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SMEs PRODUCTIVITY IMPROVEMENT
ECOSYSTEM FOR NEW STARTUPS
CORPORATE GOVERNANCE
CORPORATE TAX REDUCTION
FOREIGN BUSINESS PARTNERSHIPS

Unlocking economic opportunities means opening up all of our potential, from strength in local regions and the SME sector, to creating an ever more friendly business environment.

SMEs PRODUCTIVITY IMPROVEMENT

SMEs (Small and Medium Enterprises) provide 70% of all employment and more than 50% of all added value in Japan. As such, the potential to boost the economy via raising SME productivity with new technology is enormous.

Promote through subsidies broader use of latest IT devices at SMEs
Reduce property tax as for SMEs that make certain capital investments in ICT, robotics and cloud tools
Law took effect in May 2018
Support ownership and business transitions for SMEs to enhance productivity
Further encourage SMEs’ overseas expansion through providing them with necessary information

Achievements

Pre-tax profit of SMEs in FY2018 is
18.4 trillion yen

Source: Ministry of Finance “Financial Statements Statistics of Corporations by Industry”; all industries, enterprises with capital of at least JPY 10 mn but less than JPY 100 mn, seasonally adjusted figures

ECOSYSTEM FOR NEW STARTUPS

Create a rewarding and agile environment for those who have passion for creating their own startups, encouraging grass-roots innovation.

Create as many as 20 unicorns by 2023 by using private-public initiatives such as “J-Startup”
Bring outstanding startups to top international industry conferences and make Japan’s startup ecosystem even more attractive for those overseas

CORPORATE GOVERNANCE

Realize sustainable corporate growth through strong governance

Published new guidelines for stronger group corporate governance to enhance good corporate values at group companies in June 2019
Drew up a Corporate Governance Code, to promote transparent, fair, timely and decisive decision-making by listed companies
Revised in 2018
Formulated a Stewardship Code, to promote constructive engagement and a purposeful dialogue between institutional investors and investee companies
Revised in 2020
Plan to update requirement for listed companies to enhance corporate governance by appointing independent outside directors

Achievements

Corporate Governance Code
- Applied to more than 2,000 companies
- Percentage of listed companies^* with two or more independent outside directors rose from 17% to 93%**
  Source: Tokyo Stock Exchange
  *First Section **From 2012 to 2019
Stewardship Code
- Accepted by more than 280 institutional investors
  Source: Financial Services Agency

CORPORATE TAX REDUCTION

Reform corporate tax to be growth-oriented

Reduce corporate tax rate below 30% mark in 2016

Source: Ministry of Finance
Substantial tax burden on corporate profits will be reduced to as low as 25% for companies proactively engaging in wage increases and capital investment
Companies also proactively engaging in advanced IT investment will be eligible for further tax reductions, bringing the substantial tax burden on corporate profits down to as low as 20%

Achievements

Annual corporate tax revenue increased by close to 7 trillion yen compared to the previous administration, despite the reduced corporate tax rate

FOREIGN BUSINESS PARTNERSHIPS

For more information: https://www.jetro.go.jp/en/invest

Optimize administrative processes
- Reduce administrative costs by 20% by 2020 from 2017 levels in areas that are considered to have the heaviest burden, e.g., for “business approvals and licenses” and “social insurance”
- Consolidate scattered registration outlets for different documents into one convenient outlet, e.g., Tokyo One-Stop Business Establishment Center
- Host FDI (Foreign Direct Investment) seminars to disseminate FDI information
- Support the matching of foreign companies with domestic SMEs by utilizing the J-GoodTech website: https://jgoodtech.jp/pub/en/

Achievements

16,349
cases processed at the Tokyo One-Stop Business Establishment Center (as of April 2020)
Net amount of inward FDI in 2018 marked a record high of 30.7 trillion yen

Source: Ministry of Finance “International Investment Position of Japan” as of May 2019

Invest in Japan, the Land of Rising Opportunities!

Japan is quickly transforming to become the most business-friendly nation in the world.
Japan welcomes your investment.

Evolving Innovation

Backed by regulatory reforms, R&D activities are accelerating innovation, and creating new business opportunities, e.g., in digital and medical/healthcare industries.

Market Potential

Thanks to Abenomics, the world’s third largest economy keeps booming by increasing productivity and embracing highly skilled, diverse human resources.

Quality Business Environment

Sophisticated transportation network, expanding FTAs and growth-oriented policy measures are creating a favorable environment for global business.

https://www.japan.go.jp/investment/

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