JAPAN
I. Overall market assessment
Political Environment
-Corruption is minimal in
Japan. Japan is ranked 20th
on the 2021 Corruption
Perceptions Index published
by Transparency
International and is
perceived as a relatively
'clean' country in terms of
bribery and corruption.
Japan was equal fourth best
rating in the Asia-Pacific.
- Japan is a country with
good foreign relations with
many countries as well as
alliances around the world,
to promote a peaceful and
stable international
community.
In general, Japan is a
politically stable country, is
ranked 21 out of 194 in
Political Stability Index in
2020. Besides, conflicts and
disputes between Japan and
its neighbours have created
some risks for the security
and political situation in
Japan.
Legal/Regulatory Technological
Economic environment
environment environment
- Japan is ranked 12th on Japan is the third largest - A hub for innovation,
the 2020 Property rights economy in the world. Japan ranks third in the
index. With a GDP more than world for its spending on
- In Japan, there are no one and a half times the research and
restrictions on foreign size of the UK and GDP development. In 2019,
investment specific to per person about four the government budgeted
franchises. On the other times that of China, 100 billion yen
hand, foreign investment Japan remains the high- (approximately $920
in Japanese companies tech powerhouse million) for robotics- and
and businesses is economy of Asia – with innovation-related
regulated under the the second highest spend programs.
Foreign Exchange and worldwide on R&D, a - Japan’s infrastructure is
Foreign Trade Law. keen appetite for known for its
- Japan has a well- developing intellectual sophisticated
developed and property and new trends, organization and
transparent tax system. and an increasingly operational efficiency.
But Japan's corporate tax globalised outlook. There is an extensive and
burden is moderately - The COVID-19 well-developed
high compared with pandemic hit the transportation and
other East Asian economy hard in Japan, telecommunications
countries. with GDP growth is system for the delivery of
-4.6% in 2020. goods and services.
- Japan's population is - The country ranks first
dwindling as the on the Top Ten of the
country's population ages Most High Tech
fast. By 2060, the Countries in the World
population might drop by list by Young Diplomats.
one-third, from 127 - Japan is an important
million to 87 million. component of the
The proportion of the international trading
population over the age system, with a market
of 65 is forecasted to that upholds the rule of
 climb from 27 percent law and supports strong
currently to 40 percent intellectual and real
by 2060. The Japanese property rights
government and business protection.
community are
attempting to mitigate
the consequences on
economic development
and government budget
resources.

II. Japanese coffee market opportunities overview

- The European coffee-drinking culture has positively influenced the consumption of hot
beverages in Japan, leading to an increase in the demand for coffee among young people.
This not only encourages young people to consume instant coffee at specialty cafes and
branded coffee shops, but also encourages them to make their own instant coffee at home,
driving demand for instant coffee increases. And instant coffee is also one of Trung
Nguyen's strengths, which comes in a range of flavors.
- Robusta, a cheaper and more bitter coffee frequently used in instant coffee products, has
seen an increase in demand as Covid-19 preventive efforts keep people at home. This
trend has helped Vietnam, the world's largest producer of robusta coffee, to surpass
Brazil as the top exporter of robusta coffee to Japan between 2020 and 2022. This also
provides Trung Nguyen with an excellent opportunity to enter the Japanese market with
the power of the well-known and delectable Robusta coffee beans.
- The near geographical distance also benefits Vietnam's Robusta coffee and Trung
Nguyen's in the Japanese market. Shipping routes from Vietnam and other regional
suppliers take only half the time compared to Arabica coffee from Latin American
countries to Japan. It can be seen that, with shipping prices increasing rapidly,
Vietnamese coffee exports to markets with close distances plus preferential tariffs when
Vietnam and Japan are both members of free trade the agreement in the region as well as
in the world (CPTPP, RCEP... ) is a great opportunity for Vietnamese coffee to dominate
Japan's market share.
-The Import-Export Department (Ministry of Industry and Trade) cited data from the
International Trade Center (ITC) showing that in 2021, Japan's coffee imports will reach
409.8 thousand tons, worth approximately 1.32 billion USD. , up 2.7% in volume and
11.6% in value compared to 2020. In particular, in 2021, Japan will boost coffee imports
from Brazil and Vietnam while decreasing imports from supplying markets including
Colombia, Guatemala, and Ethiopia. Therefore, Trung Nguyen can accelerate the export
of instant coffee as well as premium coffee beans to Japan.
III. 4 significant issues
Environmental assessment template
1 = Least favourable, 10 = Most favourable
1 = Highest risk, 10 = Lowest risk
Vietnam Japan
Political Environment 6 8
System of government 4 8
Stability of government 5 7
Level of corruption 3 8
Foreign relations 9 8
State ownership of companies 5 8
Terrorism and public security 7 8
Legal/Regulatory environment 6 6
Independence of judiciary/due process 5 5
Contract enforceability 6 6
Tax rates and lows 6 3
Property rights protection 6 9
Environmental protection 8 8
Tariffs 2 3
Other trade restrictions 8 8
Foreign investment policies 7 7
Economic environment 6 7
GDP growth projections 8 6
GDP per capita 1 9
Demographics 9 3
Government budgetary policy 7 8
Inflation rates 4 7
Currency stability 6 7
Strength of labour unions 5 7
Technological environment 6 9
Infrastructure 6 9
Telecommunications and internet 7 9
Availability of required skills 8 9
Intellectual property protection 6 9
Technology transfer requirement/barriers 6 8
Adherence to international standards 9 9
6 8
Total scores
Based on this assessment table, I choose 4 significant issues as we consider investing in
the country. And that is : Tax rates and lows, GDP per Capita, Infrastructure and
Intellectual Property Protection.
1. Tax rates and lows
Tax rates plays an important roles in business as well as considering investing in Japan.
Tax rate affects on business costs as well as profits, businesses have an advantage of low
cost that make them get higher profits.
The World Bank’s Doing Business report ranks Japan number 51 in the area of tax
complexity. Japan is listed among the countries with the highest tax rates with a corporate
income tax rate of up to 30.62% in 2021. For example, if Trung Nguyen conducts
business in the Tokyo area, it involves 19 tax payments a year, including taxes withheld
by the company such as sales tax, VAT and employee-borne labor taxes. Therefore,
Trung Nguyen needs to consider tax issues when entering the Japanese market.
Therefore, when the tax rate is high, on the one hand, it will cause consequences such as
increasing product costs, reducing product consumption, leading to a reduction in
production scale, reduction of labor, on the other hand, the profits after tax will be much
lower. This cause an impact on doing business of foreign enterprises as well as countries
which exports their products to Japan.

