RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/Q2/JPN/17
14 May 1998
(98-1922)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Replies to Questions Posed by KOREA1, CANADA2, ARGENTINA3,
the EC4 and the UNITED STATES5  Regarding the New
and Full Notification of JAPAN6
The following communication, dated 22 April 1998, has been received from the Permanent
Mission of Japan.
_______________
QUESTIONS FROM KOREA
Q8. Grant for promotion of research and development of future ships
Could Japan explain to whom and how the subsidy is provided?
In addition to that, could Japan provide more details about the conditions and criteria
according to Article 8.2 of the SCM Ag reement on the assistance for research?
A. The grant is provided to those who conduct research and development of higher technologies
for future ships in private sector.  The Government examines the application submitted by the person
or organization who requests subsidy.  The Government examines the aim and programme described
on the application form and evaluates whether the applicant could conduct the research anddevelopment.  This subsidy is budgeted from the general account by the Government of Japan.  The
proportion of funding is below 50 per cent.
                                                     
1G/SCM/Q2/JPN/1
2G/SCM/Q2/JPN/2
3G/SCM/Q2/JPN/6
4G/SCM/Q2/JPN/4 and G/SCM/Q2/JPN/10
5G/SCM/Q2/JPN/7
6G/SCM/N/3/JPN/Rev.1, Corr.1, Suppl.1G/SCM/Q2/JPN/17
Page 2
Q17. Special depreciation on certain machinery  used for high-technology in the designated
high-technology industrial development areas (Technopolis)
Japan's notification states that this subsidy is provided to corporations that engage in
the qualified high-technology industries.
Could Japan provide a more detailed explanat ion of the selection criteria for these high-
technology industries and the specific industries or enterprises eligible for the subsidy?
A. In view of developing high-technologies which meet the progress of technological innovation,
the following 24 industries are qualified.  This subsid y is provided to corporations in the qualified
industries which file a Blue Return.7
1. Intermediate products of high-quality medical and agricultural chemical industry2. Engineering plastic industry
3. Chemical fibre for translucent films industry
4. High quality medicine industry5. Semiconductor material industry
6. Nonferous special alloy industry
7. High-performance machine and tool industry
8. High-performance special industrial machine industry
9. High-performance business machine and appliance industry10. Precision mold, parts, and accessories industry
11. Industrial robot industry
12. Servomotor and mini-sized motor industry
13. High-performance open-and-close machine, switchboard, and electric power control
device industry
14. Radio communication machine industry
15. Electronic appliance industry
16. Electronic parts and devices industry
17. Solar battery, accessories, and machine industry
18. Motor vehicle, parts and accessories industry19. High-performance machine precisely to measure, to analyse, and to examine industry
20. High-performance optical instrument and lens industry
21. Software industry
22. Industrial design industry
23. Machine design industry24. Engineering industry
In the areas which are designed as high-technology industrial development areas, corporations
which purchase machineries and/or facilities within 14 years from the day of the approval of a blue
return and put them in use for businesses of the qualified high-technology industries are eligible for
this subsidy.
                                                     
7The Blue Return system is a way of tax return.  Where taxpayers keep the proper accounting records
in accordance with the official requirements, the applicatio n of the Blue Return is approved by the Director of
the Tax Office in their place for tax payment and certain tax privileges are given to them.G/SCM/Q2/JPN/17
Page 3
QUESTIONS FROM CANADA
2. Grant for promotion of research and development of future ships
With respect to funding for promoting research and development for future ships, can
Japan advise as to the nature of the activities  funded;  i.e. has funding been provided for,
fundamental research, industrial research, or pre-competitive development activity, or all
three?  Could Japan indicate, where relevant, what proportion of funding has been provided for
these types of research?
A. The grant can be provided to all three activities mentioned above.  In any case, the proportion
of funding is 50 per cent.
Q3. Tax Measures to strengthen the Management of Small and Medium-Sized Corporations
Regarding assistance under the programme entitled, “Tax Measures To strengthen the
Management of Small and Medium-Sized corporations”, can Japan advise how small and
medium sized corporations are defined?  Are the tax measures (i.e. tax credit and deferral)applicable only to the acquisition of capital equi pment?  Would the same definition apply to the
programme entitled:  “Special Depreciation On Machinery (p. 17 of document
G/SCM/N/3/JPN/Rev.1)?
A. This measure is applicable to the agricultural processing enterprises with the capital of up to
¥100 million which are regulated in The Law on Temporary Measures for Improvement ofAgricultural Product Processing Industry.
Special depreciation on facilities, however, is not limited to corporations with the capital of
up to ¥100 million.
This measure is also applicable to corporations when the corporations rent and use equipment.
Q4. For those programmes where the subsidy is provided in the form of a tax deferral,
i.e. programmes described on pages 11-20 of document G/SCM/N/3/JPN/Rev.1, can Japan
clarify the sort of asset on which income is bein g deferred;  i.e. income from the use of an asset,
sale of asset etc.?  Where tax deferral does not mean some form of accelerated capital cost
allowance, can Japan indicate in what year the income will be included into taxable income?
