JETRO’s Invest Japan Report 2025 Is Out — Here's What It Means for Singapore and ASEAN Companies
JETRO has just released its "Invest Japan Report 2025."
Published annually, this report is the most comprehensive overview of foreign direct investment (FDI) flowing into Japan. For any company in Singapore or ASEAN considering Japan as a market, it is essential reading.
This year's edition carries several developments worth paying close attention to. Japan's inward FDI stock has hit a record high of JPY 53.3 trillion. Greenfield investment — new facilities, offices, and operations set up from scratch — reached its highest level in over two decades. And the Japanese government has raised its 2030 FDI target from JPY 100 trillion to JPY 120 trillion.
In this article, we break down the key findings and share our perspective on what they mean for companies looking to enter the Japanese market.
Japan's FDI Landscape — Record Stock, Record Greenfield Investment
At the end of 2024, Japan's inward FDI stock stood at JPY 53.3 trillion, up 4.5% year-on-year and a new all-time high. Net inflows for the year totalled JPY 2.5 trillion. While the pace slowed compared to the prior year, Japan continued to attract more capital than it lost.
The standout figure is greenfield investment. At USD 31.6 billion (approximately JPY 4.8 trillion), it rose 15.4% from the previous year — the largest amount recorded in over 20 years. Large-scale data centre and logistics facility projects drove much of this growth, reflecting demand tied to AI, cloud infrastructure, and supply chain automation.
Cross-border M&A activity also recovered strongly. The number of inbound M&A deals targeting Japanese companies rose 24.6% to 208 transactions in 2024. A weaker yen has made Japanese assets more attractive to foreign buyers, while ongoing corporate governance reforms and an influx of global PE capital have created a more favourable deal environment.
Singapore: Japan's Third-Largest Source of FDI
Among the countries and regions investing in Japan, Singapore ranks third by FDI stock at JPY 6.1 trillion — behind only the United States (JPY 10.6 trillion) and the United Kingdom (JPY 9.1 trillion). Singapore's position grew 14.6% year-on-year, outpacing several larger economies.
This is consistent with what we observe in our day-to-day work. Interest in Japan from Singapore-based companies has been growing steadily, spanning sectors from technology and professional services to F&B and consumer goods. The question we hear most often is not "why Japan?" but rather "how do we actually get in?" — how to set up a legal entity, how to find the right local partner, how to navigate regulations, and how to make use of available grants.
These practical questions are where market entry outcomes are decided.
The Japanese Government Is Actively Courting Foreign Investment
In June 2025, Japan announced its "Program for Promotion of Foreign Direct Investment in Japan 2025," consisting of 5 pillars and 32 specific measures. The 2030 FDI stock target was raised from JPY 100 trillion to JPY 120 trillion, with an additional goal of reaching JPY 150 trillion in the early 2030s.
To put this in perspective, Japan's current FDI stock is JPY 53 trillion. Reaching 120 trillion means more than doubling it within five years. The government clearly recognises that achieving this requires more than aspirational targets — it demands concrete action.
Several initiatives are already underway:
Regional investment zones and grants — Japan is actively working with local governments to attract investment beyond Tokyo, offering incentives for companies that set up operations in regional areas.
Priority sectors: semiconductors, AI, and green transformation — TSMC's facility in Kumamoto is the most visible example, but the broader push spans data centres, clean energy, and advanced manufacturing.
Startup ecosystem development — Measures include easier visa pathways for foreign entrepreneurs and efforts to attract overseas venture capital into Japan's startup scene.
FDI Task Force expansion — Japan's Ministry of Foreign Affairs expanded its FDI Task Force to 11 locations globally in January 2025, including Singapore, to engage directly with prospective investors.
For Singapore and ASEAN companies, the message is clear: Japan is not just open for business — it is actively seeking it.
Where the Opportunities Are — Sectors Attracting the Most Investment
The report's sector-level data reveals where foreign capital is flowing.
In cross-border M&A, software and IT accounted for 41.1% of all deals by volume, followed by services (13.3%) and electronics (6.4%). On the FDI flow side, the top three sectors were finance and insurance (JPY 746.2 billion), telecommunications (JPY 434.7 billion), and services (JPY 309.3 billion) — all in the non-manufacturing space.
The pattern is clear. Japan's ageing population and labour shortage are creating strong demand for technology-driven solutions — automation, SaaS platforms, digital infrastructure, and professional services. Companies from Singapore and ASEAN that operate in these areas are well positioned to address needs that Japanese businesses are increasingly willing to source from abroad.
What Makes Japan Entry Challenging — and How to Get It Right
Despite the favourable macro environment, entering Japan remains complex. The market rewards companies that take the time to understand its particularities. A few areas consistently determine whether a market entry succeeds or stalls:
Finding the right local partner. Japan is a relationship-driven market. Whether you need a distributor, a sales agent, a JV partner, or a technology collaborator, identifying and securing the right counterpart takes research, outreach, and often, introduction through trusted intermediaries.
Setting up the right legal entity. The choice between a Kabushiki Kaisha (KK) and a Godo Kaisha (GK) has implications for governance, taxation, and credibility with local partners and customers. The incorporation process, while straightforward on paper, involves several steps that benefit from experienced guidance — from company registration and bank account opening to tax filings and compliance.
Leveraging available grants. Singapore companies can tap into Enterprise Singapore's Market Readiness Assistance (MRA) Grant, which can cover up to 50% of eligible costs for overseas market entry activities. Knowing how to structure a project to qualify, and how to navigate the application process efficiently, can significantly reduce the financial burden of Japan entry.
How Global Gateway Advisors Can Help
Global Gateway Advisors is a consulting firm with offices in Tokyo, Singapore, Malaysia, and Vietnam, supporting ASEAN and global companies in entering the Japanese market. Our work ranges from hands-on market entry execution — partner identification, incorporation, and go-to-market strategy — to consulting on Japan market mission tours for government trade agencies.
In March 2025, we were formally approved as an Enterprise Singapore (EntSG) certified partner, recognising our capability to support Singapore companies expanding into Japan.
If you are a Singapore -based company exploring Japan as your next market, we would welcome the opportunity to discuss how we can support your entry. Whether you are at the early research stage or ready to move, our team can help you navigate the process from start to execution.
The Window Is Open
Japan's JPY 120 trillion FDI target is not just a number on a policy document. It represents a structural shift in how the country approaches foreign investment — more incentives, more infrastructure, and more openness than at any point in recent history.
For Singapore and ASEAN companies with the right product, service, or technology, the conditions for entering Japan have never been more favourable. The data in JETRO's report confirms it. The policy environment supports it. And the demand from Japanese businesses is real.
If you need any helps in go to market support in Japan, please feel free to contact us.
If you are Singapore based company, looking at taking up Market Readiness Access Grant, please also see the JIP programme that we launched.
This article is based on publicly available data from JETRO's "Invest Japan Report 2025." Full report: Japanese | English
