JETRO Invest Japan Report 2025

JETRO has compiled a comprehensive report on foreign direct investment (FDI) in Japan, "JETRO Invest Japan Report 2025," 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.

In 2024, FDI flows to Japan totaled 2.5 trillion yen, the growth rate has slowed down from the previous year, yet maintaining a net inflow. As of the end of the year, Japan's FDI stock was 53.3 trillion yen, up 4.5% from the previous year, marking a new record high.

Greenfield investment in Japan reached a record high of 31.6 billion US dollars, up 15.4% year-on-year. Large-scale projects related to the construction of data centers and logistics facilities were prominent, reflecting growing demand for AI-related businesses and automation and labor saving measures in logistics.

The number of cross-border M&A deals in Japan, which had declined in 2023, recovered to a level close to the record high in 2022. As in 2023, the deals, mainly led by Europe and U.S. funds, had a noticeable tendency to aim at optimizing management resources and improving profitability.

Looking at FDI flows in Japan in 2024 by country and region, U.S. investment implementation totaled 21.6 trillion yen and withdrawals amounted to 23.1 trillion yen—both are the highest values since the current statistical standards were introduced in 2014. Consequently, the net figure showed a substantial withdrawal (minus 1.6 trillion yen), which was the primary factor behind the overall year-on-year decline in Japan's inward FDI flows for 2024.

The top three countries in terms of Japan's inward FDI stock remained unchanged from 2023: the U.S., the U.K., and Singapore. However, due to a significant withdrawal by the largest investor, the U.S. (10.6 trillion yen, 20.0% share), the gap with second-ranked U.K. (9.1 trillion yen, 17.0% share) narrowed, increasing the U.K.'s relative presence. Regionally, Asia surpassed North America for the first time in two years.

In the "Program for Promotion of Foreign Direct Investment in Japan 2025" and "Basic Policy on Economic and Fiscal Management and Reform 2025" announced in June 2025, the Government of Japan raised the target for the FDI stock in Japan in 2030 from 100 trillion to 120 trillion yen, and indicated its policy to aim for 150 trillion yen as early as possible in the early 2030s. In these documents, as part of its growth strategy, the government intends to commit to pursuing the expansion of FDI in Japan more vigorously than before.

From a national security perspective, to prevent the outflow of technology, information, and other assets overseas, the government amended in April 2025 the Cabinet Order on Inward Direct Investment, etc., a Cabinet Order including provisions on the inward direct investment screening system pursuant to the Foreign Exchange and Foreign Trade Act, adding new sectors requiring prior notification with screening. Screening is tightened with a focus on organizations or individuals obligated to cooperate with foreign governments or other equivalent entities in information-gathering activities in Japan, as well as organizations with particularly high relevance to critical infrastructures.