Governments require a vast array of goods and services to perform their duties, which makes it difficult to assess Japan’s government procurement market as a whole. Foreign suppliers are currently primarily active in the following sectors (value-based), but still hold relatively small shares:
- Medical, dental, surgical and veterinary equipment
- Scientific apparatus and equipment
- Computer and related services
- Medicinal and pharmaceutical products
The majority of foreign suppliers provide products via local distributors; only a small minority of companies headquartered outside Japan supply their products directly to Japanese public organisations. These are mostly multinational companies that have set up local subsidiaries.
Foreign companies have thus far been almost completely absent from sectors such as public works and infrastructure, owing to the complex regulatory environment.
While the public procurement market is currently dominated almost entirely by Japanese companies, only a very small percentage of Japanese companies are actually engaged in supplying goods and services to the Japanese government.
Given that most national government organisations are concentrated in (Greater) Tokyo and surrounding prefectures, 40% of government tenders are issued in the Kanto–Koshinetsu region. This is followed by the Kinki region (Osaka) and the Tokai–Hokuriku region, each accounting for 12% of all tenders.
Forty per cent of all larger tenders (excluding small-value discretionary contracts) are open competitive tenders, and 36 per cent are limited tenders (zuii-keiyaku). Together, these should offer plenty of opportunities to compete on a level playing field.
Further evidence of these opportunities is that, in many cases, only one or two bidders respond to an invitation to tender. According to analysts, many companies tend to focus on the largest government entities and are primarily active in the busiest season (February), or only in the Tokyo area. With the right approach, this could allow new entrants to secure business opportunities.
Source: NJSS public procurement information & analysis service
Challenges
Entering the Japanese public procurement market is not without its challenges, which partly explains the low percentage of foreign companies active in the sector. The general peculiarities of doing business in Japan, combined with a public procurement system that is not accustomed to dealing with foreign entities and tends to favour insiders, mean that tenacity and patience are required. As with entry into any foreign market, it is vital to understand your market and prospective customers, so it is important to invest in a local network.
Although not exclusive to the public procurement market, you can expect to face the following challenges:
Language and access to market information
Public procurement market information is almost exclusively available in Japanese; a short summary of the invitation to tender is usually the only information available in English. Detailed information on tender specifications and the tendering process is only available in Japanese. However, with the availability of AI translation tools, it is now easier to determine whether there is a business case before securing Japanese-language expertise.
Your counterparts (procurement officers) will usually not be accustomed to communicating in a foreign language, particularly when dealing with regional and local government entities.
Standards and licences
Although many Japanese standards have already been aligned with international standards, it is necessary to understand the Japanese Industrial Standards (JIS) system, as these are often used in drafting tender specifications without reference to internationally accepted equivalents.
To supply certain products and services, such as medical services or construction works, additional licences are required, and the language barrier means these can take some effort to obtain. For medical services or equipment, obtaining the necessary licences can take at least a year.
Supplier qualification and organisational diversity
Although public procurement systems and procedures in Japan share the same basic characteristics, there is substantial organisational diversity, which makes it challenging to cover an entire sector. Japan’s government institutions require suppliers to qualify before taking part in tendering, and no unified system exists. Although the application process is usually straightforward, it is necessary to ascertain the qualifying conditions for each entity.
While there is a fair degree of standardisation of procedures at the central government level, with tender invitations published on joint portal sites, the picture is much more diverse for regional and local entities. In practice, your Japanese competitors, often with local offices, will continuously monitor the public procurement announcements of individual government entities likely to procure their products or services.
Local orientation
As the public procurement sector is an almost exclusively Japanese affair, a large proportion of contracts are in practice awarded to locally based companies with an established presence as suppliers. Indeed, public procurement plays an important role in cultivating local economic activity.
In particular, for tenders at the local and regional level, which fall outside the scope of the WTO Agreement on Government Procurement, local establishment is often added as a precondition.
Procuring entities often include (after-sales) service guarantees as a condition of the tender invitation, which can in certain cases act as an obstacle for foreign-based suppliers and favour companies with local service networks.
The JTPP Helpdesk can help you address a number of these challenges by lowering barriers and giving you a better grasp of the procedures and market circumstances.
Opportunities
Although numerous challenges exist, the diversity and scale of the Japanese public procurement sector should offer plenty of opportunities. European companies, including SMEs, have already performed well in advanced scientific and medical equipment. In particular, good opportunities exist for SMEs with innovative technologies to secure contracts with government entities, provided the right approach is taken.
The key is to create your own opportunities. European SMEs that have succeeded as suppliers to government entities in Japan have made efforts to build market knowledge of their product and to pursue persistent outreach with prospective customers.
Last update: July 2026