Source : Trading Economics

2. Infrastructure
Infrastructure is a key contributor to business growth. Not only access to but also quality
of infrastructure affects firm productivity as well as people's livelihood.
Japan’s urban infrastructure ranks among the world’s best. Japan has a highly developed
physical infrastructure of roads, highways, railways, subways, airports, harbours,
warehouses and telecommunications for distribution of all types of goods and services.
According to WEF’s Global Competitiveness Index 4.0 on Infrastructure, Japan with
93.16/100 points is much higher than the world average with 65.04 points and is ranked .
Therefore, if Trung Nguyen do business in Japan, well-developed infrastructure in Japan
will lower transportation and transaction costs, and facilitate the movements of goods. It
also ensures access to power and water : both necessary conditions for modern economic
activities. And if manufactured in Japan, good infrastructure conditions will help smooth
production and reduce operating costs.

Source: U.S Agency for International Development Page

Japan is ranked 4th/139 on the World Rank and 2th/21 on the Regional Rank
3. GDP per capita
GDP effects on consumer demand, the needs of businesses and the State. GDP growth
positively affects the profitability of businesses. When the economy develops, it usually
creates more jobs, high income per capita.
Japan has one of the highest GDP per capita, with a GDP more than one and a half times
the size of the UK and GDP per person about four times that of China and ranks among
the top three countries in terms of the largest overall GDP. Trung Nguyen will have an
advantage in the Japanese market, because Increased GDP helps increasing businesses'
output and people's incomes , leading to increased spending and increased market
demand, increasing corporate profits.

Source: U.S Agency for International Development Page

Japan's GDP per capita reached more than 40000 USD in both 2019 and 2020, thereby
holding the 2nd ranking in the region as well as high ranking in the world.
4. Intellectual property protection
Intellectual property (IP) currently plays a very important role in socio-economic
development as well as business development, especially in the trend of deep and
comprehensive integration. Intellectual property can generate income for businesses
through the transfer of the right to use, sell or commercialize IP-protected products or
services that can enhance high market share or profit margin for the business. Intellectual
property protection contributes to minimizing losses for manufacturers and businesses
and promotes them to develop legal production and business.Therefore, Intellectual
Property Protection needs to be taken seriously to avoid revealing business secrets as well
as counterfeit goods floating in the market.
Japan is well known as a market that respects Intellectual Property, the system of
protection and enforcement of intellectual property rights in this country is considered to
be highly effective and reliable. Japan has also acceded to international treaties and
conventions to demonstrate that intellectual property protection in Japan is strictly and
fairly enforced. When doing business in Japanese market, Trung Nguyen can be protected
trademark, coffee production technology, thereby avoiding counterfeit products, copying
technology, taste as well as improving business reputation.
According to International Intellectual Property Index 2021 report (by the U.S Chamber
of Commerce Global Innovation Policy Center), Japan is one of the highest-ranking
countries of the global intellectual property rankings in 2021, is ranked 5th with the score
of 91.12%.

Resources:
Agah Ilker Ozer, (2021), International IP Index 2021: Global intellectual property
rankings and Turkey, https://agahilkerozer.com/en/international-ip-index-2021-global-
intellectual-property-rankings-and-turkey/
Privacy Shield Framework, https://www.privacyshield.gov/article?id=Japan-Market-
Overview
Tùng Dương, 2022, Việt Nam đang đứng trước cơ hội mở rộng thị trường cà phê tại
Nhật Bản, Petro Times, https://petrotimes.vn/viet-nam-dang-dung-truoc-co-hoi-mo-rong-
thi-truong-ca-phe-tai-nhat-ban-644091.html
Uyên Hương, 2022, Nhật Bản tăng nhập khẩu cà phê từ thị trường Việt Nam, Bnews,
https://bnews.vn/nhat-ban-tang-nhap-khau-ca-phe-tu-thi-truong-viet-nam/235943.html
The Global Economy – Country Ranking,
https://www.theglobaleconomy.com/rankings/GDP_per_capita_current_dollars/
U.S Agency for International Development, https://idea.usaid.gov/cd/japan/economy#tab-
business-environment