Investment Opportunities in Japan
Protection of Foreign Investment
- Bilateral Investment Conventions Signed By Japan
Japan is a signatory to 12 conventions.
UNCTAD allows you to visualize the list of conventions signed by Japan, and to download these conventions.
- International Controversies Registered By UNCTAD
- Japan has been involved in no case of disagreement concerning foreign investment and up to now, bilateral disagreements have given rise to no expropriation. UNCTAD offers a database listing disagreements and the countries involved, complementary information about the evolution of settlement of international disputes concerning investment.
- Organizations Offering Their Assistance in Case of Disagreement
ICCWBO , International court of arbitration, International chamber of commerce
WTO , World Trade Organization
- Member of the Multilateral Investment Guarantee Agency
Japan has been a member since its creation.
The MIGA website gives a detailed description of all the guarantees it proposes.
Country Comparison For the Protection of Investors
|Index of Transaction Transparency*||7.0||6.0||7.0||5.0|
|Index of Manager’s Responsibility**||6.0||5.2||9.0||5.0|
|Index of Shareholders’ Power***||8.0||6.8||9.0||5.0|
|Index of Investor Protection****||7.0||6.0||8.3||5.0|
Source: Doing Business
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
Procedures Relative to Foreign Investment
- Freedom of Establishment
- Acquisition of Holdings
- Obligation to Declare
The different obligatory declarations in Japan are :
- when a company with a capital of more than 2 billion Yen acquires 10%, 25%, or 50 % of a Japanese company.
- when a company with more than 10 billion Yen acquires business from another company with more than a billion Yen turnover.
- Competent Organization For the Declaration
Ministry of Finance
Japan Fair Trade Commission (JFTC)
- Requests For Specific Authorizations
Investment of foreign capital in the fields of agriculture, forestry, fishing, mines, oil, leather and the industries of the transformation of leather, and telecommunications is examined first by the Japanese government.
Any investment in the banking sector, insurance, security, and pharmaceutical products is subject to license.
Office Real Estate and Land Ownership
- Possible Temporary Solutions
- Located in the main Japanese cities (Tokyo, Yokohama, Nagoya, Osaka, Kobe and Fukuoka), the Invest Japan Business Support Centers (IBSC) managed by JETRO, offer temporary office space (up to 50 working days) and various services and support.
- The Possibility of Buying Land and Industrial and Commercial Buildings
- Risk of Expropriation
- Up to now, bilateral disagreements have given rise to no expropriation.
- Forms of Aid
The Japanese government’s program for promoting imports and investment takes the form of discounts and reductions of taxes, guarantees on loans, and loans at reduced rates.
It also takes the form of assistance for foreign exporters wishing to import into Japan.
- Privileged Domains
- Creation of jobs, national and regional development, protection of the environment, Aid for research and development, poll of competitiveness.
- Privileged Geographical Zones
Since applications for special zones for structural reform began being accepted in April 2003, a total of 910 zones have been established throughout Japan, each with its own distinctive character. Established at the initiative of local governments or private businesses, they are exempt from one or more national regulations. In practice, the acceptance of the projects raises some difficulties, but in theory, this measure offers foreign investors attractive terms for setting up. The Cabinet Office summarizes this policy.
Current efforts concerning the decentralization of public finances should soon allow local governments to use the fiscal tool to draw FDI to their areas.
Click here for a more detailed breakdown of investment conditions region by region.
- Free Zones
Japan no longer has free zones or free ports. Nevertheless, the government wants to facilitate access to the Japanese market through access Zones for imported products located near ports and airports.
Japan’s objective is to develop 22 zones like these with infrastructures designed to facilitate imports and loans at preferential rates and tax reductions.
- Organizations Which Finance
The State, the Japanese development bank, the Japanese bank for international cooperation, Japanese financial corporation for SMEs make loans at advantageous rates.
The regional corporation for the development of Japan develops “nurseries” for companies and obtains long term reduced rate loans valid for foreign companies too.
- The Key Sectors of the National Economy
Medical equipment, pharmaceutical products, biotechnology, dietary supplements
Electronic components, software
Aviation and spare parts, engineering services, the new generation of energy
Tourism, education and training services, safety equipment, telecommunications equipment, the fashion market, real estate products
- High Potential Sectors
The car industry, retail trade, information and communication techniques, biotechnology, medical care, the environment, the sectors relative to elderly people.
The JETRO details the attractiveness of these sectors.
- Privatization Programs
- The energy sector (privatization program being studied)
- Tenders, Projects and Public Procurement
JETRO - Japan External Trade Organization, Tenders
Asian Development Bank, Procurement Plans in Asia
Tenders Info, Tenders in Japan
DgMarket, Tenders Worldwide
Sectors Where Investment Opportunities Are Fewer
- Monopolistic Sectors
The monopolistic sectors are :
- postal services
- telecommunications : foreign investors are not allowed to hold more than 1/3 of the rights to vote in « Nippon Telegraph » and « Telephone Corporation » (NTT)
- arms, explosives, atomic energy, aviation industries and aerospace
- Sectors in Decline
Finding Assistance For Further Information
- Investment Aid Agency
Japan External Trade Organization, JETRO
Invest Japan Business Support Centers (IBSC)
Kansai Council of Investment Promotion
Japan Invest Council
Entry Point Tokyo Business
- Other Useful Resources
- Doing Business Guides
The Lexmundi guide « Doing Business » about Japan
The Deloitte « International Tax and Business Guide » about Japan
Japan Commercial Guide 2010 - Buy USA
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