July 27, 2020
Updated Survey on the impact of the (re-)entry ban to Japan on European businesses

Background
Since April, a (re-)entry ban into Japan has been imposed by the Japanese government on
non-Japanese nationals (including permanent and long-term residents) to contain the COVID19 pandemic. Facing a serious increase in coronavirus infections, the government declaredstate of emergency on April 7th and lifted it at the end of May without any change regarding
the entry ban for foreign nationals.
The European Economic Area (EEA) region and Switzerland also had restrictions on entering
the area. However, these restrictions focused on persons who did not have a working orresidency visa for the said region. Consequently, Japanese nationals living in Europe wereable to exit and enter the region in the same way as EEA and Switzerland nationals.
In July, the European Council officially recommended to lift travel restrictions on 15 countries
including Japan. Currently, only Germany has decided not to open its border to Japanesenationals that are not residents unless reciprocity is offered.
***Between June 30 and July 12, 2020, the European Business Council in Japan conducted asurvey for members of European National Chambers of Commerce, using a questionnairecreated by the German Chamber of Commerce and Industry in Japan.
401 European companies, with headquarters based in 16 European countries and Japan,responded.

PROFILE OF COMPANIES
Location of Headquarters
Austria
Belgium
Denmark
FinlandFranceGermany
Iceland
Ireland
Italy
Luxemburg
Netherlands
PolandSwedenSwitzerland
UK
Spain
Japan
Other

81

14380
110
2128
2

11467320
29
9020

4060

80

100120Size of Companies(without Austria : total companies : 323)

7%20%
55%
18%

1 to 100

101 to 1000>1000

no answer

Activity sectors(without Austria: total companies : 323)

1%

9%

29%
23%

38%

TradeServicesManufacturing****OtherNo answer

TO WHAT EXTENT DOES THE ENTRY BAN NOW IMPOSED ON EUROPEANS ENTERING JAPANBURDEN YOUR BUSINESS AND/OR OPERATIONS?
(All countries: 401 companies)
86% of European companies burdened by the entry ban

31%
moderately
burdened

14%

39%
heavilyburdened

16%very heavily
burdened

TO WHAT EXTENT DO THE ENTRY BANS IMPOSED ON ASIAN COUNTRIES BURDEN YOUR
BUSINESS?
(without Austria & France: total of companies: 237)

65% of European companies with headquarters in Japan burdened by the (re-)entry banRegional
HQfunctions
burdened

34%
moderatelyburdened

no effect32%

no answer

3%

20%
heavilyburdened

11%
very heavily
burdened

WHICH AREAS OF YOUR COMPANY ARE SPECIFICALLY AFFECTED BY THE (RE-)ENTRY BAN?
(Multiple answers - 401 companies)

Project development, governance and HR are mostly affected
We cannot develop new or continue withongoing projects, therefore our (potential)
turnover is endangered
We have suspended internal development
projects, necessary specialists cannot
come to Japan

26%
19%

Governance: Board Meetings/Audits
cannot take place18%

HR: inportant/essential leadership orexpert positions in the company cannot
be filled

15%
11%

Other
Manufacturing/Service and quality are
endangered7%

We cannot execute/finalize orders andtherefore face delays in payments and/orpenalties by our customers

4%
0%

5%

10%

15%

20%

25%

30%

DO YOU ANTICIPATE AN INCREASED LOSS OF REVENUE SOLELY DUE TO THE ENTRY BANFOR EUROPEANS INTO JAPAN?
(without Austria : 323 companies)

44% of European companies expect a loss of revenue

We expect a loss ofrevenue

20%
moderate loss

We cannot pursue
business
opportunities inthe way that wewould like to25%

No, the entry banitself does notincrease ourrevenue losses

27%

No answer

4%

13%
significant
loss

11%
verysignifican…

WHAT DO YOU THINK ABOUT RELIEF MEASURES, SUCH AS COMPENSATIONS, TAX RELIEF,
ETC. FOR AFFECTED EMPLOYEES AND FOR YOUR COMPANY?
(without Spain and Austria, 288 companies)¼ of European companies expect compensation from the Japanese government

We expect double cost for housing,overseas accomodation, allowances
and/or insurances
We expect appropriate actions by
the Government of Japan, such ascompensation and tax relief
We have no double cost for
housing, overseas accomodation,allowances and/or insurance

14%
25%
54%

No answer

7%
0%

10%

20%

30%

40%

50%

60%

The (re-)entry ban into Japan impacts 86% of European businesses.
In these companies, the following activities are mainly affected:• New and/or existing project developments are postponed because foreign specialists
or new expatriates cannot enter the country;• Governance, as board meetings and audits can only take place through videoconferences, which limit discussions and negotiations;• Human Resources, as important leadership or expert positions in companies cannot
be filled because these employees cannot enter the country.
Consequently, 44% of European companies in Japan expect a loss of revenue solely due tothe (re-)entry ban and 26% believe that their turnover is endangered as they are unable toexecute existing and new projects. 25% mention that they cannot pursue business
opportunities in the way they would like to, which will certainly produce consequences on
their financial results in the coming months.
The EBC believes this is very unfortunate as the EU-Japan Economic Partnership Agreement
implemented in February 2019 has produced positive results in its first ten months : EUexports to Japan increased by 6.6% compared to the same period of the previous year, while
Japanese exports to Europe grew by 6.3%. In a recent press conference at the Foreign
Correspondent Club of Japan, Mr. Michael Mroczek, president of the EBC, said the agreement
had a "very positive impact" on European businesses but was at risk of "losing themomentum" because of Japan's travel restrictions. "I'm not here to argue with the Japanese
government about the interpretation (of the law). But we are requesting an equal treatment
between Japanese citizens and non-Japanese residents and reciprocity with the EU".
The European industry in Japan creates numerous employment opportunities for both
Japanese and non-Japanese nationals, as well as an influx of capital and technology.
Therefore, the (re-)entry ban’s impact on European companies has devastatingconsequences on the Japanese economy too. Some of these capital and technologies canonly be transferred by personnel from Europe or other countries. These persons are oftenliving in Japan with a proper visa and have the right to be in Japan, in many cases for anunlimited period, as in the case of holders of permanent residency.

65% of European companies with regional headquarters based in Japan are impacted bythe (re-)entry ban. It is not uncommon for companies in Japan to manage foreign offices, forexample, in Korea or Taiwan. Under normal circumstances, CEOs would travel to suchcountries from Japan on a regular basis. This has currently come to a complete halt. These
restrictions are therefore unfortunately working as a disincentive to use Japan as a regionalhub, as international travel is practically only possible for Japanese nationals. It is not out of
the question that the Japanese government will use the current implemented measures as a
blueprint for measures in case of future pandemics.
Moreover, according to the survey, 25% of European businesses expect appropriate actions
by the Government of Japan, such as compensation and tax relief as they are facing
unexpected additional expenses caused by the (re-)entry ban that could, for some of them,jeopardize their existence and their future.
The European business community requests Japan to gradually lift the restrictions in threephases: allowing the (re-)entry of foreign residents in Japan (and reciprocating Europe) in thefirst, of foreign businesspeople without resident status in the second and, finally, of tourists
in the third phase.