Measures to Encourage Company Location in Japan:Measures Connected with Attracting Foreign

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Measures Connected with Attracting ForeignCompanies

The “New Growth Strategy” approved by the Cabinet on June 18, 2010 has astated objective of doubling (over the next ten years) the flow of people,goods and money to Japan.

Among the national strategy projects set out to achieve this objective areAmong the national strategy projects set out to achieve this objective are“lower effective tax rate on companies”, “promotion of Japan as a hub forAsian operations”, and “comprehensive global strategic special zones”.

Determined in the “Fiscal Year 2011 General Outline for Tax Reform” (December 16, 2010): (1) Lowering of the corporate tax rate by 5 percentage points; and (2) taxable income deductions of 20% on companies authorized as Asian headquarters and companies engaging in businesses in the global strategic special zones.

Utilizing the Fiscal Year 2010 supplementary budget (passed through the Diet on November 26, 2010), the subsidy system was established for encouraging foreign companies to set up operations (high value-added business sites) in Japan.

This presentation is a compilation of measures connected with the location offoreign companies in Japan (direct investment in Japan) based on thewebsites of relevant ministries/agencies and other publicly availableinformation. Please bear in mind that these measures are subject to change

lt f f t Di t d lib ti tDecember, 2010JETRO In est Japan Di isionas a result of future Diet deliberations, etc. JETRO Invest Japan Division

p yNew Growth Strategy: Measures to PromoteCompany Location

Carrying out reforms in Japan to unify the Asian market; doubling the flow of people, goods andmoney between Japan and the rest of the world June 18, 2010 Cabinet decision

Prepared by JETRO Invest Japan Division basedon Cabinet decisions, etc.

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As far as possible, Japan must eliminate barriers to the flow of people, goods and money with Asia as well as with the rest of the world.Japan will actively undertake prioritized domestic reforms – e.g., boldly reviewing regulations that constitute hindrances to this flow – with the goal ofdoubling the flow of people, goods and money to Japan.

Lower corporate taxes FY2011Details: page 3

Objectives: enhancing the competitiveness of companies locating in Japan and encouraging foreigncompanies to set up operations in Japan.Decision of 5% reduction in “Fiscal Year 2011 General Outline for Tax Reform.”

Lower corporate taxes

Comprehensive global strategic Domestic Investment Promotion P

FY2011

FY2011

November 2010【No distinction between foreign and domestic

Details: page 3

Details: page 10

Details: pages 11-14

For Japanco

Promoting the agglomeration of industries, foreign companies, etc., to serve as an engine for Japan’seconomic growth.Special regulatory measures; tax, fiscal and financial assistance measures. In “Fiscal Year 2011 GeneralOutline for Tax Reform,” implementation of measures for special depreciation, tax credits or taxableincome deductions.

pspecial zonesA “Domestic Investment PromotionRoundtable Conference” featuringparticipation by various industriesand labor organizations will beorganized.Measures for promoting the

ProgramFY2011domestic companies】

Details: page 10

nese and foreigom

panies Assisting “green industries” to establish factories within Japan and providing subsidies for locating(subsidy rate of 1/3 [1/2 for small companies]).Utilizing the FY2009 supplementary budget and FY2010 reserve funds for subsidies (subsidy ceiling: 15billion yen per company); the Ministry of Economy Trade and Industry requested the needed budget

j gPromotion of location by low-carbon job-creating industries

Measures for promoting theestablishment of business locationsin Japan to be carried out over thenext six months to one year wasconsideredCompiled on November 29, 2010

FY2009Details: pages 7-9

gn  billion yen per company); the Ministry of Economy, Trade and Industry requested the needed budgetfunds for FY2011.

Objectives: facilitating business by companies, as well as promoting direct investment in Japan fromoverseas

p pEstablishment of administrative procedures contact points

Program to Promote Japan as an Asian Business Hub and Encourage Direct Investment in Japan

FY2010

Summer 2011

For Focom

p

Consideration will be given to, and a conclusion reached on, consolidating contact points for national andlocal administrative procedures (creation of ‘one-stop’ contacts) and establishing contacts capable ofhandling matters in English; measures will be promptly carried out thereafter.

gPromotion of Japan as a hub for Asian operations and of the establishment of high added-value business locations

This program is designed to smooththe flow of people, goods and moneyto make Japan’s businessenvironment more appealing.A “Program to Promote Japan as anAsian Business Hub and Encourage

Japan

Details: pages 4-6 FY2010

oreign anies

Assisting the location from overseas of high added-value business sites. Providing strong incentives toselected companies on par with those offered by other countries. Implementation of location subsidies,taxable income deductions (20%), and other measures.Location subsidies to be implemented in FY2010 supplementary budget (¥2 billion). The Ministry ofEconomy, Trade and Industry requested the needed budget funds for FY2011.

