Last month, Malta signed an MoU with Japan’s fintech industry, an important milestone is stepping up efforts to secure a coveted double taxation agreement. The Corporate Times met TADAHIKO YAMAGUCHI, Chargé d’Affaires at the Japanese Embassy in Malta to discuss what doing business with Japan really means.
In Japan, food is never just food. It is precision, ritual, and above all, trust. The way sushi is prepared, with uncompromising standards of hygiene and attention to detail, offers a metaphor for how the Japanese approach business: patiently, carefully, and always with the highest expectations.
It is through this lens that Tadahiko Yamaguchi, Chargé d’Affaires at the Japanese Embassy in Malta, who joined the Japanese diplomatic service in 1986 and been present in Malta for the past one year and nine months, views the opportunities for Malta and Japan to deepen their economic ties.
“We look at Malta as a jurisdiction that holds a very important advantage over its European counterparts. It is the only country in the European Union that has English as an official language. This fluency will come in very handy in forging lasting business relationships.”
Japan’s Shifting Economy
Mr Yamaguchi reflected on the dramatic changes in Japan’s economy since the 1990s, when the country faced the collapse of the bubble economy and the challenge of deflation, were many companies were forced to restructure.
“The decline in stock and land prices resulted in an increase in non-performing loans at financial institutions. Rising unemployment, caused by corporate bankruptcies and company restructuring, prolonged deflation and sluggish economic growth followed.”
“From the late 1990s to the early 2000s, Japanese companies underwent a rigorous restructuring process that transformed their financial structures by eliminating excess employment, facilities and debt.”
“At the same time, many Japanese manufacturing companies, including electronics and automobile manufacturers, transferred their factories to China, where labour costs are lower. Then, as labour costs increased in China, these Japanese factories started to move to Vietnam, Indonesia and India, looking for lower labour costs.”
“Japan has experienced a steady decline in domestic manufacturing. However, this situation has also created opportunities and space for the development of new advanced technology in a wide range of diverse fields in and surrounding Japanese companies. Today, technology sectors are among the top economic drivers of Japan,” he noted.
The Japanese government has also supported start-up businesses and fostered entrepreneurship by offering significant grants and assistance to encourage people to set up and create new businesses. This is intended to activate the potential for economic and technological development and create a strong and vital foundation for revitalising the Japanese economy.” he said.
Asked about Japan’s most pressing economic problems, Mr Yamaguchi pointed to the sustainability of the productive population.
“Japan is facing the problem of an ageing population, with an increasing number of elderly people and a declining number of young people. The Japanese government is now encouraging older people to remain active in the labour market. “
He drew a parallel to Malta’s own debate on low birth rates, saying: “This is a reality which has long existed in Japan. The country needs to support its citizens and create a better and friendlier environment for having and raising children.”
New Generations
Mr Yamaguchi noted how, over the past ten years, the number of tourists visiting Japan has increased significantly. In 2018, this figure reached over 31.2 million, and after the end of COVID-19, in 2024, it increased to 36.9 million. Japan is now attracting tourists from all over the world, including Malta.
“Not only are there plenty of historical and traditional temples and shrines in the old cities all over Japan, but the Japanese traditional cultural assets are also very precious to tourists. In addition to these, the wide variety of Japanese food, including sushi, ramen and sake, is very popular with people around the world.”
“At the same time, over the past 40 years, Japan’s younger generations have been creating new pop culture, including animation, manga, games and music, and enhancing the country’s appeal to new generations around the world, and many Maltese young people have visited AKIHABARA town of pop culture in Japan.”
This dynamism should work both ways, with more young Japanese travelling abroad to learn about other societies. A recent development in Malta-Japan relations has been the growing number of Japanese students choosing Malta to study English. FELTOM, the Federation of English Language Teaching Organisations in Malta, recently confirmed Japan as one of its top new markets.
“Japanese students travelling to other countries are not only learning English but also building a new and much-needed bridge with other cultures,” Mr Yamaguchi said.
“These young Japanese are very precious potential assets for both Japan and Malta who will lead future collaboration and cooperation of cultural and economic development for both countries.”
The Value of Trust
Turning to business opportunities between Malta and Japan, Mr Yamaguchi highlighted cultural differences that must be understood and respected.
“The Japanese expect the highest standards. When it comes to food, for example, umami quality in food and hygiene standards are extremely high. But we seek these levels in all aspects of life, and this is why we expect the same in business,” he explained.
More than anything else, he stressed, the Japanese prize trust.
“We are a quiet and patient people. Things might take longer to materialise, but that is because we want to ensure the highest standards.”
“When we see high standards, that is when you will win our trust. And once Japanese trust is won, it forms the most solid relationship any business could aspire to,” he concluded.
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