What makes Japan a good market for Singapore companies to venture into?

CNA
Making Business Sense
Why Japan?
WELL-DEVELOPED ECONOMY
As a strong advocate of free trade, Japan is a partner country of various Free Trade Agreements (FTAs), including the Japan-Singapore Economic Partnership Agreement (JSEPA), ASEAN-Japan Comprehensive Economic Partnership (AJCEP), Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the potential Regional Comprehensive Economic Partnership (RCEP). Through these FTAs, Singapore companies enjoy preferential trade access to the Japanese market, the third largest economy in the world with a GDP of US$4.94 trillion.
  • WORLD'S TOP 3 ECONOMIES
  • icon no 1UNITED STATES
  • icon no 1CHINA
  • icon no 1JAPAN


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GOLDEN OPPORTUNITIES FROM A SILVER ECONOMY
Japan’s population enjoys the highest life expectancy in the world. This growing ageing population represents opportunities in the healthcare and service sectors, including medical equipment, pharmaceuticals and biotechnology.
GLOBAL TECHNOLOGY LEADER
Japan’s strong legal system offers security and protection for intellectual property (IP) rights, which propels Japan to rank third in the world for the number of patents filed annually. Forging technology partnerships with Japanese firms is an excellent way for Singapore firms to improve their capabilities and increase their global competitiveness.
  • TOP 3 COUNTRIES FOR PATENT APPLICATIONS
  • icon no 1UNITED STATES
  • icon no 1CHINA
  • icon no 1JAPAN


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FEED-IN-TARIFFS SAVINGS

Japan introduced attractive feed-in-tariffs (FIT)* for renewable energy in 2012, putting the sector on a growth path. This resulted in Japan becoming the world’s second largest solar market in 2016.

Renewable energy accounts for about 15% of Japan’s total electricity production, up from 9% before FIT were introduced.

Although the tariff level has since been reviewed and lowered, the subsidy still makes it attractive for Singapore companies to invest in renewable energy in Japan.

* Fixed electricity prices that are paid to renewable energy producers for each unit of energy produced and injected into the electricity grid.



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More than

40
%
of Japan’s population will be
aged 65 and above by 2050.
Investment Opportunities
Top Industries to Consider
INFRASTRUCTURE

Japan has accomplished a high level of modernisation within a short period of time, and has developed the knowledge and know-how to construct high quality infrastructure with technologies and expertise to realise on-time delivery, high operations rates, low failure rates and long operating life. Sectors include traffic and transportation, ICT, plant and energy, as well as area development.

Moving forward, Japan looks to collaborate with foreign partners to export and help build quality infrastructure abroad for sustainable development. To facilitate collaboration and promote information sharing between Singapore and Japanese infrastructure-related companies in third countries, Enterprise Singapore signed a Memorandum of Cooperation (MOC) with the Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN).

Singapore companies can look forward to opportunities for master planning with Japanese companies such as redevelopment projects in Japan’s regional cities such as the Fukuoka Smart East, as well as other countries in the region including Southeast Asia.

FOOD EXPORTS

Demographic changes, such as an ageing population and the increasing participation of women in the labour force, have led to a greater demand for convenient and ready-to-eat food products. Japan’s ageing population has also created a strong demand for healthy foods that offer nutritional and medical benefits.

The boom in inbound tourists has resulted in increased consumption and spending, as well as demand for differentiated food offerings.

This presents growth opportunities for Singapore food companies. Entrepreneurs looking to export foodstuffs into Japan will however need to overcome stringent food safety regulations before their products can enter the market.

TECHNOLOGY AND INNOVATION

The Tokyo government aims to attract tech firms specialising in Internet of Things (IoT) and Fintech to set up offices in Tokyo. Corporate giants like Softbank are pursuing investment opportunities in promising startups.

With a declining population, the Japanese government is implementing policies to encourage SMEs and startups to come up with innovative ideas that can be exported worldwide.

Japan is also a world leader in industrial robot technology. It is working on combining the technology with an open source, deep learning framework developed in Japan.

Singapore startups can consider entering into strategic partnerships with Japanese companies to identify innovative business opportunities.

TOURISM AND HOSPITALITY
  • Japan ranked
    4
    th
    in the World Economic Forum's 2017 Travel & Tourism competitiveness ranking
  • Since 2010, the number of inbound tourists to Japan grew by an average of
    18.7
    %
    per year
  • 31.2
    %
    2018 marked the largest number of overseas visitors received by Japan over 50 year
Inbound tourist numbers are expected to increase further with the 2020 Tokyo Olympics and Osaka Expo 2025 on the horizon.
Singapore companies can consider partnerships with Japanese corporates to develop innovative ways to capture the tourism and hospitality sectors.
Support for Businesses
Opening Doors for Singapore Companies
  • Enterprise Singapore regularly conducts market immersion workshops that provide insights into Japan. Companies can also participate in trade shows in Japan to assess the market’s interest in their products and build business networks.
  • Enterprise Singapore’s Tokyo office can help Singapore companies access on-ground developments in Japan and advise companies on issues relating to business setup and regulations. Enterprise Singapore can also connect companies with potential partners and projects in Japan.
  • The 2018 Memorandum of Understanding (MOU), signed between Enterprise Singapore, Singapore’s Economic Development Board (EDB), and the Japan External Trade Organisation (JETRO), creates initiatives, events and information exchanges for startups and businesses in both countries.
  • The 2018 MOU also added Japan to Singapore’s Global Innovation Alliance (GIA), providing opportunities for students, entrepreneurs and businesses from Singapore to collaborate in projects with their counterparts from Japan.
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