Direct Investment in Japan” (tentativename) incorporating systemic reformsto those ends will be drafted aroundthe end of 2010.

Corporate Effective Tax Rate Deduction of 5 Percentage Points (Corporate tax, corporate residents’ tax)

As the first step in lowering Japan’s corporate effective tax rate (now excessively high from an international perspective)

3Prepared by JETRO Invest Japan Division based upon “Fiscal Year 2011 General Outline for Tax Reform” (reference materials), Ministry of Economy, Trade and Industry (December 2010)

As the first step in lowering Japan s corporate effective tax rate (now excessively high from an international perspective) to a level commensurate with other major nations in order to open up Japan and establish investment and business environments on a global standard, the said corporate effective tax rate will be reduced by 5 percentage points. This measure will curb the overseas exodus of core manufacturing bases and R&D bases, promote direct domestic investment and pave the way for Japan to emerge from deflation and create domestic employment.

Reform Outline [Present Status]

Corporate tax rate 30%Corporate effective tax rate 40.7%(including 2 local corporate taxes)

[After Reforms]Corporate tax rate 25.5%Corporate effective tax rate 35.6%(including 2 local corporate taxes)

○ International levels of nominal effective tax rates have moved to the 25~30% level over the past 10 years.

C t t t (*1) 2000 2009Corporate tax rate(*1) 2000 2009

EU Approx. 35% Approx. 27%

OECD Approx. 34% Approx. 26%

Asia Approx 28% Approx 25%

○Move to further lower corporate taxes in recent yearsSingapore ：18%→17% (2010~)

Asia Approx. 28% Approx. 25%

Japan 42% 40.7%

Singapore ：18% 17% (2010 )Taiwan ：20%→18% (2008~) →17% (2010~)Hong Kong ：17.5%→16.5% (2008~)South Korea ：27.5%→24.2% (2009~)China ：33%→25% (2008~)UK ：28%→24% (2011~)(*2)UK ：28%→24% (2011~)(*2)Germany ：38.7%→29.8% (2008~)

(Notes)*1 EU (15 countries as of 1998), OECD and Asia are simple averages. For Switzerland, the January 2008 tax rate is used.*2 To be lowered by 1 percentage point each year from 2011 to 2014.

Subsidies for Project to Promote the Sitting of High-Value-Added Facilities and PromoteJapan as an Asian Business Hub

Project Overview/Purpose Asian headquarters (image)

Prepared by JETRO Invest Japan Division based on “List ofProjects Especially Promising for a Healthy Recovery by Japan”(Ministry of Economy, Trade and Industry, September 28, 2010)

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Project Overview/Purpose

To maintain and bolster high-value-added facilities in Japan and ensure sustained growth for the Japanese economy, this project will support the establishment of high added-value facilities in Japan by foreign companies which are deemed to have a particularly large impact on the Japanese

Asian headquarters (image)

Concept

Deploying skilled personnel, including managerial personnel at global companies, and making business decisions for the Asia region with regard to marketing, corporate planning sales distributionp y g p p

economy, and to strategically and actively attract/accumulate high-value-added functions suited to Japan’s strengths.

Project Image

corporate planning, sales, distribution, manufacturing, R&D and other functions

Resulting benefits

Management decisions on manufacturing/distribution collaboration, etc., that benefit Japan will be made by attracting personnel in charge of high-level business

【Targets】Making Japan a regional headquarters for Asia that brings together

skilled human resources (experts in business management, technology, etc.) essential to global society/economy.Establishing R&D bases, including commercialization functions

grounded in manufacturing capabilities

Resulting benefits assessments.

The level of Japanese personnel working at these global companies will be improved (globalization of Japanese personnel).

Strategictalks

o grounded in manufacturing capabilities.

Screening by national governmentDecision on support, taking into account economic benefits, etc., for

Application R&D bases (image)

Utilizing innovative technology and skilled personnel (engineers, researchers) to carry out active R&D

oninvestm

entp pp , g , ,Japan.

