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Results of the 49th Basic Survey on Overseas Business Activities (July 2019 Survey) Compiled

- FY2018 trends in business of overseas affiliates of Japanese companies -

May 27, 2020

The Ministry of Economy, Trade and Industry (METI) has been conducting a Basic Survey on Overseas Business Activities on an annual basis targeting business activities of overseas affiliates of Japanese companies (hereinafter referred to as “overseas affiliates”) and publicizing the compiled results. This survey aims to ascertain the current situation of overseas business activities of Japanese companies and the impact of such activities on partner countries and Japan. METI hereby announces that it compiled the results of the 49th survey and releases it.

1. The ratio of overseas affiliates in ASEAN 10 economies to all overseas affiliates has been increasing for eight consecutive years.

The total number of overseas affiliates as of the end of FY2018 was 26,233, of which 11,344 were in the manufacturing industry and 14,889 were in the non-manufacturing industry. Looking at the ratios of overseas affiliates to all overseas affiliates by region, such ratios in Asia, Europe and North America showed an increase. As for Asia, the ratio in ASEAN 10 economies showed an increase, while that in China showed a decrease for six consecutive years.

2. The number of employees in overseas affiliates increased.

The total number of employees in overseas affiliates as of the end of FY2018 was 6.05 million, showing an increase of 1.7% from the previous year. Looking at the number by type of industry, the number of employees in the manufacturing industry was 4.57 million, showing an increase of 0.1% from the previous year, while that in the non-manufacturing industry was 1.48 million, showing an increase of 6.7% from the previous year. Looking at the number of employees by region, such number in Asia, Europe and North America showed an increase. As for Asia, the number of employees in ASEAN 10 economies showed an increase, while the number in China showed a decrease.

3. All of total sales, ordinary profits and current net profits of overseas affiliates increased.

The total sales of overseas affiliates in FY2018 was 290.9 trillion yen, up by 1.0% from the previous year. Looking at the sales by type of industry, such industries as services and retail trade showed an increase. Looking at the sales by region, the sales in Asia and North America showed an increase, while sales in Europe decreased. The total ordinary profits of overseas affiliates were 13.7 trillion yen, up by 9.1% from the previous year, while the total current net profits of such affiliates was 10.9 trillion yen, up by 4.7% from the previous year.

4. The ratios of overseas production by overseas affiliates in the manufacturing industry remained the same as those in the previous year when the ratios marked a record-high level.

The ratio of overseas production by overseas affiliates to total production by all domestic companies in the manufacturing industry in FY2018 was 25.1%, down by 0.3 % from the previous year, remaining approximately the same as those in the previous year when the ratios marked a record-high level. Looking at the ratios by type of industry, a decrease was seen in some industries, including information and communication electronics equipment and production machinery although these two industries marked ratios of 27.8% and 14.7% respectively.

5. The total expenses for research and development by overseas affiliates in the manufacturing industry decreased, while the total amount of capital investment by such affiliates increased.

The total expenses for research and development spent by overseas affiliates in the manufacturing industry in FY2018 was 695.1 billion yen, down by 3.8% from the previous year. The total amount of capital investment by such affiliates in the manufacturing industry was 4.4 trillion yen, up by 10.7% from the previous year.

Outline of the survey

(1) Purpose

The survey aims to uncover the current situation of overseas business activities of Japanese companies, thereby obtaining basic data to contribute to the planning, preparation and implementation of a variety of measures.

(2) Targets of the survey

The survey targeted Japanese companies having overseas affiliates (hereinafter referred to as the “headquarters”) as of the end of March 2019, excluding those in the finance, insurance, and real estate industries. The term “overseas affiliates” in the survey is a collective term referring to: overseas affiliates, which are overseas corporations in which a Japanese company has been investing at a ratio of over 10%; and second-tier affiliates, which are overseas corporations in which an overseas affiliate with a Japanese capital contribution at a ratio of over 50% has been investing at a ratio of over 50%.

(3) How to conduct the survey

METI conducts written surveys, in which it distributes two types of questionnaire sheets (those for the headquarters and those for overseas affiliates) to the headquarters and the headquarters sends the completed sheets back to METI.

(4) Timing of achievements uncovered in the survey

METI conducted the survey on July 1, 2019, targeting responding companies’ achievements [i] as of the end of March 2019 or the timing before this month and closest to the closing date of financial accounts in FY2018 and [ii] at the end of FY2018.

(5) Data on collection of questionnaire sheets

Collection ratio: 73.4%
Number of target companies operating business: Headquarters: 7,344, overseas affiliates: 26,233

(6) Note to data users

METI adopted the Japanese yen, in principle, as the currency unit in aggregating data on the related items of the survey targeting overseas affiliates, and converted the yen from local currencies using the average exchange rate (period average) under the International Financial Statistics (IFS) released by the International Monetary Fund (IMF). Please note that changes in yen value to local currencies are seen depending on the survey years if the rates of the Japanese yen to the local currency in the country where a target overseas affiliate operates business are compared between the target year and the previous year. For example, as for the Japanese yen rate against the US dollar, the exchange rate was 110.42 yen/dollar in the 2019 survey, showing an appreciation of the yen by 1.6% from the previous year, while as for the Japanese yen rate against the Euro, the exchange rate was 129.91 yen/Euro in the 2019 survey, showing a depreciation of the yen by 3.1% from the previous year.

Links to related information

Division in Charge

Enterprise Statistics Office, Research and Statistics Department, Minister’s Secretariat