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Strengthening the UAE–Japan Corridor for Sustainable Growth, Innovation, and Opportunity
Marek Lehocky, CEO-Kreston ProWorks (Japan)
Japan and the United Arab Emirates stand today at a pivotal moment in their economic relationship. On one side, Japan is entering a new phase of confident economic renewal, industrial reinvestment, and global engagement. On the other, the UAE has rapidly developed into one of the world’s most dynamic hubs for capital formation, holding structures, and cross-border corporate expansion.
These two economies, one built on technological depth and institutional stability, the other on visionary diversification and global connectivity, are increasingly converging into a powerful investment corridor. For investors in Dubai as well as multinational groups across the GCC, Japan has re-emerged as one of the most compelling destinations for long-term growth.
This article explores the forces behind Japan’s investment momentum, the strategic advantages of the popular Dubai–Singapore–Japan structure, and a practical case from the Osaka World Expo 2025 demonstrating how UAE businesses can thrive in Japan with the right partners.
Japan 2025: A Stable, High-Value Market Entering a New Cycle
Japan’s economic renewal is driven by several foundational strengths that matter deeply to international investors:
A Growing, Balanced Economy
Japan’s GDP in 2025 is forecast to grow around 1.1%, supported by moderate inflation consistently above 2%, a sign of healthy demand and policy stability. Corporate earnings have strengthened, and capital markets have seen broad-based optimism over the past three years.
Tokyo: One of the World’s Most Powerful Economic Cities
According to figures presented at our recent Kreston World Conference in Tokyo, the capital city alone represents:
- USD 1.01 trillion GDP,
- USD 6.5 trillion in market capitalization, and
- USD 15.2 trillion in household financial assets.
The Tokyo Metropolitan Government also highlighted its position as:
- #1 globally in the City Resilience Index,
- #2 worldwide in foreign company headquarters,
- #3 worldwide in the Global Power City Index.
These indicators reflect a stable, highly globalized ecosystem where international businesses can expand with confidence.
Strategic Sector Expansion
Japan’s industrial strategy emphasizes long-term investment in:
- Semiconductors (major TSMC and Rapidus projects),
- Green transformation & hydrogen,
- AI, automation, and robotics,
- Advanced mobility and defense manufacturing,
- Digital infrastructure and data centers.
For UAE investors accustomed to deploying capital into scalable, future-ready sectors, Japan provides not only a large market but also an innovation platform with government-backed stability and predictable tax policy.
Why UAE Investors Are Increasingly Looking Toward Japan
The UAE and Japan share a long history of economic cooperation, but 2024–2025 brought a noticeable increase in two-way investment. Several trends explain this momentum:
1. Complementary Strengths
- The UAE provides capital mobility, a pro-business regulatory environment, and strategic location.
- Japan offers advanced manufacturing, technological depth, and institutional reliability.
Together, they form a natural fit for multinational companies looking to scale globally.
2. Growing Cultural and Business Connectivity
In November 2025, the Governor of Tokyo delivered a keynote address at the Kreston World Conference, an important symbol of Japan’s commitment to deeper engagement with global investors and particularly with Middle Eastern partners.
3. Demand for High-Quality Project Delivery
Japan continues to attract large-scale events and international projects, increasingly relying on specialized operators from the UAE and beyond. This strengthens the flow of expertise, goods, services, and capital.
A Popular Investment Route: The Dubai–Singapore–Japan Structure
For investors entering Japan, one of the most efficient, tax-optimized and widely accepted approaches is a three-tier holding model, often structured as follows:
1. Dubai Holding Company
Dubai serves as an excellent anchor for global wealth and investment platforms because of:
- 0% tax on dividends and capital gains for qualifying entities,
- Free repatriation of profits,
- Strong banking and substance infrastructure,
- Excellent global mobility for capital and management.
2. Singapore Regional Subsidiary
Singapore provides the operational and treaty benefits needed to manage the Asia-Pacific region:
- 17% corporate tax with incentives reducing effective rates for many groups,
- Tax treaty with Japan reducing withholding tax on dividends to 5% and on royalties/interest to 10%,
- Strong recognition by Japan’s NTA in terms of substance and transfer pricing transparency.
3. Japanese Operating Entity (KK or GK)
This entity conducts the commercial activity in Japan – sales, hiring, contracts with access to:
- Local subsidies for high-value industries,
- Startup and foreign entrepreneur programs,
- Preferential zones offering regulatory and administrative support.
Why this structure works: It balances tax efficiency, regulatory predictability, and commercial credibility, making it ideal for holding, financing, IP management, and regional command-center functions while keeping Japan operations compliant and locally respected.
