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  5. Part of the Act on Partially Amending the Act on Strengthening Industrial Competitiveness and Other Acts to Create New Business and Encourage Investment in Industries Comes into Force

Part of the Act on Partially Amending the Act on Strengthening Industrial Competitiveness and Other Acts to Create New Business and Encourage Investment in Industries Comes into Force

Japanese

September 2, 2024

Economic & Industrial Policy

On this day, September 2, 2024, part of the Act on Partially Amending the Act on Strengthening Industrial Competitiveness and Other Acts to Create New Business and Encourage Investment in Industries (hereinafter referred to as the “Revised Act”) came into force.

In response, the Ministry of Economy, Trade and Industry (METI) will start the acceptance of applications filed for a variety of support measures under the Revised Act.

1. Outline of the Revised Act

Aiming at the sustainable development of Japanese industries by helping businesses to appropriately deal with changes in the economic situation, including the growing intensification of international competitiveness for business locations, and by facilitating the creation of new business and investment in the industries, the Revised Act is to take measures for improving support for mid-sized enterprises that undertake business reconstruction, reviewing the system for approving business adaptation plans, and extending the period for which the Japan Investment Corporation (JIC) operates.

2. Overview of the systems that will come into force on this day

Measures related to the Act on Strengthening Industrial Competitiveness

1. Growth support for mid-sized enterprises that proactively intend to grow

The Revised Act is to newly define enterprises with 2,000 or fewer employees, excluding SMEs, as “Leading Medium Enterprises,” and also to provide a variety of support measures to Leading Medium Enterprises that pay higher wages and are proactively engaging in domestic investment.

2. Special corporate restructuring plan

The Revised Act is to stipulate a system that allows an applicant enterprise to make use of the following measures if the special corporate restructuring plan submitted by the enterprise is approved: [i] a tax break for reducing the registration and license tax and one for Leading Medium Enterprises and SMEs that have formed group companies, [ii] financial support for necessary funds, and [iii] a variety of support measures involving the Companies Act, e.g., stock-for-stock M&As.

3. System for agile issuing stock options

The Revised Act is to stipulate a system that targets startups that have obtained confirmation from the Minister of Economy, Trade and Industry and the Minister of Justice and allows them to issue stock options within a certain range set by themselves (i.e., a so-called “stock option pool”) in a flexible and agile manner.

4. Plan on a project for an open and close strategy exploiting academic knowledge

The Revised Act is to stipulate a system that provides support (consultation services) to enterprises and universities engaged in joint research and development in formulating a plan on creating a new market by taking advantage of standardization and intellectual property.

5. Promotion of production and sales of products that contribute to strengthening the foundations for industrial competitiveness

The Revised Act is to stipulate a system that targets enterprises producing and selling products with particular significance to obtain markets inside and outside Japan to address international competition (i.e., products that contribute to strengthening the foundations for industrial competitiveness, specifically, electric vehicles, green steel, green chemicals, sustainable aviation fuels (SAF), and semiconductors, e.g., microcomputers and analog semiconductors) and that allows such enterprises to enjoy tax breaks (tax deductions that are proportionate to domestic production and sales in strategic areas) and financial support (low-interest loans), provided that the competent minister approves the plans submitted by the enterprises on production and sales of the aforementioned products.

Measure related to the Limited Partnership Act for Investment (LPS Act)

The Revised Act is to stipulate a measure that reviews the scope of foreign corporations whose value of investment made should be limited to less than 50% of total investment value concerning a limited partnership and adds the acquisition of limited liability company equity to the scope of business subject to investment.

Note: Separately, within a period of one year from the date of promulgation, the Revised Act will stipulate provisions for adding the acquisition of cryptoasset etc. to the scope of business in which an LPS is allowed to invest.

Other measures

Moreover, the following services are added to the existing ones in response to the enforcement of the Revised Act.

Related Materials

Related Link

Division in Charge

Industry Creation Policy Division, Economic and Industrial Policy Bureau

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