Japan's FDI: Analysis of Emerging Market Dynamics and Growth

This report examines the increasing trend of Foreign Direct Investment (FDI) in Japan, highlighting its emergence as a significant destination for international investment. The report defines FDI and its importance in the global economy, citing statistics on global FDI in 2018 and its subsequent decline in 2017. It explores Japan's appeal to foreign investors, including its robust economy, large consumer market, skilled workforce, and strong adherence to rules and regulations. The analysis underscores Japan's commitment to free trade and its efforts to create a favorable business environment, making it an attractive location for investors seeking high returns. The report references sources such as Trading Economics and the Japanese government's website to support its findings, providing insights into the factors that drive FDI into Japan and the benefits it offers to investors. The report provides a concise overview of the current FDI landscape in Japan.

Running head: FDI IN JAPAN
FDI IN JAPAN
NAME OF THE STUDENT
NAME OF THE UNIVERSITY
AUTHOR NOTE

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Table of Contents
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2Japan-Emergence of New FDI DestinationJapan-Emergence of New FDI Destination In Japan
FDI
Foreign direct Investment or FDI occurs when a company or the individual owns more
than ten percent shares in the foreign company. However, just holding ten percent doesn’t give
the individual or the company any kind of ownership right over the company neither did it allows
them to be a part of the management. Therefore, government track investments made in their
country’s business. In the year 2018, it has been recorded as per the United Nations Conference
on Trade and Development that there was a global foreign direct investment of $12 trillion. The
FDI got down in the year 2017 by twenty percent ("Why Foreign Direct Investment Is
Plummeting", 2020).
It has to be noted that FDI is very important for the market emerging and for the
countries which is developing. It enables the capital to transfer in anywhere in the world, thereby
it is pretty beneficial for the investors and the global economy as a whole. Investors can seek best
return with the least risk. The negative factor about the FDI will be that the foreign investors may
strip the value of the business without actually adding any.
Japan-Emergence of New FDI Destination
It has been noted that the FDI is emerging and flourishing in Japan and it has started
increasing since 2011. In 2017, the inward FDI has hit the highest record. Japan being the
world’s third largest economy, is letting and making way for the outsiders and foreign investors.
They are making the best possible environment in order to attract the foreign investors. Its
creating the lucrative market potential and therefore provide high value added capital and the
highest rate of return. ("Japan Foreign Direct Investment", 2020)

3Japan-Emergence of New FDI DestinationJapan-Emergence of New FDI Destination In Japan
The consumer rates are high with around 120 million ("Quality Business Environment -
JapanGov - The Government of Japan", 2020) and it provide skilled and diversifying workforce,
which is the added advantage for anyone who want to be a part of any business of any nation.
Japan has been recognized as the leader of the world in the research and development category
along with possessing quality IP assets, which however will enable the investors to surf through
with new value creation opportunities.

4Japan-Emergence of New FDI DestinationJapan-Emergence of New FDI Destination In Japan
Last but definitely not the least, Japan has been recognized as the country where there is
an absolute adherence with the rules and regulation and they follow laws in every aspect of their
lives. Japan is even keen in making harmonize laws and rules and regulation cross borders in
order to raise the banner for then free trade through different agreement on the multilateral free
trade.

5Japan-Emergence of New FDI DestinationJapan-Emergence of New FDI Destination In Japan
Source- ("Quality Business Environment - JapanGov - The Government of Japan", 2020)
As the investors are not into their own nation, therefore the laws are different in other
countries and there are several other laws for the outsider doing business in the country and
therefore all these added benefits enables them to actually will to invest into Japan.

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References
Japan Foreign Direct Investment. (2020). Retrieved 24 January 2020, from
https://tradingeconomics.com/japan/foreign-direct-investment
Quality Business Environment - JapanGov - The Government of Japan. (2020). Retrieved 24
January 2020, from https://www.japan.go.jp/investment/quality_business_environment.html
Why Foreign Direct Investment Is Plummeting. (2020). Retrieved 24 January 2020, from
https://www.thebalance.com/foreign-direct-investment-fdi-pros-cons-and-importance-
3306283