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Announcement of the Achievements under the Industrial Competitiveness Enhancement Act since its Enforcement in January 2014-Regulatory reforms have continuously been applied to individual companies, leading to more than 20,000 cases receiving the tax incentive to promote capital investment-

On January 20, 2014, the Industrial Competitiveness Enhancement Act (hereinafter referred to as the “Act”) came into force, aiming to revitalize the Japanese economy and enhance its global competitiveness. As six months have passed since the enforcement of the Act, the Ministry of Economy, Trade and Industry (METI) hereby announces the achievements that were brought about by the companies that received the measures related to the Act.

1. Regulatory reform schemes that are applied to individual companies (As of June 30, 2014)

  Number of arequests (number of entities) Number of requests for which entities have been notified of results (number of entities)
System to Remove Gray Zone Areas 13 (14 entities including 5 SMEs) 9
System of Special Arrangements for Corporate Field Tests 5 (9 entities including 4 SMEs) 4

Concerning the System to Remove Gray Zone Areas, METI received 13 requests and sent 9 notices of results to the entities in reply to the applications.

As an example, it was confirmed under the System to Remove Gray Zone Areas that exercise instruction given by fitness club staff based on a doctor’s instruction/advice, practiced unaccompanied by medical judgment and skills such as teaching stretching and training methods using machines at the club, would not fall under medical practice, which is only allowed by doctors. This confirmation enabled the public to easily access highly trusted private healthcare services connected with medical services.

Concerning the System of Special Arrangements for Corporate Field Tests, METI received 5 requests and sent 4 notices of results to the entities in reply to the requests.

As an example, a special measure was established that allows entities in the logistics service sector to utilize electric-motor-assisted bicycles to drive delivery carts with higher-power than the existing legal standards. This measure is expected to contribute to expanding opportunities where women and the elderly are employed, realizing a low-carbon society, and revitalizing the logistics industry.

2. Business restructuring (As of July 18, 2014)

  Number of approved applications
Business restructuring plan 5
Specified business restructuring plan 4

METI has approved 9 cases for business restructuring plans and specified business restructuring plans.

Looking at one of the applications, METI approved a plan submitted by Mitsubishi Heavy Industries, Ltd. and Hitachi, Ltd., according to which the companies will merge their business sectors for thermal power generation systems and leverage their strength so as to enhance measures for satisfying customers’ needs and related services, thereby aiming to lead the industry as top-level companies in the world.

As another example, METI also approved a plan submitted by Nippon Steel & Sumitomo Metal Corporation and Toho Titanium Co., Ltd., according to which the companies will merge their business to develop a new foundation for manufacturing highly-qualified and competitive titanium alloy, thereby expanding their business in the global market of titanium alloy for aircraft.

Through business restructuring efforts, these companies are expected to improve productivity and acquire competitiveness to win in global markets.

3. Tax incentive to promote capital investment to improve productivity (As of June 30, 2014)

  Number of certified and confirmed applications
Cutting-edge facilities (Class A) 19,240
Facilities that contribute to improving production lines and operations (Class B) 828 (Total: About 1.4371 trillion yen)

The number of applications submitted under this program has already exceeded 20,000; raising the expectation that highly-qualified capital investment will be made. In particular, more than 10,000 applications were submitted to METI in June 2014 alone, showing a significant increase in such investment.

No limitation of eligible sectors is placed on applicants, which enables a variety of companies to proactively utilize the program, not only in the manufacturing sector, in which businesses utilize the program for constructing new plants and boosting production lines, but also in the non-manufacturing sector, in which distributors utilize it for building new warehouses, retailers for opening new stores and saving energy in stores, and service businesses for enhancing business efficiency by introducing new software.

In addition, SMEs account for two-thirds of the total applicants, showing the fact that the program is easily accessible to SMEs.

4. Project for promoting investment in cutting-edge facilities using lease methods (As of June 30, 2014)

  Number of contracts concluded
March - June 2014 28 (7 leasing businesses, 15 entities)
(Estimated expenditures for investing in facilities: About 3.3 billion yen)

A variety of enterprises, not only large enterprises but also ventures, make use of this program to invest in cutting-edge facilities, irrespective of categories and scales of business, including Euglena Co., Ltd., a venture that develops food and cosmetics in which euglena is utilized, and DMG Mori Seiki Co., Ltd., which has a presence in the world in such technical fields as ultrahigh precision machine tools, products with the world’s highest precision, of which the company is particularly proud.

5. Business startups support projects (As of June 20, 2014)

  Number of approved plans
First approval (on March 20, 2014) 87 (94 municipalities)
Second approval (on June 20, 2014) 81 (83 municipalities)
Total 168 (177 municipalities)

METI approved 177 municipalities in 42 prefectures, in which such municipalities will formulate business startups support projects, in collaboration with businesses that support such startups, aiming to facilitate creating new businesses in the regions.

For further details, see the Japanese language press release.

Release Date

July 18, 2014

Division in Charge

Industrial Revitalization Division, Economic and Industrial Policy Bureau

Ministry of Economy, Trade and Industry
1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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