JETRO Invest Japan Report 2022
Chapter3. Recent Government Policies
[Column] Improving Foreign Investors- and Businesses-friendly Living Environment

Government’s Initiatives
April 2014 The government established the Council for Promotion of FDI in Japan to promote FDI in Japan. It assumed a role of a command post in identifying and attracting investment projects, collecting opinions directly from foreign company executives, etc., and contributing to the efforts of relevant ministers and related councils to achieve necessary institutional reforms, etc.
May 2016 The Council compiled the "Policy Package for Promoting Foreign Direct Investment into Japan to Make Japan a Global Hub." It established the "Working Group for Revising Regulations and Administrative Procedures" to examine the simplification of regulations and administrative procedures that may hinder foreign companies from investing in Japan and coordinating with relevant government ministries and agencies (final report released in April 2017).

Medical System

  1. May. 2016

    The policy package sets a goal that the number of medical institutions with capabilities to accept foreign patients is to expand to around 40 locations nationwide by March 2017.

  2. Promoting the capacity development for accepting foreign patients by supporting the placement of medical interpreters and furthering the use of telephone medical interpreters, etc., mainly at core medical institutions selected by prefectures. (As of September 2021, multilingual medical care covers 95.8% of the medical areas in Japan) (Note)

  3. June 2021

    Under the Strategy for Promoting FDI in Japan, the government will work to develop a foreigner-friendly healthcare system, specifying the target of having at least 1,000 hospitals providing care in multiple languages by March 2026.

  1. (Note)

    Based on secondary medical areas. Of the 335 medical areas, 321 medical areas are covered.Source: Ministry of Health, Labour and Welfare's "Fiscal 2021 Survey on the Acceptance of Foreign Patients at Medical Institutions".

Children's Education

  1. May 2016

    The policy package specifies the promotion of educational support for foreign schoolchildren.

  2. Supporting local governments working to develop systems to promote the acceptance of returning and foreign children at schools and enhance Japanese language support. Promoting initiatives by setting organizing and implementing "special curricula" for schoolchildren who need Japanese language support as a mandatory requirement.
    (Of the total foreign schoolchildren requiring Japanese language support, the percentage of those receiving it based on special arrangements at school increased from 76.9% (2016) to 90.9% (2021)) (Source)

  3. June 2021

    The Strategy for Promoting FDI in Japan has established a goal for improving the educational environment for foreign school children, ensuring that all those who students who need it can receive Japanese language instruction by March 2023.

  1. Source:

    Ministry of Education, Culture, Sports, Science and Technology, "Survey on Acceptance of Children in Need of Japanese Language Instruction (FY2021)."

Status of residence

  1. April 2017

    Based on the discussions of the Working Group, "Japanese Green Card for Highly-Skilled Foreign Professionals" system was established to significantly shorten the period of stay required to apply permanent residency for highly-skilled foreign professionals. In addition, requirements for the highly skilled professionals' point-based system were reviewed (the addition of evaluation items, etc.).

  2. December 2018

    Foreign entrepreneurs who receive approval from a local government whose "Management Support Plan for Foreign Entrepreneurial Activities" was accredited by the government can stay to prepare for starting a business for up to one year. 14 local governments have been accredited (Note).

  3. July 2021

    As part of the initiatives to achieve “Japan as a Global Financial Center (Finance Place Japan)" described below, a person completing registration as an investment management business while staying in Japan as a "temporary visitor" can change the status of residence straight to "highly skilled professional" or "business manager," etc. Expansion of preferential treatment in the highly skilled professionals' point-based system for financial professionals and relaxation of requirements for employing domestic workers, etc. were introduced.

  1. (Note)

    As of July 2022. Also, “Programs to Promote the Acceptance of Foreign Entrepreneurs” for National Strategic Special Zones has been in place since July 2015, allowing foreign entrepreneurs six months of residence for startup activity. 10 local governments have adopted it.

Multilingualization

  1. March 2015

    Promote multilingualization of retail stores, food service, roads, and public transportation based on the "Five Commitments to Attracting Foreign Companies to Japan" in March 2015 .

  2. May 2016

    The Policy Package set a target of publishing translations of more than 500 laws and regulations in foreign languages by March 2021.

  3. ~March 2021

    Foreign-language translations of 503 laws and regulations (Note) (including revisions) were published. The cumulative number of translated laws and regulations approaches 800.

  4. June 2021

    The Strategy for Promoting FDI in Japan set a target of publishing at least 600 new English translations of laws and regulations by March 2026. Effort will be made for another 400 translations (making a total of 1,000 pieces), depending on the advancement in translation technology, etc.
    (*) The "Public-Private Strategy Council for Promoting the International Dissemination of Japanese Laws and Regulations" held in January 2021 has set the field related to foreigners living in Japan as one of the priority areas.

  1. (Note)

    As of March 5, 2021

Tax System

"Comprehensive Economic Measures to Secure People's Lives and Livelihoods towards Relief and Hope" was decided by the Cabinet in December 2020, incorporated “the International Financial Center Initiatives (Finance Place Japan)”.

International Financial Center Initiatives
April 2021 Regarding inheritance tax, if the foreign national had lived in Japan for more than 10 years, the worldwide assets were subject to taxation. After the reform, for foreign nationals residing in Japan with a valid working visa, the foreign assets were no longer subject to inheritance tax regardless of the period of residence.
April 2021 Taxation of carried interest, the distribution allocated return in excess of the capital contribution ratio, is clarified. It is not subject to comprehensive taxation (progressive tax rate, up to 55%) but is taxed as “capital gain of the shares”(uniformly 20%) in cases where there is economic rationality in the distribution of profits.
November 2021 Unlisted companies were not allowed to treat performance-based compensation for directors as tax-deductible expenses. After the reform, unlisted non-family companies and alike, whose primary business is investment management, can now include it in tax-deductible expenses with a number of conditions, including where the calculation methods are described in its business reports filed under the Financial Instruments and Exchange Act and disclosed publicly through the JFSA website.

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