Incentive Programs
To facilitate investment in Japan, the government offers appealing incentives, as well as operating single contact points in relevant ministries and agencies for inquires/support regarding doing business in Japan. Local governments also offer various incentives and support exclusively for foreign-affiliated companies and foreign companies that are planning to open an office in their region.
Incentives related to investment in Japan
- Invitation for applicaions for the Subsidy Progam for promoting direct investment in Japan
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Invitation for applications for the Program for Promoting Investment in Japan to Strengthen Supply Chains (2nd round) [Japanese]
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Application period has ended.
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Invitation for applications for the Program for Promoting Investment in Japan to Strengthen Supply Chains (1st round) [Japanese]
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Application period has ended.
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Program for Promoting Investment in Japan to Strengthen Supply Chains (Excerpt of the Application Guidelines) [1st round]
(662KB)
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Overview of the Subsidy Program(181KB)
Main incentives for businesses
Local business
Tax incentives for strengthening local business facilities
For cases which satisfy the outlined requirements, "tax incentives for strengthening local business facilities" are available for companies opening or expanding headquarters functions* such as branch offices and research laboratories in local areas (with the exception of a few areas) outside of the Tokyo Metropolitan Area, through foreign direct investment, or foreign-affiliated companies relocating their headquarters function from the 23 wards of Tokyo to regions other than the Tokyo Metropolitan Area.
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Headquarters functions indicate an "office," "laboratory" or “training institute."
Prerequisites for qualifying for tax breaks
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Areas in which tax incentives area available for the establishment, expansion or relocation of headquarters are designated as those areas within each prefecture (Regional Revitalization Areas) where the establishment, expansion or relocation of headquarters are being promoted, and do not include non-target regions* for this support.
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Before beginning construction for the opening, expanding or relocating of the headquarters, companies must first create a plan for establishing, expanding or relocating the headquarters (a Regional Vitality Improvement Plan for Specific Business Facilities) and then obtain certification from the relevant prefecture.
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Non-target regions for support: in principle, large central urban areas in the Tokyo Metropolitan Area, Chubu and Kansai regions. However, since the tax reform of fiscal year 2018, central areas of the Chubu and Kansai regions have become eligible for support in the case of relocating headquarters functions from the 23 wards of Tokyo.
Please be sure to contact the prefecture where your company is considering the opening, expansion or relocation since a variety of requirements must be met in order to obtain certification from the prefecture.
| Title | In the case of establishment or expansion headquarters functions within regional revitalization areas (including foreign direct investment in Japan) | In the case of relocating headquarters functions within regional revitalization areas from the 23 wards of Tokyo | The Competent authorities |
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| Employment promotion taxation |
Tax credit of up to 600,000 JPY per new employee.
Application requirements have been eased since FY2018. See pages 2, 3 and 19 of the PDF “雇用促進計画の手続きパンフレット（平成30年度以降に適用年度が開始する場合” （booklet of procedures for application of employment promotion plan [in the case that application starts in FY2018]) , which is in the corner “利用手続きの詳細” (details of procedures for utilization) of the webpage “雇用促進税制 |
Tax credit of up to 900,000 JPY per new employee.