Initial investment support under this subsidy project

Concept

out active R&D

Developing highly innovative technology and products for the global market through joint research and collaboration with Japanese universities, small and medium-sized enterprises, etc.

promotion

pp y p jBold incentives for selected companies on par with those offered by

other countries

Anticipated benefits

Resulting benefits

Engineers, researchers and other expert personnel will be brought, resulting in innovation promotion in Japan.

Employment will be created for highly skilled personnel in Japan

・Global business expansion based in Japan・Accumulation of high-value-added functions in Japan・Attraction of skilled foreign personnel・Job creation in Japan

Resulting benefits personnel in Japan.

Innovative technology will be developed through fusion with technology belonging to universities, small and medium-sized enterprises, etc.

Establishment of “Tax System to Promote Japan as an Asian Business Hub”

(Income tax, corporate tax, individual residents’ tax, corporate residents’ tax, enterprise tax)

In order to encourage global companies to locate their R&D bases and regional headquarters in Japan, a bold

5Prepared by JETRO Invest Japan Division based upon “Fiscal Year 2011 General Outline for Tax Reform” (reference materials), Ministry of Economy, Trade and Industry (December 2010)

g g p g q p ,preferential tax treatment system comparable with those in Asian countries will be established under a company approval format or other framework.

[Approval Period] 3 years (through end of FY2013)Reform Outline

In order to promote the locating in Japan of R&D bases and regional headquarters by global companies, bold preferential tax treatment measures will be devised on the premise of company approval based on a system of promoting Japan as an Asian business hub. (1) With regard to global company R&D bases and regional headquarters, when satisfying the terms pertaining to

creating employment or expanding investment, a 20% taxable income reduction will be permitted for a period of 5 g p y p g , p pyears from the point of approval. →Together with reduction of the corporate effective tax rate, the tax rate for approved companies will be lowered to 28.5%

(2) Establishment of preferential measures to impose capital gains taxes(20%) on all profits from stock options paid to directors and other personnel of approved companies by the overseas parent corporations.

Target

Regional headquarters pooling management personnel and other resources indispensable for a global economic society.

R&D bases pooling advanced researchers and other personnel indispensable for innovation.

Basic Policy

Approval ofApproval of business plan

Attraction Incentives Tax system measure (reduced corporate tax burden personal income tax exceptions)Attraction Incentives Tax system measure (reduced corporate tax burden, personal income tax exceptions)Reduced taxes on R&D base patent fees, etc.

Gl b l b i d l b d i J i d i lAnticipated Effects Global business development based in Japan, generating domestic employment. Location of high value-added business operations in Japan.Attraction of advanced level overseas personnel to Japan.

(Reference) Promoting Japan as an Asian Business Hub

Summary

6Prepared by JETRO Invest Japan Division based upon “Fiscal Year 2011 General Outline for Tax Reform” (reference materials), Ministry of Economy, Trade and Industry (December 2010)

○ Against the backdrop of the declining competitiveness of Japan as a business location, in order to encourage global companies to locate their R&D centers and regional headquarters in Japan, exceptions to taxation and patent fees and other support measures will be devised for authorized companies.

Measures

1. Target Business ActivitiesR&D and other international headquarters operations by global companies establishing new corporations in Japan*.* Operations pertaining to policy determination, etc. of two

Primary Conditions for Company Approval<Re: Attracting Global Companies>

Companies newly established as group firms of overseas companies advancing global development

Measures

or more subsidiaries.

2. Plan ApprovalGlobal companies intending to locate R&D or international headquarters operations in Japan prepare and submit business plans

companies advancing global development.

<Re: High Added-Value Business Base Not-Existing in Japan>Companies engaged exclusively in R&D or headquarters operations.Secure employment at a set level or above during the planbusiness plans.

When the said plans are viewed as being appropriate in light of the basic policies and other details, it will be possible to receive approval from the state minister in charge.

