Explore Incentives
Deloitte Tohmatsu’s Japan Incentive Insights web tool helps companies find opportunities to invest in Japan.
Steps to Recovery
In 2020, Japan experienced a significant inbound FDI decline, in the wake of what had been a steady increase over several years prior to the pandemic in sectors such as retail and e-commerce. Outbound FDI by Japanese companies looking to collaborate with, or acquire, overseas enterprises had also been on the rise. Which leads one to ask: What’s the outlook for inbound FDI here—and the rest of the world, for that matter—post-Covid-19?
Japan as 196th
One hundred ninety-sixth out of 196 countries. Just behind North Korea. That’s how Japan ranked in 2019 when the United Nations Conference on Trade and Development (UNCTAD) measured the cumulative stock of inward foreign direct investment (FDI) as a share of gross domestic product (GDP).1 FDI ranges from foreign companies setting up new facilities to them buying domestic companies. What a shocking result considering the 20 years Tokyo has spent trying to increase its cumulative stock of FDI. Unless policymakers understand why past efforts have failed, Tokyo is unlikely to realize the new goal it announced in June: to hike inward FDI to 12 percent of GDP by 2030.
Attracting Global Investment
Two recent papers produced by committees of the ACCJ have highlighted the considerable opportunities that would result from changes to regulations that currently hinder Japan’s financial sector from attaining its full potential. And with the Japanese government committed to raising Tokyo’s profile as one of the world’s top financial centers, the committees are hopeful that regulatory authorities here might embrace some of the proposals.