Seminar on Facilitating Indian Investments in Japan

Advantages of Doing Business in Japan

November 2, 2007, Kolkata

Naoyoshi NOGUCHI
Director General,
Japan External Trade Organization (JETRO), New Delhi

1
 Who We Are

Outlines JETRO's overall sphere of activities

1. Promoting foreign direct investment into Japan (INVEST

JAPAN)
2. Facilitating economic growth in developing countries through trade promotion
3. Cooperating in Economic Partnership Agreement (EPA)
4. Assisting Japan's small and medium-sized enterprises (SMEs)
5. Supplying Japan with foreign economic information
6. Promoting cross-border business tie-ups in high-tech and other key industry sectors
7. Helping Japanese firms expand overseas and aiding efforts to protect intellectual
property
8. Researching developing economies (IDE)

2
 Examples of Indian Firms Expanding
in the Japan Market
ICT

Covansys, Cades, Exim Soft, HCL, Hughes Soft, i-Flex, i-Gate,

Infosys, L&T, Mastek, Mind Tree, Network Program, NIIT, Nucleus,
Patni, Pentasoft, Polaris, PSI, Satyam, Savy, SRM, TCS, Tata Elxsi,
Wipro, ZenSar, (Total more than 80 firms)

Pharma

Ranbaxy, Torrent, Zydus, Accutest Research, Lupin

Auto

Minda Industries, Tata Auto Comp, Hindustan Motors

Other
Cactus Communications, New Indian Insurance, State Bank of India,
TERI, United Phosphorus, VFS Global, Steer Engineering
3
 M&A by Indian firms

・ Ranbaxy entered Japan in 2002 by taking 10% equity stake

in a generic company “Nihon Pharmaceutical Industry Co., Ltd.”
The firm increased its equity stake in Nihon Pharmaceutical
from 10% to 50% making it a joint venture company.

・ Zydus Cadila acquired 100% stake of Nippon Universal

Pharmaceutical Ltd in April 2007.

・ Lupin has acquired 80 per cent stake in Kyowa Pharmaceuticals

Industry Co., Ltd. in Japan in October 2007.

4
 Why Japan?
- World’s Second-largest Market -

5
- World’s Second-largest Market -

Japan’s GDP Compared to Other Countries

(US$ billion)

Source ： Formulated by JETRO based on data from "World Economic Outlook Database" (April, 2006), IMF

6
- World’s Second-largest Market -

GDP Comparison of Japan’s Regions

with Some Countries
(US$ billion)

Note: GDP data for Japan's regions from 2003; for other countries, 2005
Sources ： "Prefectural Economic Almanac" (March 2006), Economic and Social Research Institute, Cabinet Office; "World
Economic
Outlook Database"(April, 2006), IMF; "China Statistical Abstract 2006," National Bureau of Statistics of China

7
 Why Japan?
- Favorable business climate -

8
- Favorable business climate -

New Corporate Law to Stimulate

Business Changes (enacted in May 2006)

■Easier to establish new companies

- abolition of minimum capital requirements

■Flexible corporate management rules

- corporate organizational structure
- Articles of incorporation, etc.

■Flexible merger compensation (from 2007)

- introduction of cash-out merger
- triangular merger in cashless transactions, etc.

9
- Favorable business climate -

Impediments to investment in Japan

(comparison of answers in 1995 and 2005, multiple answers)

13
Slow administrative procedures
7.2 1995
24.3 2005
Complex administrative procedures 14.7
33.3
Closed transaction networks 23.3
22.2
High taxes
18.4
45.3
High real estate prices 41.7 70
High cost of business 65.5
0 10 20 30 40 50 60 70
(%)
10
How Can JETRO Help Your Business?

