of companies with 'less than 10%' overseas sales decreased by 13.9% from the previous year, while the '31–50%' segment expanded more than threefold.

The share of companies with 'less than 10%' overseas sales dropped from 60.3% to 46.4%—a 13.9% decline within a year—highlighting a structural shift in Japanese companies' reliance on overseas revenue. Notably, the '31–50%' segment expanded more than threefold, from 4.1% to 13.0%, revealing a growing group of companies for which overseas operations are transitioning from 'supplementary' to 'quasi-core.' However, approximately 70% of all companies still maintain overseas sales ratios below 30%. Considering the aforementioned rise in companies experiencing 'increased revenue but decreased profit,' it is likely that a significant number of companies are failing to keep pace with advanced revenue management as their overseas sales ratios increase. The quality of management decisions in shifting overseas expansion from 'quantity' to 'quality' is now reaching a critical juncture that will significantly impact corporate value in the coming years.

(6) While ASEAN remains the primary destination for overseas expansion, interest in expansion into the U.S. and India is increasing.

In selecting overseas expansion regions, ASEAN maintained its previous level at 65.3%, while interest in the United States (29.7% → 38.9%) and India (29.7% → 36.8%) both rose by approximately 7–9 percentage points. This suggests a shift from ASEAN's previous role as the sole 'buffer' for China-related risks, with diversification of expansion destinations now fully underway. The rising interest in the U.S. is driven not only by the impact of Trump-era tariffs and rising export costs but also by increasing demand for 'local production for local consumption,' accelerating U.S. market entry. India's appeal stems not only from its status as a growth market of approximately 1.4 billion people but also from surging demand for manufacturing bases as a buffer in U.S.-China tensions.

(7) Companies expressing interest in cross-border M&A nearly doubled, though 'not considering' remains the majority.

Regarding cross-border M&A, the proportion of companies stating 'intend to implement' nearly doubled (13.0% → 25.6%), while those 'not considering' decreased by 16% (81.7% → 64.8%), indicating a significant shift. Compared to greenfield investments (establishing own facilities), M&A offers the advantages of 'speed and certainty' by immediately acquiring local customer bases, talent, and licenses. This shift is likely driven by companies gaining experience through partnerships with local entities and recognizing their limitations.