A. All kinds of income are added up according to the corporation tax law.  Therefore, it is
impossible to differentiate a certain kind of income.  Useful life of asset is regulated corresponding
machinery for depreciation and the income is incl uded into taxable income for the useful life.
QUESTIONS FROM ARGENTINA
Q4. The Subsidy Programme for Research and Development of Future Ships:  could Japan
specify the research and development costs c overed by the programme, as well as the
percentage of the total cost of the development programme covered by th e subsidies within the
meaning of Article 8.2(a) of the Subsidies Agreement?
A. Under this programme the proportion of expenses which private companies should pay is over
50 per cent of the total cost for R&D.G/SCM/Q2/JPN/17
Page 4
Q5. In the case of the Programme to Streng then the Management of Small and Medium-
Sized Corporations, which is to end on 31 March 1997, could Japan state whether it plans to
extend this programme?
A. Japan is reviewing this programme as to whether it should be extended or not.
Q6. With regard to the Subsidy Programme for the Additional Depreciation on Machinery,
do the tax deferrals provided under the programme include exported products as provided forin Annex I, paragraphs (g) and (h) of the Subsidies Agreement?
A. Special Depreciation of Machinery and Facility is applicable to the facility for production
acquired by the manufacturer who meets specified conditions, regardless whether its products are
exported or not.  This programme is not provided on the basis of the export of products either.
QUESTIONS FROM THE EUROPEAN COMMUNITIES
I. NOTIFIED SUBSIDIES PROGRAMMES
Q(a) Special depreciation on certain machinery for high-technology industries
- Could Japan clarify whether this programme is granted under the Technopolis
Law and/or Special Taxation Measures Law?   Can benefits under both Laws be
conferred cumulatively?
A. This programme is granted under Special Tax Measures Law, not under the Law for
Accelerating Regional Development Based upon High-Technology Industrial Complexes ("theTechnopolis Law").
Q. - Could Japan explain what th e criteria for eligibility are?
A. In view of developing high-technologies which meet the progress of technological innovation,
the following 24 industries are qualified.  This subsid y is provided to corporations in the qualified
industries which file a Blue Return.
8
1. Intermediate products of high-quality medical and agricultural chemical industry
2. Engineering plastic industry
3. Chemical fibre for translucent films industry
4. High quality medicine industry
5. Semiconductor material industry6. Nonferous special alloy industry
7. High-performance machine and tool industry
8. High-performance special industrial machine industry
9. High-performance business machine and appliance industry
10. Precision mold, parts, and accessories industry11. Industrial robot industry
12. Servomotor and mini-sized motor industry
13. High-performance open-and-close machine, switchboard, and electric power control
device industry
                                                     
8The Blue Return system is a way of tax return.  Where taxpayers keep the proper accounting records
in accordance with the official requirements, the applicatio n of the Blue Return is approved by the Director of
the Tax Office in their place for tax payment and certain tax privileges are given to them.G/SCM/Q2/JPN/17
Page 5
14. Radio communication machine industry
15. Electronic appliance industry
16. Electronic parts and devices industry
17. Solar battery, accessories, and machine industry
18. Motor vehicle, parts and accessories industry
19. High-performance machine precisely to measure, to analyse, and to examine industry20. High-performance optical instrument and lens industry
21. Software industry
22. Industrial design industry
23. Machine design industry
24. Engineering industry
In the areas which are designed as high-technology industrial development areas, corporations
which purchase machineries and/or facilities within 14 years from the day of the approval of a bluereturn and put them in use for businesses of the qualified high-technology industries are eligible for
this subsidy.
Q. - The Technopolis Law provides for an additional special depreciation on
corporate income tax for high-technology industries which seems different from
a depreciation on machinery.  Could Japan clarify whether this programme iscovered by the notification and if not, provide a notification under Article 25?
A. The Technopolis Law does not provide any additional special depreciation which are different
from a depreciation on machinery.  The programme which is established under the Law consists of the
special inclusion in expenses which permits those who pay their contribution to the fund of
foundations engaging in the business which is necessary for industrial development on high-technology to include the contribution in expenses.  This programme is not limited to funds
concerning the Technopolis Law and does not benefit any specific industry.
II. ADDITIONAL PROGRAMMES NOT NOTIFIED TO WTO
NATIONAL OR FEDERAL PROGRAMMES
Q4. Tax Concessions for Software Businesses
Pursuant to the Special Taxation Measures Law, all sub-federal governments have the
right to grant tax concessions to ent erprises engaged in software development.
The Community requests Japan to notify this programme under Article 25.
A. Reserve for this programme, which is stipulated in the Special Tax Measures Law, is
provided to corporations engaging in the followin g 3 businesses and meeting the specified conditions.
