Chapter 3
Japan's Economic Diplomacy to Promote National and Global Interests
4 Foreign Direct Investment in Japan
Regarding the promotion of foreign direct investment in Japan, the “Council for Promotion of Foreign Direct Investment in Japan,” which has been held since 2014, is spearheading initiatives to promote activities for discovering and attracting investments while gathering opinions from foreign company managers. At the same time, Japan continues to respond to the needs of foreign companies by making further progress in implementing additional measures such as regulatory and institutional reforms and support measures that help improve the investment environment in Japan. Based on the “Five Promises for Attracting Foreign Businesses to Japan,” decided at the second meeting of the Council for Promotion of Foreign Direct Investment in Japan, held in March 2015, foreign companies have been utilizing the Investment Advisor Assignment System3 since April 2016 and are meeting with the relevant State Ministers in charge and State Minister for Foreign Affairs. Japan has undertaken a variety of initiatives in order to meet the target of doubling (compared to 2012) foreign companies' direct investment in Japan to 35 trillion yen by 2020 (33.9 trillion yen as of the end of 2019). In accordance with the Basic Policy on Economic and Fiscal Management and Reform (Cabinet Decision on July 17, 2020), the Cabinet decided on a draft policy for formulating a “Medium and Long-term Strategy for Promoting Foreign Direct Investment in Japan 2021” at the 8th meeting of the Council for Promotion of Foreign Direct Investment in Japan, held in July, which aims to formulate a medium- to long-term strategy that includes Key Performance Indicators (KPI). To this end, this strategy will be discussed with an initial focus on ramping up calls for more start-up companies and calls to rural areas.
MOFA, along with implementing various measures adopted by the Council for Promotion of Foreign Direct Investment in Japan, is also utilizing diplomatic resources to engage in initiatives through diplomatic missions overseas and trade promotion by key government officials. The “Contact Points for Direct Investment toward Japan,” established at 126 diplomatic missions overseas in April 2016, have been collaborating with the Japan External Trade Organization (JETRO) to conduct surveys of requests for improvements to Japanese regulations and systems, call for investments in Japan by making use of networks of contacts at diplomatic missions overseas, and hold events for promoting foreign direct investment in Japan, among other initiatives. Diplomatic missions conducted more than 750 cases in FY2019.
3 A system that seeks to prepare an environment in which foreign companies who have made important investments in Japan can easily consult with the Government of Japan through State Ministers and other officials that oversee the main industries in which these companies engage