JETRO Invest Japan Report 2019 (Summary) 1. Recent Trend of Inward FDI in Japan

Inflow of more than 2 trillion yen for the second consecutive year, the second highest after 2016

  • The inflow of 2018 inward FDI (balance of payments basis, net) is 2.9 trillion yen and the second largest only after 2016, among comparable years since 1996.
  • By region, the net inflow from Europe is 804.9 billion yen (30.4% increase from 2017), 668.1 billion yen from North America (4.0% decrease) and 552.2 billion yen from Asia (11.9% decrease)

Changes in the flow (net) of inward FDI into Japan by country/region(Billion Yen)

Changes in the flow (net) of inward FDI into Japan by country/region
Country/region 2016 2017 2018 2019
Jan-Aug (P)
Asia 950 627 552 485
Subcatergory 1China -11 110 89 99
Subcatergory 1Hong Kong 161 -38 86 131
Subcatergory 1Taiwan 259 95 44 50
Subcatergory 1Korea 67 127 216 52
Subcatergory 1ASEAN 475 331 117 154
Subcatergory 2Singapore 404 359 -33 80
Subcatergory 2Thailand 71 -50 132 50
North America 751 696 668 631
Subcatergory 1US 748 702 662 580
Latin America 171 313 478 355
Oceania 87 27 210 104
Europe 2,508 617 805 1,328
Subcatergory 1EU 2,411 457 737 1,268
World 4,492 2,296 2,859 2,981

Major inward M&A deals in Japan since 2018(-: no data is available)

Major inward M&A deals in Japan since 2018
Target Company Target Company:
Acquirer Acquirer:
Jun. 2018 Toshiba Memory Electronics Bain Capital(US), SK Hynix(Korea), and others - Investors Group 2,000
Apr. 2018 Takata Transportation Equipment Joyson Electronics China Transportation Equipment 175
Mar. 2018 ASATSU-DK Advertising Agency Bain Capital US Investment Firm 152
Apr. 2019 Ci:z Holdings Cosmetics Johnson&Johnson US Healthcare 150
Mar. 2019 Clarion Electronics Faurecia France Transportation Equipment 141
Jun. 2019 Godiva(Asia Pacific) Food MBK Partners Korea Investment Firm 111
Jan. 2019 6 logistics facilities owned by ESR Real Estate Axa IM (France), and others - Investors Group 109
Mar. 2019 Pioneer(1) Electronics Baring Private Equity Asia Hong Kong Investment Firm 102

Inward FDI stock reaching 30-trillion-yen mark for the first time

  • Inward FDI stock at the end of 2018 was 30.7 trillion yen. It marked a record high for five consecutive years and exceeded 30 trillion yen for the first time.
  • By region, nearly a half of the stock, 49.5%, comes from Europe.
  • By country, the stock of the US was 6.5 trillion yen and remained as the largest investor.

Inward FDI stock and its proportion to nominal GDP

The graph shows the stock of inward FDI in Japan and its proportion to nominal GDP from 2000 to 2018 as well as the estimates of the stock in the first and second quarter of 2019. The stock of inward FDI in Japan increased to 30.7 trillion yen in 2018 from 6.1 trillion yen back in 2000 and marked a record high for five consecutive years. Its proportion to nominal GDP in 2018 is 5.6%. The estimate of the stock in the second quarter is 33.0 trillion yen.

Share of inward FDI stock in Japan by region
(as of end of 2018)

This is a pie chart that shows the stock of inward FDI in Japan by region, as of the end of 2018. The proportion of Europe was 49.5%, that of North America was 21.8%, that of Asia was 19.2%, and the other was 9.5%.

Inward FDI stock in Japan by country/region and by industry (as of end of 2018) Top 10 (By country/region)

Inward FDI stock in Japan by country/region and by industry (as of end of 2018) Top 10 (By country/region)
Rank Country Stock
(Billion yen)
1 US 6,529 21.3
2 Netherlands 4,625 15.1
3 France 3,761 12.2
4 Singapore 2,638 8.6
5 UK 2,606 8.5
6 Cayman Isl. 1,673 5.4
7 Switzerland 1,458 4.7
8 Germany 1,094 3.6
9 HongKong 1,012 3.3
10 Luxembourg 837 2.7

Finding business opportunities in addressing social issues unique to local regions and Japan through innovation

  • Cases have been observed where foreign-affiliated companies find opportunities for research and development (R&D) or pilot projects of new technologies/services in unique social issues and characteristics and where they collaborate with local companies/organizations.

