JETRO Invest Japan Report 2024

Key points of the 2024 Report

JETRO has compiled a comprehensive report on foreign direct investment (FDI) in Japan, JETRO Invest Japan Report 2024 with the aim of providing information for foreign and foreign-affiliated companies considering doing business in Japan, as well as reference material to assist foreign companies in their investment in Japan. The key points of the report are as follows.

1. FDI stock in Japan exceeded 50 trillion yen.

  • The stock of inward FDI in Japan at the end of 2023 increased by 9.3% to 50.5 trillion yen (350.6 billion US dollars), equivalent to about 8.5% of Japan’s GDP.
  • By region, investments from the United States (up 23.2% from the previous year) and Taiwan (up 21.1%) increased notably, due to large-scale investment projects in Japan. Examples include the construction of a second plant in Kumamoto Prefecture by Taiwan Semiconductor Manufacturing Company (TSMC), a major Taiwanese semiconductor manufacturer, and the introduction of the latest technology into its plant in Hiroshima by Micron Technology, Inc, a major US semiconductor company.

2. Japan's greenfield investment receipts more than tripled from the previous year.

  • Greenfield investments increased globally by 5.4% to 1,380.4 billion US dollars. They declined in developed countries and regions, while those in emerging regions were solid, especially in Asia. Japan saw a remarkable increase, more than tripling from the previous year. It ranked 17th in the world, at 30.8 billion US dollars.
  • In addition to the aforementioned large-scale semiconductor projects, greenfield projects in Japan included some investments by Singaporean and US companies related to the construction of data centers.
  • Among the major inbound M&A deals, value of transactions were large in the logistics, healthcare and real estate sectors. There were cases of companies executing management buyouts (MBOs), with the support of foreign investment funds, to turn around their operations.

3. The Japanese government has set a target of 100 trillion yen in FDI stock by 2030 and set out priority programs and tax reforms.

  • The Council for Promotion of Foreign Direct Investment in Japan discussed in May priority issues to be addressed in the future and how to respond to them, and developed the Priority Program for Attracting Foreign Direct Investment. The program includes 10 policy measures based on 4 pillars: (1) expanding investment opportunities in Japan, (2) securing highly skilled human resources in Asia and other regions, (3) promoting collaboration between domestic and foreign companies, and (4) improving business and living environments.
  • As part of the fiscal 2024 tax reforms, the government decided to establish (1) a tax system to promote domestic production in strategic sectors and (2) a tax system for innovation centers (innovation box tax system) to promote domestic investment. For (1), electric vehicles, semiconductors, etc. are designated as strategic sectors, and tax credits are provided according to production and sales volumes. For (2), a 30% income deduction is provided for income derived from intellectual property rights originating in Japan.
  • Building on these and other measures, the Japanese government has set a target of 100 trillion yen in FDI stock by 2030.
  1. Note:

    This report is based on information as of September 2024

JETRO Invest Japan Report 2024

Key points of the 2024 Report

Chapter1. Global Trends in Inward FDI

  1. Section1.

    Global Inward FDI Flow in 2023

  2. Section2.

    Global Greenfield Investment in 2023

  3. Section3.

    Impact of Structural Changes in Global Value Chains (GVCs)

Chapter2. Trends in Inward FDI to Japan

  1. Section1.

    Trends in Inward FDI to Japan

  2. Section2.

    Trends in Inward FDI to Japan by Country/Region

  3. Section3.

    Trends in Inward FDI to Japan by Industry

  4. Section4.

    Trends in Greenfield Investment in Japan

  5. [Column]

    Saga Prefecture's "Karatsu Cosmetics Initiative" Utilizing Overseas Perspectives

  6. [Column]

    Private-Sector Capital Investment Exceeds 100 Trillion Yen, Aiming for 115 Trillion Yen in fiscal 2027

  7. Section5.

    Trends in Inbound M&A in Japan

  8. [Column]

    Diversification of buyers and methods over M&A transactions in Japan

  9. Section6.

    Assessment of Business Environment in Japan by Global Companies

  10. [Column]

    Japan as a highly regarded R&D center

Chapter3. Recent Government Measures

  1. Section1.

    Basic Policy on Economic and Fiscal Management and Reform 2024

  2. Section2.

    Priority Program for Attracting Foreign Direct Investment

  3. Section3.

    National Strategic Special Zones "Special Zones for Financial and Asset Management Businesses"

  4. Section4.

    Partial Revision of the Industrial Competitiveness Enhancement Act

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Laws and Regulations on Setting Up Business in Japan Pamphlet

The pamphlet "Laws & Regulations" is available in PDF, and outlines basic information about laws, regulations and procedures related to setting up a business in Japan. It is available in 8 languages (Japanese, English, German, French, Chinese (Simplified), Chinese (Traditional), Korean and Vietnamese).
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