Doing Business in Japan – Investment Opportunities in Japan

[co-author: Mikio Tanaka, Hitoshi Sakai]*

1. What is the current business climate in your country, including the major political, economic and/or legal activities arising in your country that could have a material impact on the business?

Although the COVID-19 epidemic in Japan is still out of control, legal work is active in Japan.

Recent changes to the foreign exchange and foreign trade law affect the stage of acquisition of shares and the creation of new companies by foreign companies.

2. In which countries do you see the most incoming investments? What about the outgoing?

    According to the national statistics for 2020, the top 10 investing countries in Japan are Great Britain, the United States of America, Switzerland, Singapore, China, France, the Netherlands, Hong Kong, Thailand and Germany. The top 10 countries for foreign investment are the United States of America, Luxembourg, Switzerland, Australia, the Netherlands, China, Singapore, Cayman Islands, Thailand and the United Kingdom.

    We have the impression that the statistics are reflected in our business. Since we have a large client in Singapore who is constantly investing in Japanese real estate, we have a large incoming business from Singapore. Since we also have strong German and Korean training teams, we have a large number of German and Korean investments in both directions.

    3. In which industries/sectors do you see the greatest opportunities for foreign investment?

      From/to the UK, Hong Kong and Luxembourg, the main business opportunities are financial investments. With respect to other jurisdictions, the business is diverse – manufacturing of transportation machinery and parts, electronics, food, chemistry, healthcare, energy, real estate, aviation, marine transportation, etc.

      4. What are the advantages and pitfalls that others should be aware of before doing business in your country?

        Japan is part of Roman law A system in which law plays an important role, but in the field of labor law, case law plays an important role.

        Business Rules (RoE) is mandatory If 10 or more employees work regularly, they must be submitted to the responsible labor inspectorate. Equity law is unique and often causes problems for foreign-owned companies, among other things, in the event of a conflict between the RoE and the individual employment contract, the most advantageous contract for the employee is applied. Accordingly, the foreign parent’s HR department must control both the RoE and the individual employment contract.

        control system Japanese law is unique.

        organizational Compared to Western countries, the legal texts are rather vague and the authority has a wide margin of secrecy. Close contact with the authorities is very important sometimes.

        5. What cultural facts or customs in your country should others know when doing business there?

          Western style sales services do not work (especially over a cold call connection). Because human relationships are vital, you always need personal recommendations. However, once a good relationship is established, there is a good chance that the customer will remain loyal.

          *City-Yowa-Partner

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