Reason 1: An Ever-growing Economy Why Japan?　“5 Reasons to Invest in JAPAN” Japanese economy steadily recovering from deflation Improving GDP growth rate Source: Fiscal 2017 Economic Outlook and Basic Stance for Economic and Fiscal Management, Cabinet Office website

Business performance showing significant improvement Reason 1: An Ever-growing Economy Why Japan?　“5 Reasons to Invest in JAPAN” Business performance showing significant improvement Corporate ordinary profits (all industries) Unemployment rate and jobs-to-applicants ratio Source: Created from "Financial Statements Statistics of Corporations by Industry, Quarterly," Policy Research Institute, Ministry of Finance of Japan Source: Created from "Labor force survey," Ministry of internal Affairs and Communications; and "Statistics on Employment Referrals for General Workers," Ministry of Health Labor and Welfare

Reason 1: An Ever-growing Economy Effective corporate tax rate declining Effective corporate tax rate reduced to 20% level Source: Created from "FY2016 Tax Reform (Main Points) (December 2015),"Ministry of Finance and other information on the website Note: Tax rates as of April 2016

The stock of Japan's inward FDI Reason 1: An Ever-growing Economy Promotion of inward FDI Government target: Increase Japan’s inward investment stock to 35 trillion yen by 2020. The stock of Japan's inward FDI Source: Created from "Balance of Payments," Ministry of Finance

Foreign/ Foreign Affiliated companies Launched project-based “REGULATORY SANDBOX” scheme （June 2018-） Launch a scheme for carrying out trials freely for new businesses for a certain period of time, without conforming to existing regulations Feature of “REGULATORY SANDBOX” scheme JETRO is in charge of point of contact for foreign and foreign companies “Let’s try it first!” ●In case that a relationship between aiming new business / new technology and regulation generates a problem ●periods and participants be limited and then demonstration be conducted ●Data will be collected by demonstration and regulatory reform be implemented based on it Dialogue with market/ policy formulation by demonstration “Due to the regulation of the law, it seems hard to commercialize the business. How can we make it...?” Foreign/ Foreign Affiliated companies Consultation Besides introducing the Sandbox scheme by staff in charge at home and abroad, JETRO makes a contact with Cabinet Secretariat. JETRO Cooperation Cabinet Office As a center of point of contact, coordinate with each competent ministries and agencies as well as support creation of application forms Request for consideration In addition to conducting demonstration experiments, competent ministry will review the regulatory system Competent Ministry

Japan’s GDP is about 500 trillion yen, World’s 3rd ranking GDP. Reason 2: A Sophisticated Market Japan’s GDP is about 500 trillion yen, World’s 3rd ranking GDP. Japan's regional economies have GDPs equal to those of entire countries. Source: Cabinet Office, “Report on Prefectural Accounts 2013” (FY2016)

An environment that generates innovation Reason 3: An Innovation Hub An environment that generates innovation Japan’s patent track record Number of international patent applications per 1 million people Number of filed patents by country of residence of applicant Japan's patent system is internationally praised. Source: "The Global Information Technology Report 2016,“ World Economic Forum Source: Japan Patent Office Annual Report 2016 Data source: WIPO (World Intellectual Property Organization) Source: "OECD Factbook 2015-2016" Better environment for development and patent application of drugs and medical devices ・An environment to support sustainable development of innovative drugs by pharmaceutical companies, including a preferential pricing system for designated new drugs and the prioritized review for early authorization ・Deregulation to promote practical use of medical devices, reduction of development costs and expedition of approval procedures ・The world's most advanced early approval system for regenerative medicine which halves the necessary time frame from R&D to approval for marketing Source: Created from "Pharmaceutical Industry Vision 2013;" Ministry of Health, Labor, and Welfare

Innovation created in Japan by foreign companies Reason 3: An Innovation Hub Innovation created in Japan by foreign companies Nation wide GE Developing high-tech products through collaboration with Japanese enterprises Kawa saki Johnson & Johnson Training facility for medical care workers Kawa saki L'Oréal Developing advanced cosmetics with Japanese technology Hyogo Caterpillar Core base of worldwide hydrauric shovel development Yama gata 3M Global "Super Hub"in Yamagata Source: Created by JETRO from each company's website, press releases and other information.

Reason 4: Business-Friendly Infrastructure Supporting business with well-developed social infrastructure Japan’s business environment and IT infrastructure was highly rated in the World Economic Forum's reports. Source: “The Global Competitiveness Report 2016-2017,” World Economic Forum Source: "The Global Information Technology Report 2016," World Economic Forum

A safe and peaceful country Reason 5: A Comfortable Living Environment A safe and peaceful country Global Peace Index 2016 Safe Cities Index Among major 50 cities in the world, Tokyo 1st and Osaka 3rd Source: "Global Peace Index 2016," Institute for Economics and Peace Source: "Safe Cities Index 2015," The Economist Intelligence Unit Social stability Source: Survey on Attitudes of Foreign-Affiliated Companies toward Direct Investment in Japan Report 2016," Ministry of Economy, Trade, and Industry (METI)

Case Study MER MEC JAPAN GK

Advantages of Japan-EU EPA for the EU 1. Improvement of Market Access Expanding business opportunities will - Improve productivity - Accelerate GDP growth - create EU jobs – every €1 billion in EU exports supports 14,000 jobs in EU. Liberalization: approximately 94 % of goods in Japan Liberalization: approximately 99 % of goods in EU 5. Regulatory Cooperation 2. Protection of Geographical Indication The deal will, especially in agricultural and motor vehicle sectors, enable two parties to; - discuss how to address issues when the two sides' regulations diverge or are incompatible. - work more closely together on developing international standards Japan will recognize 210 EU’s GIs. This protects European farmers and producers selling abroad. 3. Government Procurement 6. Promoting Investment The deal will expand the opportunities for EU suppliers to participate in open tenders in Japan– Central and Sub-central. In railways sector, the deal will also improve market access to Japan for EU companies. The deal will promote Japan’s foreign direct investment in EU because; - of improvement of investment climate - Japanese companies would feel more familiar to EU market as a result of closer trade relationship. 4. Trade in Service 7. Trade and Sustainable Development The deal will open up Japan’s services market to EU firms. The deal will show commitments to internationally recognized environment and labour standards. 〔Source : European Commission, Ministry of Foreign Affairs of Japan〕