Application requirements have been eased since FY2018. See pages 2, 3 and 19 of the PDF “雇用促進計画の手続きパンフレット（平成30年度以降に適用年度が開始する場合” （booklet of procedures for application of employment promotion plan [in the case that application starts in FY2018]) , which is in the corner “利用手続きの詳細” (details of procedures for utilization) of the webpage “雇用促進税制 |
Office for Promotion of Overcoming Population Decline and Vitalizing Local Economy in Japan, Cabinet Office (Employment Policy Division, Employment Security Bureau, Ministry of Health, Labor and Welfare) *Japanese only |
| Capital investment tax cut (tax cut for offices) |
Target: Buildings, attached facilities and structures of specific business facilities(headquarters function) Acquisition price: 20 million yen or more (10 million yen or more for small and medium enterprises) Tax measures: 15% special depreciation or 4% tax deduction on the acquisition value of specified business facilities
See the the PDF "（パンフレット）地方拠点強化” (booklet of tax incentives for strengthening local business facilities) which is in the corner “地方拠点強化税制について” (regarding tax incentives for strengthening local business facilities) of the webpage “地方拠点強化税制 |
Target: Buildings, attached facilities and structures of specific business facilities(headquarters function) Acquisition cost: 20 million yen or more (10 million yen or more for small and medium enterprises) Tax measures: 25% special depreciation or 7% tax deduction on the acquisition value of specified business facilities
See the the PDF "（パンフレット）地方拠点強化” (booklet of tax incentives for strengthening local business facilities) which is in the corner “地方拠点強化税制について” (regarding tax incentives for strengthening local business facilities) of the webpage “地方拠点強化税制 |
Office for Promotion of Overcoming Population Decline and Vitalizing Local Economy in Japan, Cabinet Office (Regional Business Innovation Promotion Division, Regional Economic and Industrial Policy Group, Economic And Industrial Policy Bureau, Ministry of Economy, Trade and Industry) *Japanese only |
| Tax exemption or unequal taxation of local taxes | Certified companies may be able to receive exemptions or reductions on enterprise taxes on corporation (only in the case that a relocation occurs from Tokyo’s 23 wards), property acquisition taxes, and property taxes by local authorities. | Local authorities of designation of relocation, or expansion | |
Incentives regarding Special Zones
| Title | Overview | The Competent Authorities |
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National Strategic Special Zone *Japanese only |
Special regulatory measures, tax treatment (for corporate income tax), and financial/monetary support are available for companies with business plans in National Strategic Special Zones. |
Headquarters for the Regional Revitalization Cabinet Office, Governments of Japan *Japanese only |
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Comprehensive Special Zones *View "English" |
Special regulatory measures, tax credit (for corporate income tax), and fiscal/financial support are available for companies with business plans in designated zones. CSZs have two types: those for international competitiveness and those for local revitalization. CSZs aim at providing tailored, integrated support for comprehensive and strategic challenges in selected regions. |
Headquarters for the Regional Revitalization Cabinet Office, Governments of Japan *Japanese only |
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Special Zones for Reconstruction
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Special measures such as deregulation, tax incentives, etc. are available for companies with business plans in disaster afflicted areas. |
Reconstruction Agency
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Tax Deduction System based on the Regional Future Investment Promotion Act
（Regional Future Investment Promotion Taxation）
A tax deduction system for projects which create high added value in utilizing advantages of local regions and with which a ripple effect on local economies can be expected, on the condition that they are confirmed as projects which will particularly contribute to strengthening the basis of regional economic growth, in accordance with standards set by the competent minister.
- Target regions
- Target areas of the basic plan prepared by relevant prefectures and municipalities (project promotion areas) (Japanese only)
| Title | Overview | The Competent Authorities |
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Special taxation measure regarding capital investment (Japanese only) See the corner ”税制支援”(tax-based support) |
Procedure: Foreign-affiliated companies can also use this system, on the condition that they prepare a “project of business which can stimulate the local economy’’ in accordance with the basic plans prepared by the relevant prefecture and municipality, obtain the approval of the prefecture for the project and receive confirmation from the competent minister pursuant to the provision. Target: Capital investment done in accordance with an approved business plan (and requiring confirmation pursuant to article 24 of the act) Taxation measures:
Total acquisition cost subject to support: 8 billion yen Maximum amount of tax deduction: 20% of the amount of corporate or income tax in the period concerned |
Business Environment Promotion Division, Regional Economic and Industrial Policy Group, Ministry of Economy, Trade, and Industry |
| Tax exemption or unequal taxation of local taxes | Confirmed companies (requiring confirmation pursuant to article 24 of the act) may be able to receive exemptions or reductions on property acquisition taxes and property taxes by local authorities. | Local authorities |