3 S t M

Secure employment at a set level or above during the plan period<R&D> Maintain employment for 10 persons or more during the plan period and additional hiring of 15 persons or more by the end of the term. <Headquarters> Maintain employment for 10 persons or more

3. Support MeasuresThe following support measures will be devised for approved companies.- Tax system measures (reduced corporate tax burden,

exceptions to personal income tax)- Reduction or exemption of R&D base patent fees, etc.

during the plan period and additional hiring of 8 persons or more by the end of the term.<When hiring non-Japanese> All members must be high-level human resources.Investment at a set level or more during the plan period<R&D> A l R&D di f 100 illip p ,

Note: In addition to the above, as measures on the administrative front, streamlining of visa inspection examinations for non-Japanese personnel scheduled to work at approved companies (reduction to about 10 days of examinations normally requiring one month)

<R&D> Annual R&D spending of 100 million yen or more.<Headquarters> Capitalization of 100 million yen or more, with additional investment in domestic group companies totaling 500 million yen or more by the end of the plan term.

days of examinations normally requiring one month).

Encouraging innovative low-carbon technology-intensive industries to locate in Japan

Project overview/objectives

Prepared by JETRO Invest Japan Division based on “List ofProjects Especially Promising for a Healthy Recovery by Japan”(Ministry of Economy, Trade and Industry, September 28, 2010)

Project image

7FY2011 Ministry of Economy, Trade and Industry budget request

Project overview/objectives

Establishing Japan as a core base for generating future green innovation for the world by actively assisting the location in Japan of innovative low-carbon technology-intensive industries involved with lithium-ion batteries,

Project image

Innovative low-carbon technology-intensive industries involved withlithium-ion batteries, LED lighting, etc. (product and part manufacturersfor batteries, LEDs, etc.)carbon technology intensive industries involved with lithium ion batteries,

LED lighting, etc. for which Japan boasts cutting-edge technological capabilities.In addition to creating employment through green innovation by establishing in Japan the foundations for innovative low-carbon technology-intensive industries expected to enjoy significant growth in future, efforts will be made to realize the “New Growth Strategy” through such means as

[Approval requirements (proposed)]

Product effective in reducing Investments in Japan satisfying certain requirements are

creating demand for the small companies supporting these industries. CO2 emissionsLocation would create a certain

minimum number of jobs, etc.

approved by Minister (screening done by third-party committee)

Conditions (eligible parties, eligible actions, subsidies, etc.)

Subsidies

Subsidies for investment in facilities in Japan (small companies: 1/2,mid-sized and large companies: 1/3)

Specific example of assistance project

Nationalgovernment

Private companies

Subsidies

1/2 or 1/3 subsidies Umicore Japan

【FY2009 supplementary budget 】

Investment: approx. 3.9 billion yenInvestment location: Kobe, Hyogo PrefectureJobs created: approx. 200Business profile: Headquartered in Belgium, this company is theworld’s second largest producer of positive electrode material for

p

Open solicitation utilizing FY2010 reserve funds world s second largest producer of positive-electrode material forlithium-ion batteries. Previously it produced material in a South Koreanfactory for export to Japan, but it has now set up its production site inJapan. It also has plans to establish an R&D base in Kobe.

Open solicitation utilizing FY2010 reserve fundsSolicitation period: Sep 30 - Nov 18, 2010Subsidy ceiling: 15 billion yen per companySee next page for overview of solicitation

Incentives and Subsidy for Enterprise Generating Low Carbon for Creating Employment

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Generating Low Carbon for Creating Employment

Generating Low Carbon for Creating EmploymentOpen Application(Present-November 18 (Noon) 2010)【Subsidy Targets】*For details, please refer to the next page

SubsidyTitle

Subsidy Target EnterpriseCap AmountPer companyCategory of Subsidy

Target ExpensesNature

( ) fEmploymentGeneratingLow CarbonEnterprise andRegionalD l t

(1) EquipmentCosts etc.

Expenses necessary forthe purchasing and fittingof installed mechanicalequipment used in thesubsidized business

t ’ d ti

15,000,000,000yen（US$180M）

DevelopmentSubsidy

operator’s productionfacilities Total Subsidy

Amount:110,000,000,000yen（US$1 3B）

(2) Researchand Planning Costs

Research expenses andplanning costs necessaryf th fitti t f th （US$1.3B）

※ ¥85/US$

for the fitting, etc., of theabove installedmechanical equipment

Fiscal Year 2010: Regional Development Subsidy for Enterprise Creating Employment and Generating Low Carbon ---Major Conditions for Application---

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(1) Subsidy Target Business OperationsBusiness operations coming under all of the following categories:1. Business operations manufacturing products using low-carbon techniques, or their constituent parts in the Green tech/ Clean

tech industries for high future growthtech industries for high future growth2. Business operations manufacturing products or parts in industries that face severe economic environments due to current

deteriorating economic conditions.3. Business operations which create stable and lasting high numbers of employment.