Case Study: A Dubai-Based Global Events Leader at the Osaka World Expo 2025
In 2025, Kreston ProWorks Japan had the privilege of supporting a prominent Dubai-headquartered company specializing in the management of global mega-events including Olympic Games, World Cups, and World Expos.
The Challenge
For the Osaka World Expo (April–October 2025), the company was responsible for operating national pavilions for more than 10 countries, requiring the hiring and management of over 400 staff in Japan. The project required:
- Rapid, compliant onboarding of multilingual teams,
- Complex payroll and HR operations,
- Direct coordination with government, pavilion commissioners, and international sponsors,
- Full employment and tax compliance under Japanese law.
Our Role
As their local partner, Kreston ProWorks provided:
- Full operation of the Project holding Co.
- Employer-of-Record (EOR) services,
- Payroll, HR, treasury and tax compliance,
- Corporate governance support,
- Hands-on operational guidance during the full duration of the event.
The successful delivery demonstrated that UAE expertise + Japanese execution capability create a highly competitive combination for large-scale, international projects in Japan.
Kreston ProWorks Japan: Your Gateway to the Japanese Market
For over 18 years, Kreston ProWorks has served as a full-service in-bound advisory firm for foreign-owned companies in Japan. From Tokyo and Honolulu, our team supports clients through:
- Market-entry and corporate establishment
- Accounting, tax, and compliance
- HR, payroll, and Employer-of-Record solutions
- Transfer pricing and permanent establishment advisory
- Banking, governance, and regulatory support
- Other Advisory Services
As members of Kreston Global, we work seamlessly with our colleagues in Dubai and Singapore to establish necessary relationships and build international structures that are strategically and fiscally optimized while remaining fully compliant in Japan.
Our approach is simple: Local knowledge. Global coordination. Seamless execution.
Looking Ahead: The UAE–Japan Corridor in 2026 and Beyond
The next decade will be defined by stronger Asia–Middle East connectivity. Japan’s focus on technological resilience, industrial independence, and sustainability aligns closely with the UAE’s ambitions to become a global nexus for capital, innovation, and logistics.
For private investors, family offices, and corporates in Dubai, Japan represents:
- A safe jurisdiction for large, long-term investments
- A sophisticated market with rising demand for foreign expertise
- A global hub for manufacturing, technology, and green innovation
With the right structure, advisory team, and local partner, Japan becomes not just a market to enter—but a strategic base for global expansion. At Kreston ProWorks Japan, we stand ready to support investors on this journey and to strengthen the bridge between Dubai and Tokyo for years to come.
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Strengthening the Japan-UAE Partnership: A Vision for Economic and Business Collaboration
H.E. IMANISHI Jun, Consul-General of Japan to Dubai
Over the last decade, the relationship between Japan and the United Arab Emirates (UAE) has witnessed remarkable growth over the years, evolving into a robust partnership characterized by mutual respect and collaboration.
Through the World Expos, the UAE and Japan have shared a historically deep relationship. Fifty-five years ago, Abu Dhabi participated in its first Expo in Osaka in 1970. Expo 2020 Dubai was a defining moment in the UAE’s global engagement. Having taken the baton from Dubai, the Osaka-Kansai Expo under the theme “Designing the Future Society for Our Lives.” was successfully concluded. Expo 2025 became a proving ground for shared human progress for both countries.
While the Japan Pavilion at Expo 2020 Dubai achieved great success, winning a gold award for design, the UAE Pavilion at Expo 2025 Osaka, which featured many palm trees, attracted over 5 million visitors, won the BIE Bronze Award and showcased innovation and culture, thereby reinforcing the UAE’s vision of global collaboration. The Expos in both the UAE and Japan enabled the two nations to rediscover themselves, providing a unique opportunity to showcase technological, cultural and sustainable advances in addressing global challenges.
As the Consul-General of Japan in Dubai, I have had the privilege of providing an overview of the current state of our partnership. I have also highlighted concrete examples of business and economic collaboration and shared my perspectives on future opportunities for cooperation.
Japan-UAE relations are anchored in shared interests and common goals, including economic diversification, innovation, and sustainable development. The UAE’s strategic location at a global crossroads of the Middle East and Africa is of great importance, and Japan’s technological expertise and economic strength provide a solid foundation for collaboration.
One of the most significant recent developments in our bilateral relations is the ongoing negotiation of the Japan-UAE Economic Partnership Agreement (EPA). Once concluded, the agreement is expected to enhance trade and investment, thereby fostering economic growth and job creation in both countries.
Over 300 Japanese companies have already established a presence in Dubai, with many using it as their regional headquarters for the Middle East and Africa. These companies have contributed to iconic projects such as the Dubai Metro, the Jumeirah Monorail, and Terminal 3 at Dubai International Airport, showcasing the depth of our commitment to the development of Dubai.
