Japan: The land of rising opportunities

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Masami Ando, Managing Director, JETRO Dubai and MENA.
Masami Ando, Managing Director, JETRO Dubai and MENA.

When economies as large as Japan start to turn around, a multitude of opportunities of growth and investment open up. For the UAE, it is an excellent time to invest in Japan, especially as the nation prepares for Tokyo Olympics 2020.

By Suneeti Ahuja-Kohli

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Published: Mon 19 Oct 2015, 2:39 PM

Last updated: Mon 19 Oct 2015, 4:42 PM

Japan and the UAE enjoy historical trade ties. The partnership that started with mercantile exports has grown manifold and now includes culinary delights, which have become the latest ambassadors  of Japan.
Economics clearly point at Japan as the land of rising opportunities for investors. The world's third largest economy is turning around after decades of stagnant growth, courtesy Abenomics, and opening up a multitude of avenues of investment and growth, especially for investors from the region.
Consequently, the Japanese government at the centre and regional levels are aggressively encouraging investments from abroad. Investors are being offered incentives as well as single points of contact in relevant ministries and agencies for inquires/support regarding doing business in Japan. Local governments too have various incentives and exclusive support for foreign-affiliated companies and foreign companies that are planning to open an office in their region.
Beyond the lure of incentives, it is truly the business opportunities that make Japan a favourable place. "First of all, the re-emergence of Japanese economy after long years of stagnation through Abenomics' monetary-easing policies, tax reforms and other deregulations has made Japan a favourite investment destination. Another reason that attracts investors to Japan is the sophistication involved in the market. Japan's GDP is nearly 500 trillion yen, which is the third largest economy in the world. Again, as Japan has been an innovation hub, the country has an intellectual accumulation that generates new innovations. Japan stands among the top countries in the world in research funding as a percentage of the GDP and number of researchers per 10,000 people. A lot of technology related researches have been taking place in Japan and investors can benefit from new technologies. Fourthly, Japan has a well-developed social infrastructure that can support any business. Japan's business environment is highly evaluated in the World Economic Forum's 'The Global Competitiveness Report 2014-15'. Compared to other major cities in Asia, Japan's real estate cost is lower. And finally, Japan has a comfortable living standard, a country where you can live safely and pleasantly," says Masami Ando, Managing Director, JETRO Dubai and MENA, a trade body that facilitates investments from and into Japan.

Opportunities for UAE investors

For investors looking to expand their footprint in the Far East, tourism and hospitality industries are good bets, considering the forthcoming 2020 Tokyo Olympics. The potential is massive. Investors can set up hotels and restaurants that cater to the tastes of the rising Muslim tourists from the Middle East to the region and are sensitive to their needs, especially of halal foods.
Besides, there are other service industries as well, namely consulting, tourism, ICT, finance, insurance, environment, biotechnology, manufacturing, retail etc.

Structural support

JETRO Dubai's expertise is at hand for prospective venturers. The trade body offers temporary office space to investors through a number of IBSCs (Invest Japan Business Support Center), a business facility that provides the most convenient and cost-effective way to enter or expand business in Japan. "For foreign companies planning to start a business in Japan, we provide information, consultation and other services free of charge, as well as a few services for charge. When you come to Japan, JETRO Invest Japan Business Support Center (IBSC) will support you depending on your business needs by providing consultation and facilities for establishing a business base and starting your business in Japan," adds Ando.
JETRO Dubai was established in the UAE in 1981. Since then the organisation has been working closely with government ministries and departments for strengthening bilateral trade and investment between the two countries. It has been a lynchpin of trade and investments, supporting Japanese companies to establish, expand and secure successful businesses in the Arab Gulf countries, particularly in the emirates. JETRO Dubai office acts as a gateway to Japan for UAE companies, as well as companies from the Arab gulf area and North Africa. 
JETRO promotes export of foodstuff, medical equipment, fashion materials in addition to conventional goods like motor vehicles, electronics, textile and communication equipment.

Japan in the UAE

A look at the number of Japanese businesses operating in the UAE puts things in perspective. As of 2014, 305 Japanese companies have set up shop in the emirates and more than 3,500 Japanese call the UAE their second home.
Japanese brands are among the preferred choice for locals as well as expatriate population, especially in sectors such as electronics, motor vehicles, ICT products, textiles, foodstuff and medical equipment. Japanese food tastes, fashion and hospitality, too, are gaining a strong foothold in the region with the number of Japanese service companies, including restaurants, increasing in number.
Needless to say, JETRO Dubai has a major role to play in the growing popularity of Japan here. It has increased the visibility of the companies by participating in major exhibitions in the UAE, which includes events related to food, healthcare as well as fashion and entertainment. The core of Japan's investments in the UAE, however, lies in the energy sector, mostly in Abu Dhabi. A majority of the more than 300 Japanese companies operating in the UAE are based in Dubai, and among them, most of them are operating from the Jebel Ali Free Zone and the Dubai Airport Free Zone.
"There is growing awareness among the Japanese business community about opportunities in the GCC region, and we are receiving enquiries, not only from big corporates, but also from medium and small companies. Lately, we are also witnessing an increase in the number of enquiries and new startups from service-centered Japanese companies, in the UAE. Through new technologies, innovative ideas and marketing strategies, Japan is expected to sustain the current momentum in trade and investment," informs Ando. 

High-level visits

The relation between UAE and Japan has perennially been strong, and consistently cemented by visits at the state level. In 2013, Japanese Prime Minister Shinto Abe visited the UAE and in 2014, His Highness Shaikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Force, visited the country.
Recently, a 35-member strong high-level UAE business delegation headed by Sultan bin Saeed Al Mansouri, the Minister of Economy of the UAE, visited Japan to explore opportunities of trade and investment. All these have contributed to the strengthening of bilateral economic and cultural relations between the two countries.
The world is an oyster for the two rising economies.

suneeti@khaleejtimes.com
 



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