Investment Opportunities in Japan

June 1, 2016

Kazuya NakajoDirector General

Invest Japan DepartmentJapan External Trade Organization (JETRO)

2Copyright (C) 2016 JETRO. All rights reserved.

1. Why invest in Japan now?

2. The Attractiveness of the Japanese Market

3. JETRO’s Functions

1. Why invest in Japan now?

- Addressing the issues common to developed countries

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1. Why invest in Japan now?

New Business models and Know-How

Aging Society

Healthcare and pension

Worn out infrastructure

Environment and energy

0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000

Singapore

HongKong

Seoul

Shanghai

Kuala Lumpur

Tokyo

0 20 40 60 80 100 120 140 160 180

Hong Kong

Singapore

Seoul

Shanghai

Kuala Lumpur

Tokyo

(USD)

(USD) Source : JETRO

Source : JETRO

Office rent (monthly/per sq.m)

Housing rent for expatriates (monthly)

4Copyright (C) 2016 JETRO. All rights reserved.

1. Why invest in Japan now?

- Japan’s business cost

Down to the

20% rangefrom this April

Reduction of the corporate tax rate

1. Why invest in Japan now?

- Japan’s business cost

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Opening up the electricity market

Strengthening of corporate governance

Regulatory reform of medicine andmedical equipment

1. Why invest in Japan now?

- Structural reform

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1. Why invest in Japan now?

2. The Attractiveness of the Japanese Market

3. JETRO’s Functions

2. The Attractiveness of the Japanese Market

“The reason why P&G tests its new disposable diapers in Japan is because Japanese housewives are the strictest

consumers.”-----------------Prof. Michael E. Porter, Harvard Univ.

2. The Attractiveness of the Japanese Market

-Sophisticated market

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Chugoku region 333.4Malaysia 305.0

Kanto region 2,400.8 U.K. 2,461.8

Hokkaido/Tohoku region 698.4 Switzerland 631.2

Chubu region 917.5 Indonesia 919.0

Kinki region 936.5 Indonesia 919.0

Kyushu region 571.5 Sweden 523.9

Shikoku region 162.2 Vietnam 155.6

Source: Cabinet Office, "Report on Prefectural Accounts 2012" (FY2015)

<International comparison of Japanese regional gross production (nominal, FY2012)> (Unit $1 billion)

(as of June, 2015)

2. The Attractiveness of the Japanese Market

-GDP ranked 3rd in the world

Copyright (C) 2016 JETRO. All rights reserved. 9

Country Percentage of GDP

1 Japan 3.87

2 Germany 2.85

3 USA 2.73

CountryNumber of researchers

per 10,000 people

1 Japan 53.8

2 USA 40.3

3 Canada 45.0

＜Research funding by country and percentage of GDP (G8 companies)＞

＜Number of researchers per 10,000 people (G8 companies)＞

RANK1st In the World

World-class in research funding and number of researchers

10

✔ Japan has an intellectual accumulation that generates innovation

-Innovation hub

2. The Attractiveness of the Japanese Market

4th - France (2.23%), 5th - UK (1.63%), 6th - Canada(1.62%), 7th - Italy (1.26%), 8th - Russia (1.12%)

Source: Created from “Survey Result on Science and Technology Research 2015” (Ministry of Internal Affairs and Communication)Date source: “Main Science and Technology Indicators, ” (OECD) etc.

4th - UK (40.5), 5th - Germany (43.9), 6th - France(40.2), 7th - Russia (30.8), 8th - Italy (19.5)

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5.2Million people

19.7Million people

[Target]40

Millionpeople

2003 2015 2020

Source: JETRO, “JETRO World Trading Investment Report”Date Source: Japan National Tourist Organization (JNTO)

Fore

ign

travele

rs to

Jap

an

Year

Tokyo Olympics, Paralympics games

The number of foreign visitors to Japan exceeded 19 million in 2015, a result of new LCC flightsand the easing of requirements for issuing visas. The aim is 40 million by 2020. The growth ofbusinesses targeting foreign travelers is expected.

11

-A Vast Tourism Market

2. The Attractiveness of the Japanese Market

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12

Source：Japan National Tourism Organization（JNTO） “Foreign Visitors to Japan by Nationality and Month for 2015 - Total”compiled by JETRO

81,516

130,183

176,521

249,521

305,447

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

2011 2012 2013 2014 2015

Number of tourists from Malaysia

-A Vast Tourism Market

2. The Attractiveness of the Japanese Market

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13

Case Examples of Overseas Companies’ Advance into Japan and Business tie-up in Tourism

-A Vast Tourism Market

2. The Attractiveness of the Japanese Market

Lodging

•Hotels

•Tourist’s Lodging

•Service apartments

Amusement

•Theme Parks

•Golf Courses

•Spas

•Restaurants

Travel Service

•Travel Agencies

•Online

•Conference service

•Medical

Retail-Finance

•Retail

•Financial service

Transportation

•Airline

•Ship service

•Sightseeing Bus

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14

-Halal Market

2. The Attractiveness of the Japanese Market

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15

- Global Alliances for Japanese Mid-Ranking Companies

2. The Attractiveness of the Japanese Market

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and SMEs

JETRO

Foreigncompanies

SME Support,JAPAN

Financial institution

Financial institution

Investment LimitedPartnership

Japanese mid-ranking companies and SMEs

Consultation

Investment

Investment

Investment

Investmentbusiness partnership

Financing Investment

16

-Collaboration with Japanese companies

2. The Attractiveness of the Japanese Market

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1. Why invest in Japan now?

2. The Attractiveness of the Japanese Market

3. JETRO’s Functions

3. JETRO’s Functions

<FY2003～FY2015＞

Project Supported

More than 14,000

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3. JETRO’s Functions

-Accomplishments & Successful Cases

Foreign companies’ successful startups

supported More than 1,40040%

35%

29%

26%

33%

29%

31%32%

16%

32%

38%39%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

South America

Europe

Asia

Conference room

Consultation

Private office space

Temporary offices

Specialists give advises about how to start up business in Japan

・Business culture・Human resources・Real estate

Temporary offices in 6 major Japanese cities are available for

free of charge for 50 business days

・Legal advise・Business cost・Market regulations

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3. JETRO’s Functions

-Invest Japan Business Support Center (IBSC)

Consultation service

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IBSC KobeIBSC Tokyo

IBSC Yokohama

IBSC Nagoya

IBSC Osaka

IBSC Fukuoka

3. JETRO’s Functions

-Invest Japan Business Support Center (IBSC)

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Talk to JETRO First!

Datang-lah berjumpaJETRO dulu!

Invest Japan DepartmentJapan External Trade Organization (JETRO)1-12-32, Akasaka, Minato-ku, Tokyo 107-6006 JapanTel. +81 3 3582 5234, Fax. +81 3 3505 1990

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Copyright (C) 2016 JETRO. All rights reserved.