A report by European Business Community in Japan released Monday urges the government to promote further economic structural reforms in key areas such as the regulatory framework and legal system.
While praising the ongoing structural reform efforts under Prime Minister Junichiro Koizumi, the business environment in Japan is not as favorable as that in Europe, EBC Chairwoman Isabelle Hupperts told a seminar in announcing the report.
The EBC consists of 13 European national chambers of commerce and business associations in Japan and represents more than 3,000 companies and individuals.
"A great deal has happened in Japan recently," Hupperts said. "In general, the EBC feels that the atmosphere for reform has been quite positive. . . . Having said that, members of the EBC feel that the potential for reform remains to a large extent unfulfilled."
In the report, the EBC presents a set of evaluations and recommendations for the country, covering 27 key areas from taxation to the telecom and financial sectors.
For instance, as a way to increase transparency and clarity in the regulatory system, Japan should give companies written and legally binding clarification on business transactions or particular regulatory situations, Hupperts said.
She also called for increasing the efficiency in the product approval process in such areas as insurance and drugs for animal use.
Meanwhile, to promote foreign direct investment and mergers and acquisitions by foreign firms in the Japanese market, Japan should admit share-for-share deals involving foreign companies, which is not allowed under the Japanese Commercial Code, Hupperts said.
Concerning tax reform, the EBC supports the existing plan of introducing a consolidated tax system in fiscal 2002. But the report says the proposed reform should not place an additional tax burden on companies.