Subsidies for new business establishment and employment creation in areas recovering from the tsunami and nuclear disaster
| Title | Subsidized Projects | Eligible Costs |
Subsidy Rates/ Maximum Amount |
The Competent Authorities | |
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Subsidy Program for New Business Establishment in the Areas Recovering from Tsunami and Nuclear Disaster towards Employment Creation [ Manufacturing business site location support project ] |
A subsidy program for establishment of new factories (manufacturing), distribution facilities, research laboratories, call centers, data centers and others, so as to activate the regional economy through employment creation in the areas within prefectures inundated by the tsunami and Tohoku Earthquake and the areas in Fukushima prefecture affected by the nuclear power station accident and where the evacuation order has been lifted. | Initial expenditure for factory/facility location covering from acquisition of land to construction of buildings and installation of production equipment |
Subsidy rates/amount varies depending on areas eligible and size of company. Up to 1/3 for large companies, 1/2 for SMEs [Maximum subsidy: 3 billion yen] * 5 billion yen for projects which are particularly highly valued by a third-party committee in municipalities affected by the tsunami |
Regional Industrial Infrastructure Division, Regional Economic and Industrial Policy Group, Ministry of Economy, Trade and Industry *Japanese |
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| Subsidy Program for Industrial Location and Job Creation to Support Independence and a Return to Recovering Areas (A project supporting the location of business sites for the manufacturing and service sectors) | This subsidy program aims to support companies that establish or expand factories to secure a “work place” and to promote industrial accumulation in areas of Fukushima Prefecture which had previously been under evacuation orders. The program is also intended to support commercial recovery to promote the return of residents and the establishment of industries. | Land acquisition cost, Land development cost, Building acquisition cost, Equipment cost | Subsidy rates/amount varies depending on areas eligible and size of company. Up to 2/3 for large companies, 3/4 for SMEs (Maximum subsidy: 3 billion yen. However, the upper limit shall be yen 5 billion for projects which are particularly highly valued by a third-party committee.) |
Regional Industrial Infrastructure Division, Regional Economic and Industrial Policy Group, Ministry of Economy, Trade and Industry *Japanese only |
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Subsidy for Business Location for Reconstruction of Industry in Fukushima *Japanese only |
Provide subsidy for location of factory (manufacturing sector), distribution facility, R&D facility, call center and others to create expansion of production capacity and sustainable creation of employment in Fukushima prefecture suffered damage in wide areas hit by Great East Japan Earthquake and Nuclear Disaster. | Initial cost of installing machinery and equipment (excluding renewal and replacement) | Rate of subsidy depends on the place of investment and the size of the enterprise making investment. Subsidy equivalent to 1/3 or less than the amount of investment is offered for big businesses, 1/2 for SMEs. [Maximum subsidy: 1billion yen] *In case the governor issues special permission, cap is raised to 3 billion yen. |
Fukushima Reconstruction Promotion Group, Ministry of Economy, Trade and Industry *Japanese only
Firm location section, Commercial and industrial Labor Relations Division, Fukushima Prefecture |
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Subsidies for Employment toward Reconstruction of Industry in Fukushima *Japanese only
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Employment costs | Subsidies for employment of disaster victims by enterprises designated by the Fukushima Prefectural Government as recipients of subsidies and finances provided by the national government or local governments. | Expenses for employing disaster victims seeking employment |
Up to 1.2 million yen for three years per employee hired for SMEs within Fukushima Prefecture. Up to 2.25 million yen for three years per employee hired for companies large to small in 15 afflicted cities, towns, or villages. The cap on the employment subsidy is placed at 20 million yen for three years per enterprise. |
Section in charge of grants, Employment Administration Division, Commercial and industrial Labor Relations Department, Fukushima Prefecture
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| Costs of housing support | Subsidies for housing allowances and expenses related to company-rented houses or apartment buildings for enterprises designated by the Fukushima Prefectural Government as recipients of subsidies and finances provided by the national government or local governments that have improved the workplace environment and secured and maintained employment by introducing housing support. | Housing allowances and expenses related to company-rented houses or apartment buildings |
Subsidies will amount to 3/4 of expenses eligible for subsidization. Maximum subsidy per enterprise: 2.4 million yen per year. The cap on the subsidy is placed at 7.2 million yen for three years per enterprise. |
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Preferential tax treatment for special zone
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Special Zone for Promoting Investment in Reconstruction of Industry in Fukushima |
