WHY JAPAN? 5 Reasons to Invest in JAPAN Reason1. An Ever-growing Economy

Japan's investment environment is improving due to government efforts. The Japanese economy is growing.

Japanese economy steadily recovering from deflation

GDP is steadily headed toward 600 trillion yen

Before Abenomics FY2011, FY2012 After Abenomics from FY2013 to FY2020 FY2011-494, FY 2012-494, FY 2013-507, FY 2014-518, FY 2015-534, FY 2016-534, FY 2017549, FY2018 (Estimation)-564, FY 2020 (Target)-600

Source: “ABENOMICS”, JAPAN GOV, September 2018
Original data: “Fiscal 2018 Economic Outlook and Basic Stance for Economic and Fiscal Management", Cabinet Office

Japan with stronger earning power

Corporate ordinary income (all industries)

FY2011 36.4 trillion yen, FY2012 39.7 trillion yen, FY2013 56.5 trillion yen, FY2014 60.3 trillion yen, FY2015 60.6 trillion yen, FY2016 67.8 trillion yen, From FY2011 to FY2016 30 trillion yen increase

Source: “ABENOMICS”, JAPAN GOV, September 2018
Original data: "Financial Statements Statistics of Corporations by Industry, Quarterly," Policy Research Institute, Ministry of Finance of Japan

Highly profitable market

Comparison of investment returns from inward FDI(2014), Ireland, Czech Republic, Japan-All industries 10%, Service industry(excluding financial and insurance industries) 17.8%, Poland, Hungary, Estonia, Austria, Sweden, Chile, Denmark, UK, US

Source: “FDI in Figures”, OECD, April 2016
Original date: OECD International Direct Investment statistics database

Effective corporate tax rate declining

Effective corporate tax rate reduced to 20% level

Japan: FY2014-34.62%, FY2015-32.11%, FY2016-29.97%, FY2018-29.74%. Others: France 33.33%, Germany 29.83%, US (California) 27.98%.

Source: Created by JETRO from "Materials on Corporate Taxation”, "Ministry of Finance”
Note: Tax rates as of January 2018

Corporate governance enhanced

"Japanese Stewardship Code" introduced and revised
Accepted by 233 institutional investors as of August 2018
Source: Financial Services Agency
"Corporate Governance Code" introduced
Applied to 2,540 companies as of July 2017
Source: “Corporate Governance” Japan Exchange Group, Inc.

Deregulation/structural reform

Progress in reform of bedrock regulations is attracting new investment into Japan.
Reform of fundamental regulations in the sectors of agriculture, medical care and energy is bringing new entries into the Japanese market.
Healthcare system
Speedy and efficient approval review of advanced medical products
(regenerative medicine, medical devices)
Promoting practical use of regenerative medicine for medical care
Energy market
Implementing a drastic reform of electric power and gas system for the first time in 60 years
  • Full liberalization of retail market of electricity (April 2016)
  • Full liberalization of retail market of gas (April 2017)

Source: Created from "Abenomics is progressing!, April 2016," Cabinet Office

Establishment of the regulatory sandbox system

Regulatory reform by project
"Japanese Stewardship Code" introduced and revised
  • Verifying a possibility for practical use by utilizing innovative technologies, etc. and leveraging data gained through demonstration experiments for the regulatory system reform
  • Enabling companies to conduct demonstration experiments of new technologies or business models in specific areas for a certain period
  • No limitation on business types. Taking 2 months at the earliest until the announcement of a certification result.
(The system was approved by the Cabinet in June 2017 and launched in June 2018)

Reference: GOJ’s Regulatory Sandbox Team within the Japan Economic Revitalization Bureau of the Cabinet Secretariat

The government is making greater efforts to attract companies and visitors from overseas, while creating a more open market and facilitating business expansion.

Promotion of inward FDI

Government target: Increase inward FDI stock in Japan to 35 trillion yen by 2020.

Inward FDI stock in Japan. 2017-28.6 Trillion yen record high Nominaal GDP 5.2. 2020-Target 35.0 Trillion yen.

Source: Created by JETRO from "Balance of Payments," Ministry of Finance”

Five Promises for Attracting Foreign Businesses to Japan (March 2015)

Improving business and living environment for foreign companies and expats
  1. Removing language barriers (Display of information in foreign languages at shops and public spaces)
  2. Improvement of Internet access (Installment of free public wireless LAN [Wi-Fi])
  3. Acceptance of business jets at local airports
  4. Enhancement of educational environment for expatriate children (international schools))
  5. Strengthening consultation services to support foreign businesses (Investment Advisor Assignment System)

Government actively promoting inward FDI

Designation of the National Strategic Special Zones
To promote a wide range of international business and leading-edge industries, 10 National Strategic Special Zones have been designated to bring significant deregulation and reform.
Simplifying regulations and administrative procedures/Aiming for the world's highest level of appropriate and prompt processing
Fundamentally simplifying regulations and administrative procedures associated with FDI in Japan.
The "Tokyo One-Stop Business Establishment Center" provides one-stop services for necessary procedures.
Promoting online and one-stop procedures for incorporation.
Attracting global talent
The period of residence required for Highly Skilled Professionals to apply for a permanent residence permit was significantly reduced from five years to one at the earliest (“The Japanese Green Card for Highly Skilled Foreign Professionals,“ one of the world’s fastest obtainable green cards)
An online application system related to status of residence will start by the end of FY2018.

Source: Created from Cabinet office website page "Invest Japan"

Attracting visitors to Japan

Business expansion related to inbound tourism
Relaxation of visa requirements (Starting from July 2013)
Expansion of exemption of consumption tax for consumables purchased by inbound tourists (October 2014)
Tokyo Olympic & Paralympic Games in 2020
'Number of inbound tourist and spending on travel. 'Target: 40 million visitors in 2020, 8 trillion yen in spending on travel. Number of international visitors to Japan, 2011-622 million people、2012-836 million people、2013-1,036 million people、2014-1,341 million people、2015-1,974 million people、2016-2,404 million people Record high、2020-4,000 million people (Target). Value of consumption、2011-0.8 trillion yen、2012-1.1 trillion yen、2013-1.4 trillion yen、2014-2.0 trillion yen、2015-3.45 trillion yen、2016-3.8 trillion yen、2017-4.4 trillion yen record high.

Source: Created by JETRO from “Consumption Trend Survey for Foreigners Visiting Japan FY2017 (2015~2017) Annual numbers (final figures)", Japan Tourism Agency