"Overview of Recent Policies and Measures to Attract Foreign Direct Investment into Japan"

Overview of Recent Policies and Measures to Attract Foreign Direct Investment into Japan

In recent years, the government of Japan has been implementing various kind of policies and measures to facilitate foreign direct investment (FDI) for the purpose of revitalizing the domestic economy, fostering the country’s competitiveness in the global economy, and promoting innovation and technology development in Japan. In 2013, the Japanese government set a KPI target of "doubling inward foreign direct investment to 35 trillion yen by 2020". This target was achieved when FDI, at the end of December 2020, reached 39.7 trillion yen (appx. US$260 billion). In 2021, the government set a next target of doubling FDI to 80 trillion yen (appx. US$530 billion) by 2030 and has been implementing new policies and measures to further attract FDI.

Under these circumstances, in April 2024, Microsoft and Oracle Corporation Japan have respectively announced that they will make significant investments for cloud computing and AI infrastructure building in Japan. Further, in May 2024, Carlyle Group announced that the group was raising JPY 430 billion (appx. US$2.8 billion) for its new Japan buyout fund. In light of these new trends, we would like to provide a brief overview of these new policies and measures for foreign businesses who are considering to invest in Japan.

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