Companies who contribute to maintaining employment opportunities in reconstruction industry accumulation area are eligible to apply for special tax measures when they made capital investment or employed disaster victims. Specific types of industries in Fukushima industry revival investment promotion special ward are subject to this measure. For details, please refer to "Overview of special measures in the taxation system" and "List of target types of industry" in "Revival special ward. " (Japanese only)
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Industry
Incentives based on Industrial Competitiveness Enhancement Act
| Title | Overview | The Competent Authorities |
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System to Remove the Gray Zone Areas *View "Industrial Competitiveness Enhancement Act (2014 May Issue) Page 8" |
As for new business fields, it is often unclear for enterprises whether the existing laws and regulations will be applied to their new businesses. On such occasions, a system to remove gray zone areas will be useful. In this system, the competent ministry for the business confirms whether the matter is regulated or not to the competent ministry of the regulation on behalf of the company. The period from application to response is within one month in general. |
Startup and New Business Promotion Office, Industry Creation Policy Division, Economic and Industrial Policy Bureau, Ministry of Economy, Trade and Industry
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System of Special Arrangements for Corporate Field Tests *View "Industrial Competitiveness Enhancement Act (2014 May Issue) Page 9" |
Preferential regulatory flexibility to individual enterprises will be allowed as a special provision. What is different from conventional deregulation is that special arrangements can be applied to individual companies if safety and other requirements are satisfied. |
Environment and energy
| Title | Overview | The Competent Authorities |
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Green Innovation Fund
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Toward the goal of achieving Carbon Neutrality by 2050, the government has established a 2 trillion yen “Green Innovation Fund” under the FY2020 Tertiary Supplementary Budget and decided to assign the New Energy and Industrial Technology Development Organization (NEDO) to its operation. Among the priority fields for which implementation plans have been formulated within the Green Growth Strategy, where policy effects are significant, and long-term continuous support is required to realize social implementation, the government will provide continuous support to companies and other organizations committed to take on challenges toward achieving specific goals from R&D through demonstration to social implementation for the next 10 years. Summary  (447KB)Green Innovation Fund Project (Japanese only)
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Environmental Policy Division, Industrial Science and Technology Policy and Environment Bureau, Ministry of Economy, Trade and Industry New Energy and Industrial Technology Development Organization (NEDO)
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Research and Development
Tax incentives for Research and Development (R&D Tax Credit System)
| Title | Overview | The Competent Authorities |
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| Tax Deduction System for Research and Development (R&D Tax Credit System) |
(Please refer to “Outline of the R&D Tax Credit System
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Innovation and Industry-University Collaboration Division, Industrial Science and Technology Policy and Environment Bureau,Ministry of Economy, Trade and Industry
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Promotion of Open Innovation
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Tax credit for the total amount of expenses for joint or contract research with universities, national research institutes, etc. * For joint or contract research with universities and national research institutes, etc.= 30% * For other cases (joint research between companies, etc.) = 20%
*View “Outline of the R&D tax Credit System” under “Tax Deduction System for Research and Development (R&D Tax Credit System) |
Innovation and Industry-University Collaboration Division, Industrial Science and Technology Policy and Environment Bureau, Ministry of Economy, Trade and Industry
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Productivity improvement
Incentives based on the Act on Special Measures for Productivity Improvement
| Title | Overview | The Competent Authorities |
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Regulatory Sandbox in Japan
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The Regulatory Sandbox framework in Japan enables speedy verification and data collection that can lead to regulatory reforms through establishment of an environment where new technologies and business models can be demonstrated, under certain conditions, such as limited participants or duration, without adhering to existing regulations. |
GoJ's Regulatory Sandbox Team (in liaison with the Cabinet Office), within the Japan Economic Revitalization Bureau of the Cabinet Secretariat
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Connected Industries Tax system (IoT Tax system) * Japanese only *Application period has ended |