Regional social issues × Efforts of foreign-affiliated companies

Regional social issues × Efforts of foreign-affiliated companies
Place Social issues Foreign-affiliated companies Characteristics Efforts/business development
Aizu-wakamatsu City,
Fukushima Pref.
  • Reconstruction from earthquake
  • Depopulation
SAP Japan,
Japan Microsoft, etc.
Environment suitable for social business pilot projects
(Combination of urban and depopulated areas)
(Open data of its citizens)
  • In the process of reconstruction from a massive earthquake, the Smart City initiative started. In April 2019, Smart City AiCT, an office facility complex, was established.
  • More than 30 pilot projects have been carried out so far, and among them, about 20 of which have become official services.
Sendai City,
Miyagi Pref.
  • Declining birth rate and aging population
  • Shortage of healthcare professionals
  • Soaring medical expenses
Philips Japan,
Research and development in the field of healthcare
  • Philips Japan established Co-Creation Center as the first R&D center in Japan. Its aim is to collaborate with those from different industries. The company has already concluded more than 60 partnership agreements in the field of healthtech with enterprises/organizations .

Social issues in Japan × Efforts of foreign-affiliated startups

Social issues in Japan × Efforts of foreign-affiliated startups
Business overview Social issues Cooperation partners Efforts/business
development in Japan
Standard Cognition Providing a payment software system, with which retail stores no longer need cash registers Manpower shortage PALTAC Planning to start pilot projects to install the software at drugstores in Miyagi Prefecture
One Concern Development of damage prediction system for natural disaster utilizing AI Disaster prevention/disaster mitigation Sompo Japan Nipponkoa Weathernews Starting pilot projects of disaster prevention/disaster mitigation system utilizing AI in Kumamoto City. Planning to start trial operation of the damage prediction system of damages for floods and earthquakes from September 2019.
StreetScooter Manufacturing of electric vehicle (EV) Work-style reform
Manpower shortage
Reduction of burdens on environment
Yamato Transport Jointly developed of first Japanese small EV truck for parcel delivery. Yamato Transport announced it would introduce 500 units of them during FY2019.
Wind Mobility Providing service of shared electric scooters Last one-mile between public transportation and a destination Saitama Railway Corporation Providing an electric scooter sharing service in Saitama City and Kawaguchi City.

Diversification of the ways foreign-affiliated companies form ecosystems

  • Some of foreign-affiliated companies forming startup ecosystems in Japan hold programs for startups making the best use of characteristics of individual regions as well as investment through establishing corporate venture capital (CVC).

Foreign-affiliated accelerators in Japan(-: no data is available)

Foreign-affiliated accelerators in Japan
Foreign-affiliated company Market to expand Advantages of market Characteristics of program
Osaka City,
Osaka Pref.
Market size
Low cost
(compared with Tokyo)
Holding "Startupbootcamp," a startup support program, in 21 cities around the world. The program sets up a specific industrial cluster for each host city and invites promising startups in the field from all over the world. The theme in Osaka is "Smart City & Living."
Plug and Play Kyoto City,
Kyoto Pref.
Startup environment with local universities at its core Since entering Japan in 2017, assisted both domestic and overseas startups. Their program in Kyoto is to specialized in "Hard Tech/Healthcare."
ImpacTech Tokyo - Providing support exclusively to startups tackling social issues using technologies. Supported projects include wireless electric car/robot charging service, online medical consulting service for parents with children, etc.

Foreign-affiliated open innovation program/CVC by traditional companies

Foreign-affiliated open innovation program/CVC by traditional companies
Open innovation program/CVC Investing foreign-affiliated companies Efforts/investment
G4A Tokyo Dealmaker
CoLaborator Kobe
Bayer Yakuhin
  • Held the G4A Tokyo Dealmaker 2018 in November 2018 and led to collaboration with 12 companies in fields, such as productivity enhancement in pharmaceutical manufacturing.
  • In 2018 announced to cooperate with Kobe City, etc. in inviting companies to CoLaborator Kobe, its incubation facility established in the City, and in supporting their overseas business expansion.
Philips HealthWorks Philips
  • Providing mentoring by its employees and opportunities for experiments for three months at its innovation centers located in various parts of the world, such as the Netherlands and India to participating companies in Philips HealthWorks, its global-scale acceleration program.
Samsung Venture Investment Corporation Samsung Group
  • In June 2018, invested in a startup engaging in system development of electronic equipment such as night vision cameras originated from the National Institute of Advanced Industrial Science and Technology in Tsukuba City.
Cisco Innovation Hub Cisco Systems
  • Established Cisco Innovation Hub in Tokyo as the facility for working on open innovation with startups in the space industry.
  • Together with JAXA, etc., inviting startups and universities/research institutes and holds competitions of new business models utilizing satellite data, aiming to develop new products and services in the industry.
Google for Startups Campus Alphabet
  • Announced the establishment of Google for Startups Campus in Tokyo in 2019 as the second startup supporting base in Asia, following its location in Seoul, South Korea.
Japan Trailblazer Fund
  • Fund of 100 million dollars designated to support Japanese startups.
  • Providing startups with a variety of assistances, such as sales channel development and overseas business expansion, in the hope to realize positive effects on its own cloud service business at the end.

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