This research aims to 1) analyse the key roles and activities performed by foreign MNC subsidiaries in Japan, and 2) investigate the key factors leading to the creation of centres of excellence among those subsidiaries.We surveyed 134 MNC foreign subsidiaries in Japan and identified three key areas for the formation of centres of excellence in Japan. The first is the continuous expansion of R&D activities; the second is the integration of R&D processes and functions within the rest of the MNC; the third is subsidiary linkage with external suppliers. Whilst we have many in-depth studies of multinational MNC activities in markets outside of Japan, fewer investigate foreign MNC activities in Japan. Our study has practical implications for senior management of multinational MNCs who intend to start up or expand operations in the Japanese market.In summary, centres of excellence in Japan need to have all-round balanced capabilities with strong competence in the R&D area.