Tax measures supporting introduction of systems, sensors, robots and so on necessary in efforts to boost productivity, through collaboration and utilization of data, and for which certain cybersecurity measures are taken Target equipment: Software, apparatuses, equipment, machinery and devices Tax measures: 30% special depreciation or 3% tax deduction. The tax credit rate is 5% in the case of a wage increases in which the rate of increased pay and allowance for employees is over 3% from the previous year. |
IT Innovation Division, Commerce and Information Policy Bureau, Ministry of Economy, Trade and Industry * Japanese only |
Tax incentive for wage and productivity improvement
| Title | Overview | Subsidy Rates/ Maximum Amount | The Competent Authorities |
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Tax deduction system for wage and productivity improvement (for large companies) *Japanese only |
Tax incentives through which a part of an increase in pay and allowance by large companies raised wages can be deducted from their corporate tax (national tax) of the relevant fiscal year. Applies to the fiscal years which start from April 1, 2018 to March 31, 2021. |
Condition: Pay and allowance (including for workers employed for a continuous period) increases by 3% or more from the previous fiscal year, and domestic capital investment equals at least 90% of total depreciation for the relevant term. Tax measures: Deduction of 15% of the amount of the increase in pay and allowance from the previous fiscal year. If the cost of education and training increases by 20% or more from the average of the past two years, deduction of 20% (an addition of 5% to the deduction rate) of the amount of the increase in pay and allowance from the previous fiscal year. Maximum amount of tax deduction：20% of the amount of corporation tax |
Human Resources Policy Office, Economic and Industrial Policy Bureau, Ministry of Economy, Trade and Industry *Japanese only |
Foreign Professionals
Incentives for Highly Skilled Foreign Professionals from foreign countries: Incentive measures for foreign nationals concerning startups
| Title | Overview | Incentives | The Competent Authorities |
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Points-based preferential immigration treatment for highly skilled foreign professionals
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Under the points-based system, foreign professionals who earn 70 points or more will be recognized as "highly skilled foreign professionals" and will be given preferential immigration treatment. Japanese Green Card for Highly Skilled Foreign Professionals. |
Foreign nationals are allowed to apply to the permission of permanent residence only after one-year residence in Japan if their score is 80 points or more in the point-based system for highly-skilled foreign professionals, or after three-year residence in Japan if their sore is 70 points or more.
Expansion of preferential immigration treatment for HSPs in asset management businesses |
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| Resident status based on “Foreign Entrepreneurship Activity Promotion Program” for National Strategic Special Zones |
Foreign nationals attempting to start a business in Japan need to obtain a “business manager” visa. (Acquisition requirement: securing of an office and investment of five million yen or more or employment of two or more full-time employees, etc.). Under the special measures of the Immigration Control Law regarding National Strategic Special Zones, even if the above requirements are not fulfilled, applicants can still obtain a status of residence for six months to set up business, under supervision by the implementing organization (local government) of the project |
Procedures: Foreign entrepreneurs are required to submit a founding activity plan etc. to the implementing organization (local government) of the project and obtain confirmation. Target area: Special zones implementing the program. Implementing body: Tokyo Metropolitan Government , Kanagawa Prefecture , Kyoto Prefecture , Hyogo Prefecture, Niigata city,Fukuoka city , Kitakyushu city , Sendai city , Aichi prefecture , Hiroshima prefecture , Imabari cityResident status: “business manager”visa (startup activities) Period of stay: Six months (To stay after this period, applicants must obtain the “business manager” visa status of residence after fulfilling the requirements.) |
Headquarters for the Regional Revitalization Cabinet Office, Governments of Japan |
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Resident status (so-called “start-up visa”) based on “Projects for Encouraging Foreign Entrepreneurs to Start Business ”
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Foreign nationals attempting to start business in Japan need to obtain a “business manager” visa. (Acquisition requirement: securing of an office and investment of five million yen or more or employment of two or more full-time employees, etc.). Under the special measures based on the “Public Notice Related to Projects for Encouraging Foreign Entrepreneurs to Start Business ” （in Japanese only）, even if the above requirements are not fulfilled, applicants can still acquire a resident status for up to one year for an preparatory entrepreneurial activities, under the supervision of the implementing organization (local government) of the project.
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Procedures: Foreign entrepreneurs are required to submit an activity plan of preparatory entrepreneurial activities to the implementing organization (local government) of the project and obtain approval.
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Startup and New Business Promotion Office, Industry Creation Policy Division, Economic and Industrial Policy Bureau, Ministry of Economy, Trade and Industry |
