The Small and Medium Enterprise Agency hereby announces that the Act to Partially Amend the Act on Promoting Small and Medium Enterprises' (SMEs') New Business Activities for Encouraging Cultivation of Overseas Demand for SME Products (SME Business Capabilities Enhancement Support Act, hereinafter called the "Act") has come into force today, which was enacted in the ordinary Diet session on June 21, 2012, and promulgated on June 27, 2012.
To strengthen the business capabilities of SMEs, the Act provides measures for: 1) designating SME support service providers for boosting SMEs' activities; and 2) facilitating financing of SMEs' overseas subsidiaries to push ahead with the SMEs' overseas business expansion.
1. Background and purposes of the Act
SMEs are facing diversified and complicated business challenges. In this context, it is urgently necessary to enhance SMEs' business capabilities by providing support projects from financial and accounting experts (such as existing SME supporters, financial institutions, tax accountants or their firms, etc.) so that SMEs will develop effective business plans in order to overcome their problems.
As domestic demand has been shrinking, SMEs are facing financing problems when they intend to expand their business operations overseas, such as difficulties in raising funds for SMEs' overseas subsidiaries. For this reason, it is urgently necessary to take measures to facilitate financing for SMEs' overseas business expansion.
2. Outline of the Act
The Act mainly includes the following measures:
1) Assisting measures for diversifying and encouraging support service providers
Through designating existing SME supporters, financial institutions, tax accountants or their firms, etc. as SME support service providers, the Act aims to realize providing SMEs with highly professional support services. In addition, the Small and Medium Enterprise Agency will assist SME support projects by cooperating through sending experts from the Organization for Small and Medium Enterprises and Regional Innovation, Japan, to SMEs and by supporting fundraising through granting credit guarantees.
Through these measures, SMEs will be expected to develop high quality business plans, leading to enhancement of their business capabilities.
2) Assisting measures for fundraising related to SMEs' overseas business expansion
The Small and Medium Enterprise Agency will take the following measures for SMEs if the SMEs are engaging in their business operations in accordance with their approved or authorized plan based on the Act on Promoting SMEs' New Business Activities:
- Expanding Japan Finance Corporation's debt guarantee program and Nippon Export and Investment Insurance's insurance program to assist SME overseas affiliate firms' fundraising from overseas local financial institutions; and
- Increasing insurance upper limits of SME credit insurance to assist SMEs' overseas business expansion through two-generation loan payment schemes.
August 30, 2012
Division in Charge
Business Support Division, Office for Small Enterprise Policy, New Business Promotion Division , Small and Medium Enterprise Agency