(2) Subsidy Target RequirementsAll of the following requirements must be met:1. The subsidy target must be in a technological field set out in the Cool Earth - Innovative Energy Technology Program (March

2008, Ministry of Economy, Trade and Industry) or the Low Carbon Technology Plan (May 2008, Council for Science and Technology Policy)or technological field set out in “Environment and energy problem solving industry” （June 2010, Ministry ofTechnology Policy)or technological field set out in Environment and energy problem solving industry （June 2010, Ministry of Economy, Trade and Industry）of “The Industrial Structure Vision 2010”.

* Eco-car and related parts/devices/equipments, lithium-ion rechargeable battery, LED, etc.

2. The subsidy target areas must have increase in domestic market size of 20% or over in last 1 year (from fiscal year 2009 and fiscal year 2010)fiscal year 2010).

3. Production value of industries that fit into the Green tech/ Clean tech industries that have not recovered to the level prior to the world economic crisis (second quarter(April to June) of fiscal year 2010 of industrial output index)and currently is on declining trend(industrial output index of July 2010 is declining comparing to that of March 2010).

4. For each 100,000,000 yen of subsidy target expenses, an increase of 6 employees or more per year * must be generated.[*condition: minimum period of 4 years(1.5 employees or more ×4years), maximum period of 10 years (0.6 employees or more ×10years)]

5. Investment plans for said subsidized enterprises must not have been externally announced before the cabinet decision on emergency economic measures of September 10, 2010.

Progress Schedule

G t b d t bill2010

<Comprehensive Special Zones> 10

Fiscal 2011 General Outline for Tax Reform(December 16, 2010)

Comprehensive Global Strategic Special Zones (Corporate Tax)

Prepared by JETRO Invest Japan Division based upon “Comprehensive Special Zones,” Cabinet Secretariat Regional Reactivation Bureau, etc. (December 2010)

Implemented as comprehensive policy package of regulation preferential measures, tax system, fiscal and financial support measures, etc.

Comprehensive Global Strategic Special Zones

Pioneering approaches to cultivate industries and functions serving as engines for Japan’s economic growth

Attracting Foreign Companies

Government budget bill, decision on General

Outline for Tax Reform December

E d

2011

(Corporate Tax)

○ Investment tax credits or special depreciation

Establishment of system enabling special depreciation or tax credits when acquiring machinery, buildings, etc. in comprehensive special zones for supply for use in businesses corresponding to the strategies in the said

--- Selective application of following measures ---

gCareful selection of regions End

January -February

Submit bill to Diet

Passage of bill and budget

p g gspecial zones, and actually supplying those items for use in the businesses.

- Special depreciation ratio: 50% of acquisition price (25% for buildings, etc.)

- Tax credit ratio: 15% of acquisition price (8% for buildings, etc.)

- Credit surplus carryover limit: 1 year- Deadline to designate business and acquire equipment

EnvironmentNext-Generation Energy

Agriculture International DistributionInternational Bases

Bio Life Sciences MarchPassage of bill and budget

(assumption)

April Determination and

announcement of basic

- Deadline to designate business and acquire equipment, etc.: March 31, 2014

○ Income deductions

Establishment of system exclusively for companies conducting businesses, etc. receiving preferential measures for regulations applied at comprehensive special zones, enabling taxable income deductions of

R&D International Ports Conventions

Comprehensive Special Zones for Regional Revitalization

ppolicies

Solicitation of comprehensive special zone

proposals

20% of the income generated by the said businesses.

- Application period: 5 years from date of business designation

- Deadline for business designation: March 31, 2014.- Number of comprehensive global strategic special zone

designations to be strictly limited to a small number.- Local public entities also to conduct measures aimed at

reducing economic burdens of parties implementingMay

g

Pioneering regional revitalization visions maximizing use of regional resources Resolving regional problems

p p reducing economic burdens of parties implementing businesses (reduced local taxes, granting of subsidies, etc.).