11
 JETRO’s FDI Promotion Activities

Dissemination of Information
information overseas
— Seminars, website, pamphlets

Business Partnering Events

Invest Japan Business Support Center (IBSC)

— Providing consulting services and temporary office space

12
- How can JETRO help your business ? -

Dissemination of information overseas

● Symposiums, Seminars and

Business Conferences
-JETRO holds numerous symposiums, seminars and
conferences in cities worldwide
2006-7: Invest Japan symposium & Seminar
(London, Hanover, Seoul, Singapore and Silicon Valley, New
Delhi, Bangalore, Tokyo, etc.)

● Website “Investing in Japan”

-JETRO provides information on benefits of the Japanese
market, the investment environment in various regions
and Q&A about procedures etc.

http://www.investjapan.org

13
 Business Partnering Events

● JETRO BIOLINK Forum - BioJapan

(Yokohama, Sep. 2007)
-JETRO supported 70 clusters from 21 countries

● CEATEC Japan 2007 (Makuhari, Oct. 2007)

-JETRO supported 35 companies from 12 countries set-up booths

● Nanotech Japan 2007 (Tokyo, Feb. 2008)

-JETRO will support 15 companies from all around the world

14
- How can JETRO help your business ? -

Business Partnership Events

● Invest Japan Invitation Program

– Business partnering and seminar tours –
-JETRO offers seminars and field trips, and also arranged meetings and
business match-making
FY2006: Medical device industry (Dec. 2006)
Automotive parts and technology industry (Feb. 2007)
Tourism industry (Mar. 2007)
FY2005: Robot technologies industry
Information security industry
Food service industry

● Industrial Tours
-JETRO organizes tours of Japan’s key industrial regions for foreign business
people interested in investing in Japan
FY2006: Microfabrication industry (Okayama Pref. : Nov. 2006)
ICT industry (Ishikawa Pref. : Feb. 2007)
FY2005: Auto industry (Tochigi Pref.)
Semiconductor industry (Ibaragi Pref.)
15
Invest Japan Business Support Center (IBSC)
Locations: Tokyo, Osaka, Yokohama, Nagoya, Fukuoka, Kobe

Consulting Services Facilities

● Marketing ● Free temporary office space

(Tokyo IBSC has 35 spaces)
● Laws and regulations
● Well-stocked library
● National and local government
incentives ● Exhibition space and auditorium
● Cost simulation
● Incorporation procedures
● Employment and labor issues

Over 300 companies used the IBSCs

Currently consulting over 1,000 companies
16
 Indian Firms That Utilized IBSC to
Set-up Business in Japan

 
Torrent Pharmaceuticals
　
Location of parent company: Ahmedabad, Gujarat
                            

Established: April 2006

        

Business: Pharmaceutical

Cactus Communications
　
Location of parent company: Mumbai

Established: July 2007

Business: English language solution (editing, training, transcription)

17
 Indian Firms That Utilized IBSC to
Set-up Business in Japan

 
CADES Digitech
　
Location of parent company: Bangalore
                            

Established: June 2006

        

Business: Engineering and R&D support by Information Technology

Minda Industries
　 Ltd.
Location of parent company: Gurgaon, Haryana

Established: April 2007

Business: Manufacturing components for two & four wheeler

18
 For more information, please contact:

4th Floor, Eros Corporate Tower, Nehru Place,

JETRO New Delhi 110019, INDIA
New Delhi TEL:91-11-4168-3006 FAX:91-11-4168-3003
Naoyoshi_Noguchi@jetro.go.jp
Kei_Kawano@jetro.go.jp
Unit No. 407-408, Prestige Meridian II, 4th Floor, 30
JETRO M. G. Road, Bangalore-560 001, INDIA
TEL:91-80-4113-8168 FAX:91-80-4113-8169
Bangalore
Kazumasa_Kuboki@jetro.go.jp

95, Maker Chambers VI, 9th Floor, Nariman Point,

JETRO Mumbai 400021, INDIA
TEL:91-22-2202-8342 FAX:91-22-2204-8507
Mumbai
Masashi_kono@jetro.go.jp

19
 Thank you

Naoyoshi NOGUCHI
Director General,
Japan External Trade Organization (JETRO), New Delhi
20