Investment Incentives in Japan
Incentives or guarantees
- Forms of Aid
The Japanese government’s program for promoting imports and investment takes the form of discounts and reductions of taxes, guarantees on loans, and loans at reduced rates.
It also takes the form of assistance for foreign exporters wishing to import into Japan.
- Privileged Domains
- Creation of jobs, national and regional development, protection of the environment, Aid for research and development, poll of competitiveness.
- Privileged geographical sectors
Since applications for special zones for structural reform began being accepted in April 2003, a total of 910 zones have been established throughout Japan, each with its own distinctive character. Established at the initiative of local governments or private businesses, they are exempt from one or more national regulations. In practice, the acceptance of the projects raises some difficulties, but in theory, this measure offers foreign investors attractive terms for setting up. The Cabinet Office summarizes this policy.
Current efforts concerning the decentralization of public finances should soon allow local governments to use the fiscal tool to draw FDI to their areas.
Click here for a more detailed breakdown of investment conditions region by region.
- Privileged Geographical Zones
Japan no longer has free zones or free ports. Nevertheless, the government wants to facilitate access to the Japanese market through access Zones for imported products located near ports and airports.
Japan’s objective is to develop 22 zones like these with infrastructures designed to facilitate imports and loans at preferential rates and tax reductions.
- Country Risk
Tax incentives offered to foreign investors
- Special tax treatments
- Corporate tax credits of 7% of the acquisition cost are available in Japan on designated energy efficient machinery and equipment acquired by small to medium sized companies (the total credit available is limited to 20% of the corporate tax). For more information on tax incentives you can consult the Japan External Trade Organization (JETRO).
- Useful Links
Japan External Trade Organization, JETRO
Invest Japan Business Support Centers (IBSC)
Kansai Council of Investment Promotion
Japan Invest Council
Entry Point Tokyo Business
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