Japanese companies have played a significant role in shaping Dubai’s urban landscape. Their cooperation extends beyond infrastructure to encompass crucial environmental projects. For instance, they are actively developing decarbonization initiatives and sustainable infrastructure, such as the Warsan Waste Management Centre. This facility generates electricity from waste heat and has the world’s largest processing capacity of 5,660 tons per day.
Another example of a successful Japanese company’s contributions is the UAE’s vital water infrastructure, which relies heavily on advanced Japanese desalination pumps. Representing the cutting edge of innovative and environmentally conscious technology, these pumps ensure a consistent supply of water to homes, businesses, and critical facilities throughout Dubai and the wider UAE.
The UAE has long been a crucial energy partner for Japan, supplying nearly 40% of our crude oil. However, our collaboration is now expanding beyond traditional hydrocarbons to encompass exciting opportunities in renewable energy and decarbonization. Japan’s expertise in these fields aligns with the UAE’s commitment to renewable energy and complements the UAE’s ambitions for a sustainable energy future. In Sharjah, a joint project with SNOC to capture and store CO2 underground (CCS) is progressing well. These projects demonstrate Japan’s commitment to supporting the UAE’s Vision 2031 and beyond.
Looking to the future, technology and innovation are promising fields in which to deepen our partnership. The UAE’s commitment to establishing itself as a hub for technology and innovation aligns with Japan’s expertise in artificial intelligence, robotics, and digital transformation. Collaborative initiatives in these areas can drive economic growth and enhance competitiveness. For example, Professor Hiroshi Ishiguro’s groundbreaking work in robotics as demonstrated through in a remote avatar-based sales pilot with customers in Dubai, is a prime example of this.
Japan and the UAE have also made significant strides in the field of space cooperation. As part of the Emirates Mission to the Asteroid Belt (EMA), the UAE Space Agency plans to launch the “Mohammed Bin Rashid Explorer” spacecraft aboard a Japanese MHI H3 rocket in early 2028. This collaboration underscores the potential for joint exploration and innovation in space technology and will further strengthen the bilateral ties.
Last but not least, cultural exchange plays a vital role in fostering closer ties between Japan and the UAE. Promoting inbound tourism, alongside cultural exchange programmes, can strengthen people-to-people bonds and enhance mutual understanding.
In 2025, high school students from Tokyo and junior high school students from Arida City in Wakayama Prefecture visited Dubai for exchange programmes. Furthermore, the MBR Leadership Programme saw future leaders from Dubai visit Japan.
Such exchanges will cultivate the new generation of leaders who are ready to address global challenges. In 2025, the UAE and Japan eased visa restrictions for each other’s citizens, allowing visa-free short stays of up to 90 days. We hope that exchanges between citizens will continue to be further promoted.
The partnership between Japan and the UAE is a testament to the power of collaboration and shared vision. By leveraging our respective strengths and exploring new avenues for cooperation, we can build a prosperous, innovative and sustainable future. As the Consul-General of Japan in Dubai, I am committed to supporting and advancing this partnership to ensure that it continues to thrive for the benefit of our two nations and their peoples. Addressing today’s shared global challenges requires us to deepen our collaborative efforts. Together, we can achieve remarkable milestones and set new standards for international cooperation in the 21st century.
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UAE E-Invoicing: A New Era of Digital Tax Compliance
Anmol Rathi, Manager - Indirect Tax, Kreston Menon
The United Arab Emirates (‘UAE’) is embarking on a transformative journey in its tax administration landscape with the introduction of a nationwide Electronic Invoicing System (EIS). This initiative, spearheaded by the Ministry of Finance (‘MOF’) and the Federal Tax Authority (FTA), aims to digitize the issuance, exchange, and storage of invoices in a structured electronic format. The legal foundation for this reform is laid out in Ministerial Decisions No. 243 and 244 of 2025, which define the scope, obligations, and phased implementation of e-invoicing across the country.
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The AI Revolution in UAE Audit and Finance: From Compliance to Strategic Intelligence
Raju Menon, Chairman and Managing Partner - Kreston Menon
I have spent three decades in finance, and I can tell you what is happening right now in the UAE is unlike anything we have seen before. AI is not just another tool in the auditor’s kit. It is fundamentally changing what it means to work in finance.
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Building Trust Through Quality
David Smith, Director of Quality & Professional Standards, Kreston Global
Quality and integrity are two core principles that apply across the globe when a profession is built on trust. The application of these principles, however, must continuously adapt to reflect changing stakeholder expectations, the businesses, and the world in which our professional services firms operate.
