|Posted by TokyoAdvisory Inc. on January 21, 2012 at 8:40 PM|
Do you know Ministry of Economy, Trade and Industry of Japan has announced projects selected under FY 2011 “Subsidy Program for Projects Promoting Asian Site Location in Japan” ?
There you will find 10 projects selected under the FY 2011 Subsidy Program for Projects Promoting Asian Site Location in Japan as below.
1 DSM Japan Engineering Plastics K.K. (Netherlands)
2 Intelligent Energy Holdings Plc (U.K.)
R&D Fuel cells
3 Medasys Japan K.K. (France)
R&D Medical information system
4 Mikado Kyowa Seed Co., Ltd. (Subsidiary of Vilmorin & Cie S.A.)( France)
R&D Vegetable seeds
5 NeoPhotonics Japan, Godo Kaisha (USA)
R&D Optical communication equipments
6 Nihon Cabot Microelectronics K.K. (USA)
R&D Materials for electronics component (Abrasive)
7 Sanofi-Aventis K.K. (France)
Regional Head Quarters Pharmaceuticals
8 Umicore N.V. (Belgium)
R&D Industrial chemicals (Catalyst)
9 Volvo Technology AB (Sweden)
R&D Technology development related to automobiles
10 3M Health Care Ltd. (USA)
R&D Healthcare products
On the other hand, projects adopted under the FY 2010 Subsidy Program for Projects Promoting Asian Site Location in Japan announced 5 as below.
1 salesforce.com Co., Ltd. (United States) R&D Site IT services
2 Zydus Pharma Japan Co., Ltd. (India) R&D Site Pharmaceuticals
3 Dyesol Japan Co., Ltd. (Australia) R&D Site Next-generation photovoltaic cells
4 Eurocopter Japan Co., Ltd. (France) R&D Site Special-purpose helicopters
5 Dou Yee International Private Ltd. (Singapore) R&D Site Liquid crystal displays
The FY 2011 Subsidy Program increase twofold of the FY 2010.
In 23th Aug. 2011, METI of Japan has annouced Subsidy Program for Projects Promoting Asian Site Location in Japan as below.
Private enterprises that satisfy all of the below requirements:
1.Musthave corporate status in Japan
2.Must belong toa corporate body consisting of group companiesthat are running an actual business in 2 or more countries.
*Foreign corporations (includingbranch offices in Japan) must have corporate status in Japan by the time of the grant application if your siteis selected by this public offering.
Projects that satisfy all of the below requirements:
1.The project*must developa Regional HQ**or R&DSite***in Japan
2.Therelevant headquarters’ operations or R&D activitiesmust continue for a minimum of 3 yearsafter the end of project period
3.The investment plan must not have been publicly announced prior tothe cabinet approval of the budget bill of 2011 general account(December 24th2010).
*Relocation and accumulation of sites already in Japan are excluded
**Engages in Business relating to decision making or coordination ofpolicy (itemsessential to the execution of corporate activities (sales and marketing, corporate planning, finance, personnel and training, R&D, production management, distribution, legal affairs, etc.), of aminimum of 2 controlledgroupcompanies (in 2 or more countries)
***Projects developing facilities needed to carry out R&D,such as industrialization through applied development, trials and product testing for advanced industrial technology
The establishmentof the R&D /Regional HQ must be completed by the end of September, 2013from the date of the decision to grant the subsidy.
<Rate of Subsidy>
1.Subsidy rate: up toone-half for SMEs*; up toone-third for non-SMEs
2.Limit: 1 billion yen
*Corporations of which one half or more of its authorized shares are owned by large corporations are not considered to beSMEs. (Refer to the Public Offering Guidelines for the definition of SMEs)
1.Survey design costs (survey and design costs needed for building, refurbishment or facilityinstallation)
2.Facilitycosts (costs required for purchasing, building or refurbishment of facilities, including integrally developed facilities)
3.Equipmentcosts (costs needed for purchasing, leasing, and setting up equipment and software)
4.Facility lease fee
(Note1) In principle, removal costs (costs to demolish existing buildings or remove existing facilities), exterior work costs, and facility constructioncosts not directly connectedwiththefacility itselfwill not apply.The same applies for survey design costs, facility costs, and facility rentalcharges.In addition, only those facility and equipment expenses which will be solely and directly used for the subsidized project will be subject to subsidy.
(Note2) Lease fees for facility and equipment will be subsidized until the end of the project period (the end of September 2013).
(Note3) Temporarydeposits (including collateral) will not apply.
Implementation ability,eligibility of businessfor subsidy, validity of costs and work schedule, etc.
2.Uniqueness of the relevantsite
It is expected that the relevant site is new to Japan.
3.Added value of the relevantsite
Substantial investment amount and potential for employment creation, as well as incorporates of one of the following aims:
a) Regional HQ
The site is expected to besuperior in terms of the number of sites it controls, its business functions, responsibilities, andpersonnel, as well as create newlyaddedvalueinJapan.
b) R&D Site
The site is expected to besuperior in terms of innovativeness, staff, patents and know-how, as well as create newlyaddedvalueinJapan.
4.Ripple effects such as the accumulation effectthat the subsidized project is expected to have in Japan
・It is expected that there will be a strongripple effect on the Japanese economy through collaboration with domestic companies, universities or public research institutions, or an accumulation effect inthe relevantregion.
・It is expected that there will be no risk of drains of patents, technologies or inventions developed by Japanese companies, universities or public/private institutions.
・Contributionto the recovery of disaster affected areas from the East Japan Earthquake (e.g. collaboration with companies located in the affected area, location of R&D/Head site in the affected area)
5.Overseas locational competitiveness
Whether a review has been made of relocating the project overseas,whether the site has been invitedby the relevant region,whether other foreign governments operate a similar location policy,and the reason for deciding to locate the site in Japan
<Duties of Subsidized Companies>
1.Subsidized companies must report results following the completion of the subsidized project and submit a project continuity reportfor 3 years
2.The disposal, sale, or redistribution of propertyand assets acquired through the subsidy is restricted and the use of the property for purposes other than the original intentis prohibited
3.Revenue and expenditure documentation for the subsidized projectmust be preserved.
<Period of Public Offering>
Period for Acceptance of Application Form:Tuesday, August 23rd, 2011to Monday, October 31st, 2011 (no later than12:00 p.m.Japan time)
(From JETRO website)
Subsidy Program for Projects Promoting Asian Site Location in Japan is a mesure of Promotion to make Japan an Asian Business Center
The following incentives are applicable to new R&D and headquarters operations conducted in Japan by global companies certified by the competent minister.
(1) Preferential corporate tax (20% deduction for 5 years for certified companies)
(2) Preferential income tax (preferential tax treatment for stock options from the foreign parent company)
(3) Preferential treatment under the Foreign Exchange Act (faster investment procedures)
(4) Special exemption for patent fees (patent fees and examination request fees reduced by half)
(5) Special treatment under the Small and Medium-sized Enterprise Investment Business Corporation Act (Small and medium firms capitalized at over 300 million yen will also be supported.)
* Expedited visa examination for foreigners through supportive implementation of the system.
Concerning about corporation taxation, the rate has decreased 5% in 2011 tax reform.
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