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  • February 2017
  • Cabinet Decision on the Bill for the Act of Partial Revision of the Act on Formation and Development of Regional Industrial Clusters through Promotion of Establishment of New Business Facilities, etc.

Cabinet Decision on the Bill for the Act of Partial Revision of the Act on Formation and Development of Regional Industrial Clusters through Promotion of Establishment of New Business Facilities, etc.

On February 28, 2017, the Cabinet decided to approve the Bill for the Act of Partial Revision of the Act on Formation and Development of Regional Industrial Clusters through Promotion of Establishment of New Business Facilities, etc. (commonly called the Bill for the “Regional Future Investment Promotion Act”), and the bill will be submitted to the 193rd ordinary session of the Diet.

1. Purpose of the bill

The current economic situations in regions across Japan show brisk trends in corporate earnings and employment, while some challenges remain, such as a lack of robustness in business investment by manufacturing and other industries that traditionally support regional economies. Meanwhile, some pioneering businesses are emerging in challenging new fields with high growth potential (e.g., tourism and aircraft components) which take advantage of regional characteristics (“Regional Future Investment” efforts) in their efforts. In light of this, Japan needs to intensively invest in these efforts across Japan to realize a virtuous cycle in Japan’s earning power through policy initiatives.

Against this backdrop, Japan aims to fortify the foundation on which regions are able to develop independently, and to this end, it decided to create a new program to approve plans prepared by regional businesses for “leading projects for invigorating regional economies” (hereinafter referred to as “leading projects”), which are initiatives which aim at creating high-value added products and services that take advantage of regional characteristics and at stimulating regional economies by bringing about economic ripple effects which affect regional businesses. Along with this program, Japan will also take supportive and other measures targeting projects which incorporate such plans.

2. Outline of the bill

1) Establishment of a new approval program for plans for leading projects

  1. Formulation of basic policies by the government of Japan
    • The government of Japan will stipulate basic policies concerning the promotion of leading projects in regional areas
  2. Preparation of basic plans by municipalities for promoting leading projects, and other efforts
    • Municipal governments will be eligible to jointly prepare a basic plan concerning the promotion of leading projects based on the basic policies and seek the agreement of the government of Japan.
  3. Preparation of plans for leading projects by businesses and other entities and filing related requests for approval
    • Businesses and other entities that intend to embark on leading projects will be eligible to prepare plans for leading projects based on the basic plans and to file requests for municipal approval of the plans.

2) Improvement of supportive measures for approved plans for leading projects

Aiming to support projects that are expected to bring about strong, multi-sector ripple effects in regional economies, Japan will improve support measures targeting businesses and business operators in broad areas, including manufacturing and non-manufacturing industries (e.g., service industries).

Specifically, these measures include the improvement of: [1] support measures for business investment (tax reductions for business investments, supplementary measures that accompany the reductions and local tax exemptions), [ii] support measures employing both fiscal and monetary initiatives (utilization of grants for promoting the revitalization of regional economies, promotion of risk capital supply, etc.), [iii] special arrangements concerning regulations (relaxation of regulations over green-space-area ratios under the Factory Location Act, addition of general incorporated associations to the list of entities eligible for the registration of regional collective trademarks; streamlining of procedures when filing for approval to limit disposition of property under the Act on Regulation of Execution of Budget Pertaining to Subsidies, etc.; and special consideration related to permits for diversion of agricultural lands and development permits for urbanization control areas, etc.), and [iv] measures related to procedures by which businesses submit proposals to municipalities towards improving business environments, and other measures.

3) Establishment of a new approval program concerning collaborative support plans for leading projects

Regional support organizations (e.g., public research and development institutes) that intend to collaboratively support leading projects, will be eligible to prepare a collaborative support plan and file for government approval. As a support measure for approved collaborative support plans, Japan will develop certain measures, including measures to streamline filing procedures concerning the limitation of disposition of property under the Act on Regulation of Execution of Budget Pertaining to Subsidies, etc.

3. Effective date

The Act of Partial Revision will come into effect as of the day specified by Cabinet Order within a period not exceeding three months from the date of promulgation.

Release date

February 28, 2017

Division in Charge

Regional Economic and Industrial Policy Division, Regional Economic and Industrial Policy Group

Ministry of Economy, Trade and Industry1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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