## iv) Hosting Overseas Personnel

• Some projects such as plant constructions may require hundreds of workers. As it will be impossible to secure such a large number of workers in Japan, the country should introduce a system which offers greater flexibility in receiving overseas personal so that companies can employ overseas workers for a fixed time, on the premise that such workers leave Japan upon completion of relevant projects.

- When personnel with expertise are dispatched from a home country to Japan, it is likely that their spouse also has a profession. In that case, if the spouse is not able to work in Japan, he or she may decide not to take the position in Japan as the spouse may not find a suitable job in Japan, preventing the couple from coming to Japan together. In order to prevent such a problem, along with the residence status for intra-company transferees, Japan should allow their spouses to easily obtain a residence status that permits employment.

## v) Others

- The Japanese labor law system does not correspond fully to various working styles such as telecommuting or working flexible hours. It should promote diversity in working styles in order to increase the fluidity of those with potential capacity.

- In terms of the issue of shortfalls in human resources and facilities for childcare or nursing care, Japan should improve flexibility regarding the employment of human resources for household labor or nursing care support to increase the employment ratio of women.

## 3 ) Corporate Governance

With regards to the corporate governance, concrete recommendations from foreign companies and others are as follows. It has been pointed out that if such changes are brought about, corporate governance in Japan will be equivalent to that in major countries' economy and the trust from investors vis-à-vis the Japanese market will improve.

- At least one third of directors should be independent outside board members. And also, it should be clarified which board members are such independent outside board members.

- The Companies Act should define “independent outside board member” so that Japan’s independent outside board member system follows the global best practices.

- The corporate policy regarding the training of board members should be disclosed.

## 4 ) Corporate Merger System

With regard to the system for corporate mergers, it has been improved through a reform in 2007, which allowed forward triangular mergers. However, it has been pointed out that the system will be all the easier to utilize if further improvements are made on the following points.

- In a forward triangular merger, when shareholders of the resolving company receive shares of the parent corporation of the continuing company, if the continuing company has not been engaged in business in Japan, capital gains arisen from such shares will be taxed. Deferred tax charges should be allowed for such taxation.

## 5 ) International Harmonization of Various Regulations and Administrative Procedures

Many of the regulations in Japan are stricter than those in foreign countries. In addition, administrative procedures are complicated. There were comments that Japan should