Abenomics to draw more Thai FDI

13.02.15

THE JAPAN External Trade Organisation (Jetro) office in Bangkok expects to see more Thai businesses invest in Japan, especially in foods, energy, hotels, and other services under the Japanese government'spolicy to draw more foreign direct investment (FDI) and help revitalise economic growth.

"So far, only a few Thai firms have invested in Japan, while the number of Thai investments in Japan dropped last year. The [Japanese] government sees Thailand as one of the developing nations that have strong potential to invest overseas," Jetro Bangkok president Masayasu Hosumi said in an interview yesterday.

Last year, Jetro Bangkok helped a Thai textile firm with its operations in Japan. In 2012, Jetro helped a Thai consulting business set up a firm in Japan to advise companies in that country on doing business in Thailand.

As Thailand also has a policy to encourage local enterprises to expand into neighbouring countries under the Asean integration, Thai businesses should also consider getting into Japan, which is part of the Asean+3 agreement, Hosumi said.

He added that currency fluctuations were a big factor encouraging Japanese businesses to invest abroad. However, the Japanese government now is encouraging more inward investment.

Under the policies instigated by Prime Minister Shinzo Abe - so-called Abenomics - Tokyo aims to double total FDI to 35 trillion yen (Bt9.5 trillion) by 2020.

According to Jetro, in 2013 FDI into Japan was valued at 360 billion yen, while during the first nine months of last year, total FDI was worth 760 billion yen.

Thailand contributed about US$90.8 million (Bt2.97 billion) in FDI to Japan during the first 11 months of 2014; for full-year 2013, it invested $83 million.

In the other direction, the value of Japanese investment in Thailand was $3.48 billion in the first 11 months last year, and $6.64 billion in 2013.

To encourage Thai companies to invest in Japan, Jetro Bangkok plans to cooperate with the private sector here to organise a seminar providing advice and suggestions. The event is planned for the second quarter. Other activities along the same lines will take place in the near future.

To attract foreign investment, the Japanese government also plans to reduce its corporate tax rate from 34.62 per cent to 32.11 per cent this year, and to 31.33 per cent next year. By 2017, it hopes to get the rate under 30 per cent.

Jetro, meanwhile, is cooperating with embassies on approaching the executives of foreign companies to encourage them to invest in Japan, as well as working with other relevant agencies to build a one-stop support system for foreign investors. Jetro's Invest Japan Business Support Centre provides consultation, legal advice, cost estimation, and other information for investors.

Jetro has also aided municipalities in Japan that invite foreign companies to set up operations there.

Hosumi said every part of Japan was worthwhile for the expansion of Thai businesses, and enterprises of all sizes would be welcomed.

For instance, national strategic special zones have been created, featuring major regulatory reforms aimed at particular investment sectors.

The six national strategic special zones are in Yabu, Hyogo prefecture, a centre for agricultural reform in hilly and mountain areas; Fukuoka, a centre for employment-system reform to promote new businesses; Okinawa, a centre for international tourism; Niigata, a centre for reform in large-scale farming; the Tokyo area including Kanagawa and Chiba, an international business and innovation hub for urban development, employment guidelines, and medical care for foreigners; and the Osaka/Kyoto/Hyogo area, a centre for international innovation in the field of medical care and general support.

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