Fiscal preferential measures in comprehensive special zones

--- FY2011 budget (proposal)/establishment of comprehensive special zone system ---

To support realization of plans concerning comprehensive

Examinations by comprehensive special zone

working groupJune

Environment Tourism & Culture

Agriculture and agriculture bi d ith d t

Designation of comprehensive special zones

To support realization of plans concerning comprehensive special zones based upon regional strategies and proposals, in cases when shortages remain even after high-priority use of the budgeting systems of individual ministries, creation of comprehensive special zone promotion coordinating costs to be flexibly supplemented until responses under individual ministry budget systems become possible. 15.1 billion yenEstablishment of comprehensive special zone support interest subsidies to support private sector businesses based upon plans concerning comprehensive special zones

July

Organizing of comprehensive special zone promotion

headquartersNext-Generation Energy

Education & Childcare

Finance & Social Business

Medical Care, Nursing Care, Health

Distribution & Transportation Biomass

combined with product processing and distribution

special zones

Establish “deliberation forum” by government and project promoters for advancing discussions.Development of comprehensive special zone utilizing preferential measures and support measures

based upon plans concerning comprehensive special zones. 150 million yen

August -

Inward Investment Promotion Program (Excerpt)

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( p )December 2010

Invest Japan Department, JETRO

This material is an excerpt of the part concerning the attraction of foreign companies of the “InwardInvestment Promotion Program” that was formulated on November 29, 2010.

Press Release of the Ministry of Economy, Trade and IndustryNovember 29, 2010

Overview of the “Inward Investment Promotion Program”

The Inward Investment Promotion Round-Table Council (Chair: Minister of Economy, Trade and Industry) under the direction fromPrime Minister Naoto Kan, has today issued the “Inward Investment Promotion Program”.

1. Prime Minister Naoto Kan directed the Minister of Economy, Trade and Industry this August to compile measures for promoting thedomestic location of plants and offices that would result in highly efficient employment creation as an “Inward Investment PromotionProgram”, for the purpose of promoting inward investment and creating new employment.

2. To address this direction, the “Inward Investment Promotion Round-Table Council” where the industrial and labor sectors participate2. To address this direction, the Inward Investment Promotion Round Table Council where the industrial and labor sectors participatewas established under the Key Government Panel on New Growth Strategies, to clarify the roles of the government and the privatesector so that they can play their own roles cooperating with each other. Measures to be jointly taken by the government and theprivate sector for six to twelve months’ time have been considered at the council. In addition, the overview of the program wasdiscussed at the Key Government Panel on New Growth Strategies held on November 25.

3. In response of these situations, we have compiled and released the “Inward Investment Promotion Program” putting forward theissues of the government and the private sector at the fourth Inward Investment Promotion Round-Table Council held today.

Challenges for the national and local governments 12

Provide full support for efforts by industry and labor, and powerfully Strive to expedite factory location

National government efforts Local government efforts

1. Build an open, global standard 2. Enhance Japan’s capacity 3 Spur SMEs on

Key challenges

promote “pro-growth” policies that foster corporate investments and business operations in Japan

procedures by providing one-stop services

p , ginvestment/business environment

p p yas a business center 3. Spur SMEs on

Make Japan an “open country” that provides a global standard business environment and attracts companies and people from around the world, in order to encourage Japanese and foreign companies to invest in Japan.

Powerfully promote efforts to allow Japan to play the central role in two growth-driving areas

Increase the competitiveness of SMEs and leading medium-sized companies--a source of employment and the foundation for// re

- Lower the effective corporate tax rate

- Promote high-level EPAs with major countries

the foundation for manufacturing (monodzukuri)- Make Japan a central base for

Asia (e.g. establish tax, immigration and other incentives to attract high value-added operations; soft support; administrative procedures in English)

- Look to lower the reduced tax rate for SMEs

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inve

stm

ent/

s in

fras

truc

tur

- Build global standard infrastructure, support human resources development, etc.- Review regulations and systems hindering investment and business activities

(establishment of regional headquarters for inward investment promotion and factory location consulting desks in individual regional blocks; promotion of the reform of factory location regulations, including the treatment of photovoltaic panel installation under the Building Standards Act and green area regulations under the Factory Location Act)