So, in a time where significant change is being driven by the introduction of emerging technologies, where there are challenges and opportunities presented by the ways we trade across borders, and in regions like the Middle East and Africa, where we have such pace of transformation and reform, we must ensure that we continuously evolve to provide high-quality, valuable services to our clients whilst our core principles are respected.
Continuous improvement in a changing world
Over the past decade, the global audit and professional services landscape has shifted dramatically and this has driven the need for a proactive approach to continuous quality management and improvement.
All Kreston Global member firms are committed to the adoption of globally recognized quality management standards (ISQM1) which help ensure a common foundation in the way we manage risk. This commitment, even in jurisdictions that do not yet require adoption, alongside local and globally coordinated quality monitoring programs, helps our firms to embed a culture of continuous improvement across our service offerings.
Clients work with firms they trust and regulators respect firms that are proactive. This understanding and commitment to quality across our member firms helps to build relationships and our businesses on solid foundations.
Being technology enabled, but people led
We understand that the way technology is implemented in a business, and the ways that associated risks are managed, have a significant impact on the quality of a business’ products or services. This creates new opportunities to work with clients in areas relating to their own use of technology, as well as driving innovation in the way we design and provide services to existing clients.
By applying the principle of being technology enabled, but people led, we ensure that the right resources are used in the right way by our teams when providing our services. This involves empowering teams to remain authentic, alongside making sure that they are enabled by the right tools and technologies, but still leading the relationships and service provision.
Enhanced regulatory drivers of change
Across the Middle East and Africa, regulatory systems are developing quickly, strengthening oversight, establishing local standard setters, and adopting international frameworks. Our firms operate in accordance with both local and international regulations, ensuring consistency in quality and independence.
For audit engagements, this includes compliance with the International Standards on Auditing, which continue to evolve based on global regulatory feedback and best practice. Recent changes to auditing standards have driven enhancements to the approach we take to conducting group audits. This leads to a greater amount of collaboration with group and subsidiary management, other group auditors and a focused approach to addressing risks of material misstatement to help continuously improve the work performed on these types of engagement.
Working with clients to help define quality
Many of the factors that change the way professional services firms work reinforce the importance of client collaboration as a critical enabler of high-quality service delivery. As regulatory environments change, continuous improvements are made, and technology adoption matures, we see that this can affect the ways this collaboration takes shape.
We are seeing, across many of our firms, that the type, nature and timing of information requests is changing. This often takes the form of more structured, and earlier, information requests than may have been the case previously which helps our teams to plan proactively, focus work and increase the value of work performed.
In many cases we see requests for entire raw datasets, to enable greater depth of work and testing, rather than a trial balance and some selected items, which reflect teams having access to tools that better enable broader testing to support a high-quality deliverable.
This has practical implications. Clients who reconcile and prepare data throughout the year, and who use systems capable of clean, consistent data export, often benefit from smooth engagements, faster delivery and greater overall value. Those who rely on manual or delayed information may find the process more complex as engagement teams need to do more to meet the necessary standards.
Doing the right thing when no one is looking
Consistent quality frameworks help to maintain confidence in our work, with genuine trust coming from acting with integrity. It is important that our teams do the right thing when no one is looking.
In this context, Kreston Global member firms commit to applying policies that adhere to a globally recognized Code of Ethics (the IESBA Code). This helps us to maintain a consistent ethical culture across jurisdictions, and for individual firms, it helps to support making the right decisions in difficult situations.
Growth must be matched by strong governance and ethical leadership. Firms that are known for independence, confidentiality, and fairness build a reputation that supports long-term success.
Collaboration as a defining factor
Few global regions illustrate the pace of change as vividly as the Middle East and Africa. Economic diversification, infrastructure investment, regulatory reform, and digital transformation are redefining how businesses operate, with governments strengthening requirements for transparency, sustainability reporting, and corporate governance.
The introduction of corporate tax, ESG disclosure, and digital reporting requirements across both regions is creating both new opportunities and new challenges and businesses are reassessing their data, systems, and controls to meet a higher standard of accuracy and accountability.
As we consider the future of how our businesses grow alongside regional and global reform, our promise is consistent to clients worldwide: to continue to build trust through quality. This process of driving quality through continuous improvement never ends, and neither does our committed to collaboration.
It is this commitment to collaboration within our businesses, across the Kreston network of firms, and with our clients, that ensures local expertise is combined with global standards. By working together, we ensure our firms can compete not only on scale, but on capability, consistency, and trust.
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DMCC: Bridging Trade, Technology and Capital
H.E. Ahmed Bin Sulayem, Executive Chairman and Chief Executive Officer, DMCC
Dubai has always traded on geography and reinvention. From pearl diving to one of the world’s leading hubs for trade and innovation, the engine has been connection – across goods, ideas, and capital.
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