PwC Japan’s 2026 Geopolitical Risk Survey: Key Findings for Cross-Border Businesses

On October 16, 2026, PwC Japan Group released the results of its 2026 survey on how Japanese companies are responding to geopolitical risk, the eighth edition of a study first conducted in 2019. According to the survey, 88% of companies now consider geopolitical risk management important to their business strategy, the highest share recorded, while 31% have no specific structure in place to respond.

The survey also points to a change in how companies are adjusting their operating footprints. Nearly half of respondents (49%) plan to continue their China operations as before, while companies considering moving production or procurement elsewhere are increasingly looking at India and Southeast Asia. Below is a summary of the key findings and what they may mean for businesses operating across borders.

About the survey

The survey was conducted online in August 2026 among 400 managers at Japanese companies with annual revenue of ¥10 billion or more that operate overseas, covering manufacturing, services and other industries. The results describe the views and stated plans of large Japanese companies; they do not measure completed relocations, and the destination figures are based on a subset of 90 respondents. PwC Japan Group also surveyed companies in eight other countries and regions and plans to publish those results separately.

Record risk awareness, limited preparedness

According to the survey, 77% of companies say the geopolitical risk facing their business has risen over the past five years, with 35% describing the increase as significant, a record for the study. A further 41% rate geopolitical risk management as very important to business strategy and 47% as somewhat important.

Preparedness has not kept pace. The share of companies with no response structure stood at 31%, broadly unchanged from 29% in 2025 and 32% in 2024. Some 37% have a team that handles the issue alongside other duties, 17% have a dedicated team, and fewer than one in ten have an executive responsible for it, whether part-time (7%) or dedicated (5%).

Decision speed is a further gap. Only 23% of companies said management could make a decision within a few days of a sudden geopolitical change. A further 31% said building consensus takes time and responses often lag, and 27% said group-wide control is not effective.

Tariffs and trade policy top the list of concerns

Respondents were asked to name up to three geopolitical risks of greatest concern. The full implementation of US tariffs under the Trump administration ranked first (42%), followed by protectionist policies more broadly (29%) and US–China tensions (28%). Escalation in the Middle East, including risks to shipping lanes such as the Strait of Hormuz and the Red Sea, ranked fourth (24%), and instability in energy supply ranked fifth. PwC Japan noted strong concern that disruption to sea routes could delay procurement and raise freight costs.

Fewer companies plan large-scale moves away from China

The share of companies planning to continue their China business as before rose to 49%, from 39% in 2025 and 35% in 2024. Plans to scale back new investment (12%) or reduce the size of operations (12%) both fell sharply from the previous year. Few companies chose either extreme: 9% plan to increase investment and 8% plan to withdraw.

The share considering moving production or procurement out of China fell to 23% from 26%, while those not considering it rose to 47% from 41%. PwC Japan described this as a wait-and-see phase, in which further investment and full withdrawal both appear too risky under current uncertainty.

India and Southeast Asia gain ground as relocation destinations

Among the 90 companies considering moving production or procurement out of China, Japan remains the most cited destination, although interest in Asian alternatives has grown.

Source: PwC Japan Group, October 16, 2026. Multiple responses; base: 90 companies considering relocation.

India’s share has risen each year from 17% in 2024. It was chosen by 50% of pharmaceutical companies and 39% of semiconductor-related companies in this group.

What this means for cross-border businesses

Although the survey covers large companies, the gap it describes between awareness and preparation is also common among smaller businesses. Many founders and small companies operate with one entity, one banking relationship and a few key suppliers concentrated in a single jurisdiction, and may not know what changing any part of that setup would involve.

The findings also suggest that companies are favoring gradual diversification over all-or-nothing moves: keeping core operations in place while spreading selected functions across markets. For a smaller business, the practical equivalent is often understanding in advance what setting up or maintaining an entity elsewhere would require, rather than relocating. Points businesses may wish to review include:

• Where the company’s entity, bank accounts and key suppliers are concentrated.
• What establishing an entity in a second jurisdiction would require in documents and time.
• Which statutory filings and deadlines apply in each jurisdiction of operation.
• Who would make a decision, and how quickly, if a market or trade route changed.

Recognizing these operational gaps is only the first step; managing them across multiple jurisdictions shouldn’t require reinventing the wheel. Having structured corporate support ensures that expansion remains a strategic lever rather than an administrative bottleneck.

How BBCIncorp supports cross-border businesses

BBCIncorp helps founders and small businesses set up and run companies across borders, with support covering company incorporation, company secretary and ongoing compliance, and accounting and audit coordination, handled through online processes. The way BBCIncorp sees it, the best time to understand a company’s setup options is before a disruption makes the decision urgent.

Looking ahead

PwC Japan’s 2026 survey shows record awareness of geopolitical risk among large Japanese companies, alongside a preference for gradual diversification over large-scale exits. The forthcoming results from PwC Japan Group’s survey of eight other countries and regions may indicate whether the same pattern holds beyond Japan.

For questions about company setup or ongoing compliance across jurisdictions, the BBCIncorp team can be reached at service@bbcincorp.com.