- Develop infrastructure for business operations through appropriate economic

English) tax rate for SMEs- Enhance SMEs’

manufacturing capacity- Help ventures and SMEs

secure human resources

Dl

Dev

elop

busi

ness

- Make Japan an innovation center (e.g. continuation of R&D tax incentives; support for ventures; enhancement of

t f d d R&D)- Develop infrastructure for business operations through appropriate economic management

dd ons

1. Create demand in green industries 2. Arouse regional demand 3. Make strategic foreign

investments

government-funded R&D)

dd

de

dem

and

and

ent d

estin

atio Promote strategic foreign investments that

can invigorate domestic investment, including the cultivation of foreign markets and acquisition of stakes in natural resources

Facilitate creation of new internal demand that takes advantage of Asia’s potential and contributes to regional invigoration

Foster innovation in the environment and energy sectors as Japan’s strengths

- Support domestic sitting of industries relevant to the development and production of low-

Ct

Cre

ate

inve

stm

e carbon products- Design global warming countermeasures and

revise regulations and systems in such a way that fosters corporate innovation and considers enterprise competitiveness

- Increase agricultural competitiveness and promote export of agricultural products

- Accelerate life innovation - Invigorate tourist destinations

- Public-private joint efforts to promote infrastructure systems in overseas markets

- Strive to secure rare earths and other mineral resources

Two comprehensive plans to promote inward investment

Carry out the “Comprehensive Industry Attraction Plan” Comprehensively implement Asian center development

C h iy

Comprehensive Industry Attraction Plan

C h i i l i fp p

Comprehensive implementation of an Asian center development policies

13

y p yto eliminate barriers to industry locations and investments and reduce corporate burdens

p y p ppolicies to attract Asian headquarters from overseas amid competition with neighboring countries

1. Establishment of the “Regional Headquarters for Inward Investment Promotion” (provisional name) (9 regional

1. Incentives to attract foreign companies and high-level foreign human resourcesInvestment Promotion (provisional name) (9 regional

blocks across Japan)The Headquarters will serve as a platform for information sharing for various entities, including the business community, the national government (Regional Development Bureaus, Regional Agricultural Administration Offices, METI Regional Bureaus etc ) and local governments These Headquarters will

foreign human resources(1)Develop incentives, including a preferential tax system,

subsidies for locating in Japan, and special immigration treatment, under the framework for company certification.

(2)Introduce a point program to attract excellent foreign talent to Japan. (establishment of incentive programs, revision of immigration requirements)Bureaus, etc.), and local governments. These Headquarters will

discuss improvement measures suited to the regional needs and take necessary measures.

2. Establishment of the “Factory Location Consulting Desk” (provisional name) (9 regional blocks across Japan)

“ C ” ( )

immigration requirements)

2. Creation of the best business environment in the world and a better living environment for foreigners

(1)Enhance information provision by related ministries and JETRO and identify measures needed to more widely accept English-

The “Factory Location Consulting Desks” (provisional name) will be established to provide specific advice on corporate location and investment issues.

3. Nationwide application of best practicesThe government will communicate best practices concerning

language applications in corporate location procedures.(2)Provide soft services by utilizing JETRO specialists in attracting

foreign companies and foster collaboration between the national government and local governments in attracting foreign companies.

(3)Make efforts to further facilitate trade procedures, including the g p gprograms that have successfully sped up factory location procedures, such as one-stop services, while asking local governments to cooperate in expediting factory location procedures.

4 “Pro-growth” reform of location regulations

( ) p , grevision of the principles requiring goods to be carried in the bonded area before declaration.

(4)Internationalize health care to create an environment where foreigners can receive health care with ease.

3 Formulation of the “Asian Center Development and Inward4. Pro-growth reform of location regulationsThe government will reform regulations hindering corporate location and investment from the viewpoint of “pro-growth” policy promotion, and decide specific policies under the Government Revitalization Unit.

(E l )

3. Formulation of the Asian Center Development and Inward Direct Investment Promotion Program” (provisional name) Formulate a comprehensive program to create a business environment that facilitates the medium-to long-term flow of people, goods and money (“Asian Center Development and Inward Direct Investment Promotion Program” [provisional

]) b d t(Examples)Revision of the treatment of photovoltaic panels under the Building Standards Act to promote their installationRevise green area regulations under the Factory Location Act

name]) by around next summer.

