Reasons to Invest in Japan
Japan Offers Numerous Advantages for Foreign Investors
Japan Provides a Stable, Innovative Environment in Which to Do Business
Japan’s economy is steadily recovering following the collapse of the Lehman Brothers in 2008 and the Tōkohu Earthquake and Tsunami in 2011. Japan is set to experience an average real GDP growth of 1.58% per year over the next five years. Unemployment rates are at a low of 3.7% and job-offer-to-applicants ratio have risen to 1-10, the highest in 22 years.
Japan’s strong economy is helped by its economic sophistication and pro-business policies. Japan is the fourth-largest economy in the world and the most complex according to the Economic Complexity Index (ECI). The nation’s largest industries include automobiles, automotive parts manufacturing, electronic equipment, machine tools, chemicals, textiles, and processed foods. Japan’s top export destinations are the United States, China, South Korea, Thailand, and Hong Kong, giving the nation strong economic ties to its surrounding Asia-Pacific neighbors.
The Global Competitiveness Report for 2015-2016 ranked Japan the sixth most globally competitive country in the world, citing the nation’s business sophistication, quality of local suppliers, and strong international distribution controls as some of its most outstanding business features. Among the Fortune Global 500 companies, 54 are headquartered in Japan.
Japan’s economy also benefits from near zero interest rates, continual industry de-regulation, and excellent private and commercial infrastructure.
For companies seeking to establish a regional headquarters, Japan’s location also makes it ideal for conducting business in Japan and the rest of the Asia-Pacific region. Flights from Japan to surrounding cities (Beijing, Shanghai, Singapore, Hong Kong, Bangkok, Sydney) are short, affordable, and often available several times throughout the day, making it easier for businesses to plan trips around normal work hours.
In addition to its positive economic outlook, Japan is noted for its internal stability. The nation is considered one of the most politically stable countries in the world, as well as one of the safest to travel in for work or business.
Japan Supports World-Class, Globally Significant Research and Development Opportunities
Japan has long been a face of national commitment to research and development; since 2000, Japan has ranked in the top three countries for total % of GDP devoted to research and development practices. For every 1,000 employees in Japan, 10 are research professionals engaged in the “conception or creation of new knowledge, products, processes, methods, and systems.”
National commitment to the development of new technology and knowledge exists not only on a government level, but also on a private one. In 2013, Japan received approximately 473,000 patent applications and granted 340,000 of them. Japan has the second-highest number of patent applications per one million people. To promote and encourage research and development, Japan also has some of the strongest intellectual property laws in the world, making it ideal for businesses with research and development interests.
The Scientific American ranks Japan sixth on the Global Science Scorecard, noting the number of patents, fractional article count in a select group of journals, national R&D expenditure, and the number of science and engineering Ph.Ds. awarded as part of its consideration. Additionally, Japan has produced 24 Nobel Prize laureates since 1949, the majority of them winners in the natural sciences.
Businesses can expect to find strong support for research and development activities in Japan; many municipal governments offer incentives packages to foreign companies who establish a research and development center in designated special economic development zones.
Japan's Labor Force Is Among the Most Skilled in the World
Nearly 59% of citizens between the age of 25 and 34 years of age have completed tertiary education; Japan’s education levels are higher than any European nation and the second-highest in the world after South Korea. The Global Competitiveness Report for 2015-2016 ranks Japan ninth for quality of math and science education and third for overall availability of scientists and engineers.
Municipal governments in Japan offer various incentives packages to foreign companies who hire skilled domestic labor as part of expanding their business in Japan.
Read Comprehensive Reports on Japan's Current Investment Outlook
Several comprehensive reports on Japan's current investment outlook are available for download. These annual reports look at the current status of inward FDI in Japan, as well as the efforts of the central and local governments to promote inward FDI, JETRO's inward FDI promotion products, and the overall attractiveness of the Japanese market. Also included are the results of a survey JETRO conducted to foreign-affiliated companies regarding their perception of doing business in Japan.
- JETRO Invest Japan Report 2015 (PDF)
- JETRO Global Trade & Investment Report (PDF)
- Local Government Promotion for the Establishment of Enterprises (PDF)
- New Trends for Direct Investment in Japan (PDF)
- Appeal of Japanese Markets in the Eyes of Foreign Corporations (PDF)
Please visit the JETRO Japan website (https://www.jetro.go.jp/en/invest/reports/) to view more reports.