August 31, 2018
Aiming at the improvement of the profitability and mid- to long-term corporate value of Japanese companies, the Ministry of Economy, Trade and Industry (METI) has been engaging in developing business environments in which companies are able to quickly and boldly reorganize their business. As part of this effort, in March 2018, METI released a Guidebook for Taking Advantage of Spin-off Approach to encourage companies to smoothly take a spin-off approach. METI hereby announces that it has revised the guidebook in line with the details of the FY2018 Tax System Reform.
Highlights of the revised guidebook
Reflection of the details of the FY2018 Tax System Reform into the guidebook
As its revised points, the FY2018 Tax System Reform stipulates: [ⅰ] relaxation of eligibility requirements for a company that reorganizes its business having full controlling interest in preparation for establishing a spin-off, and [ⅱ] requirements for an original parent company that has established a spin-off to notify the ratios of splitting of shares and other information to securities companies. The guidebook additionally explains these revised points of the tax system.
Note: The term “spin-off” refers to a business approach that a company may take in advancing the Selection and Concentration strategy. In this approach, a company separates a specific business department or wholly owned subsidiary from the company and establishes a new company with no capital ties to the original parent so that it operates independently. Such independent operation will permit both the original parent company and the spin-off to conduct swift, flexible decision making, unique fund raising based on independent capital, and expand business partners. This approach is expected to improve the corporate value of both the original parent company and the spin-off.
- Guidelines for Taking Advantage of Spin-off Approach (revised in August 2018, in Japanese) (PDF:2,023KB)
Division in Charge
Corporate System Division, Economic and Industrial Policy Bureau