Comprehensive implementation of Asian center development policiesComprehensively implement Asian center development policies to attract Asian headquarters from overseas amid competition with neighboring countries

(2) By utilizing JETRO specialists in attracting foreign companies, thenational government and JETRO are aggressively developing thecapacity of their foreign company attraction departments, and are trying toenhance the appeal of these services, such as through the provision of a

14

Given the fact that Japan is rapidly losing its appeal as an investmentdestination with the rapid growth in the economies of emerging Asiancountries, the pressing issues for Japan to respond to are the incentives toattract foreign companies and high-level foreign human resources, and thecreation of the best business environment in the world and a better livingenvironment for foreigners. In addition, the efforts to facilitate the medium-

one-stop service on corporate location, offering opportunities to visit andinspect business locations in the field, and a matching service to findpartner companies for foreign companies that plan to invest in Japan.The national government has taken the initiative to identify prospectiveoverseas companies and seeks to attract them to local areas incollaboration with local governments. With the cooperation of the relatedi tit ti i l di JETRO th t k f i l h d t fto long-term flow of people, goods and money are to be studied.

1. Incentives to attract foreign companies and high-level foreignhuman resources

(1) Develop incentives, including a preferential tax system, subsidies forlocating in Japan, and special immigration treatment, under theframework for company certification.

institutions, including JETRO, the network of regional headquarters forinward investment promotion (provisional name) will resolve issues inrelation to the promotion of investment and corporate location fromoverseas in each region.

(3) In order to contribute to the reduction in export lead times and logisticscosts, a bill to amend the Customs Act will be submitted in the nextordinary session of the Diet for the revision of the principles requiringframework for company certification.

(2) In order to attract highly-qualified human resources from overseas toJapan, a “point program” is to be introduced in line with the U.S.,European countries, and some Asian countries. A framework that givespreferential treatment to people with a prominent career and excellentperformance among foreign nationals whose acceptance has beenapproved under the current standard is to be studied to draw

ordinary session of the Diet for the revision of the principles requiringgoods to be carried in the bonded area before declaration. Efforts towardthe further facilitation of trade procedures are being made.

(4) A survey of the actual conditions regarding the issues of housing, healthcare, and education that are essential for the daily life of foreigners will beconducted, and the results will be published in March 2011. These resultswill be fully utilized when the creation of the educational environment for

conclusions.Taking the impacts on the Japanese labor market and industrialcommunity into account, revision of the immigration requirements forforeign nationals whose acceptance was not approved under the currentstandard because they did not meet the requirements of academicbackground and business experience is to be studied through the

tili ti f th i t

will be fully utilized when the creation of the educational environment forthe acceptance of excellent foreign talent is discussed by the GovernmentRevitalization Unit to formulate conclusions in March 2011.

(5) In order to create an environment where foreigners can receive healthcare with an easy mind, the internationalization of health care is beingpromoted, such as by fostering human resources with skills in medicallanguage and improving the preparations for accepting foreign patients.

utilization of the point program.

2. Creation of the best business environment in the world and a betterliving environment for foreigners

(1) A “General Information Desk for Direct Investment in Japan (InvestJapan)” will be established as an administrative processing desk andEnglish-speaking reception point within the related ministries and

3. Efforts to facilitate the medium-to long-term flow of people, goodsand money

- Based on the formulation of the “Inward Investment Promotion Program”,a comprehensive program to create a business environment thatfacilitates the medium-to long-term flow of people, goods and money(“Asian Center Development and Inward Direct Investment Promotiong p g p p

JETRO so that Japanese and foreign companies engaged ininternational business can obtain administration-related information andoperate their business in English. Follow-up on this is to be made by theend of this fiscal year.Based on the results of this follow-up, the related ministries and JETROwill enhance the provision of various kinds of information in English and

id i f ti i th h th i b it t

( Asian Center Development and Inward Direct Investment PromotionProgram” [provisional name]) will be formulated by around next summer.A strategic overseas publicity campaign will be carried out. This willaccelerate direct investment in Japan. It is expected that foreign-affiliatedcompanies in Japan will double the number of their employmentopportunities by 2020.

- In order to respond to the need for the smooth operation of theprovide information services through their websites, etc.In addition, when approving the companies as stated in 1.-(1) above,applications in English will be accepted. The necessary measures topromote applications in English for the permission and authorizationprocedures under the regulations on corporate location are to be studied.

p pinternational business of Japanese and foreign companies under the“Asian Center Development and Inward Direct Investment PromotionProgram” (provisional name), the measures that will be required to enablethe acceptance of applications in English for the permission andauthorization procedures that are required in order to conduct business,etc., in Japan are to be studied.