Japanese industries see post-earthquake renewal - AVCJ Japan

Speaking at the AVCJ Japan Forum, Jesper Kroll, managing director and head of research at J.P. Morgan Securities Japan, said the event shook up corporate leadership structures as aging leaders turned to younger employees for ideas on how to realign business in the changed environment.

"After 3/11 there was a whoosh of energy that came through the country," he said. "There was a feeling of, ‘Wow, you've got to act.' The time for debate is over; it is time for action."

Panelists throughout the forum averred that Japanese products and services still garner a premium for their design, quality and process structure, and this is a huge opportunity for private equity firms looking to establish portfolio companies in overseas markets. However, some obstacles remain, largely in the area of taxation and recouping lost revenue to promote industry.

Kroll highlighted research showing that less than 50% of Japanese citizens pay taxes. He warned that unless the government finds a solution, such as the implementation of a VAT system that rises 1% annually, the country will continue operating at a deficit.

Kohei Okada, director of the industrial finance division within the industrial policy bureau at the Ministry of Economy, Trade and Industry (METI), said the government recognizes the need for tax reform. He added that deepening relationships with trade parties such as the Trans-Pacific Partnership (TPP) and the Food & Drug Administration (FDA) to promote domestic business is also a priority.

"I believe that private equity and venture capital funds will find a role in this agenda," Okada said. "METI will continue to actively implement policies to invite foreign investments to support in helping us to promote Japanese funds."

Meanwhile, measures introduced in recent months to promote venture investing won praise from Ken Yasunaga, managing partner of Entrepia Ventures. He highlighted the positive impact of preferred tax treatment for angel investors, more fluid tax regulations for stock options, and debt guarantees for small- and medium-sized enterprises.

Follow and comment on the AVCJ Japan Forum as it happens via Twitter @AVCJ. Hashtag #AVCJJPN.

 

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• North Asia
• GPs
• Regulation
• Investments
• Japan
• AVCJ Events
• J.P.Morgan Asset Management
• regulation
• tax