1. software business
2. database business
3. system service business
The above 3 businesses are defined as "service industry" in the Japan Standard Industrial
Classification.  Subsidy programmes which are provided for service industry do not have to be
notified under the SCM Agreement.G/SCM/Q2/JPN/17
Page 6
REGIONAL PROGRAMMES
1. TOKUSHIMA
1.1 Assistance for the promotion of regional location
The purpose of this subsidy is to induce private enterprises to establish their plants or offices
where necessary for regional development.  Private enterprises are automatically eligible for this
subsidy when they establish manufacturing plants in Tokushima Prefecture.
Industries (products) covered:  Manufacturing etc.
1. Name of subsidy
Tokushima Prefecture Industry Relocation Subsidy.
2. Type of subsidy
Grant
3. Legal grounds
Guidelines for provision of Tokushima Prefecture Industry Relocation Subsidy.
4. Amount of subsidy (units:  ¥1,000)
¥111,894
5. Amount of subsidy per unit product
Actual data are not available, since parties are required to file an application for subsidy
within one year of commencement of operations.
6. Policy objectives
To encourage industries to relocate to this prefecture, to create jobs and revitalize the
economy in the prefecture.
7. Conditions for provision of subsidy
(1) Businesses:
Manufacturers or private research institutes who will file blue tax returns under
Article 2.40 of the Corporation Tax Law.
(2) Projects eligible for subsidies:
Projects where companies will build plants, etc. in Tokushima Prefecture
(3) Costs covered by subsidy:
Cost of building, new plants, etc., as above
(4) Standards subsidy
- Must create new jobs for at least 5 local people
- Operations should start within 5 years of acquiring plant site (includes rented
sites)
(5) Ratio of subsidyG/SCM/Q2/JPN/17
Page 7
8. Period of provision of subsidy
From fiscal 1983 through fiscal 1996
9. Statistics showing effect of subsidy on trade
No statistics are available
Q2. HOKKAIDO
2.2 Programme for the promotion of regional industries
A. Small and medium-sized enterprises in manufacturing industries including software industries
located in Hokkaido Prefecture are automatically eligible for this programme.
Industries (products) covered:  Manufacturing industries, etc.
1. Name of subsidy
Project, costs for developing, strengthening or promoting local industries
2. Type of subsidy
Grant, loan and guarantee of liabilities
3. Legal grounds
Ordinance for promotion of local industries and its enforcement regulations.
4. Amount of subsidy (units:  ¥1,000)
¥109,000
5. Amount of subsidy per unit product
Cannot be calculated, since the subsidy is not intended for products but as R&D and startup
funds for new products, new technology, etc.
6. Policy objectives
To encourage development of local manufacturing industries which are able to respond
aggressively to technological innovation or changes in the demand structure by providing funds forR&D, startup businesses introducing new pr oducts, new technology, and human resources
development for small and medium-sized companies which are engaged in manufacturing or software
development.
7. Conditions for provision of subsidy
(1) Businesses:
Companies engaged mainly in manufacturing or software development within
Hokkaido.
(2) Projects eligible for subsidies:G/SCM/Q2/JPN/17
Page 8
Projects conducting R&D or startup businesses introducing new products, new
technology, etc.
(3) Costs covered by subsidy:
Cost of raw materials for R&D and startup businesses;  living and transportation costs
for human resources development.
(4) Standard subsidy.  As per attached document
Any personnel dispatch for human resources development should be for a minimum
of 30 days, the interest rate should be 1.5 per cent or less up to the third year and
2.5 per cent or less from the fourth year, and any preferential period should be for a
maximum of 10 years.
(5) Ratio of subsidy.  As per attached document.
50 per cent of total expenses or less for R&D and human resources development;
8/10 or less for startup businesses.
8. Period of provision of subsidy
From fiscal 1986 through fiscal 1996.
9. Statistics showing effect of subsidy on trade
No statistics are available
5. SHIMANE
5.1  The Shimane Prefecture Enterprises Establishment Fund
The purpose of this programme is the restructuring, renovation, and modernization of SME's
in the Shimane Prefecture.  Private enterprises are automatically eligible for this subsidy when they
establish their plants or offices in the Shimane Prefecture.
Industries (products) covered:  All manufacturing industries
1. Name of subsidy
Shimane Prefecture industry relocation fund.
2. Type of subsidy
Loan
3. Legal grounds
Ordinance for Shimane Prefecture industry relocation.
4. Amount of subsidy (units:  ¥1,000)
¥20,521
5. Amount of subsidy per unit product
Cannot be calculated, since loan is extended for capital investment.G/SCM/Q2/JPN/17
Page 9
6. Policy objectives
To encourage advanced industries, increase employment opportunities, and to encourage the
growth of communities' population in the Shimane Prefecture.
7. Conditions for provision of subsidy
(1) Businesses:
Manufacturers
(2) Projects eligible for subsidies:
Projects where companies establish plants or business premises in the Shimane
Prefecture.
(3) Costs covered by subsidy:
Costs needed to obtain fixed capital investment necessary to establish the business.
(4) Standard subsidy:
- Fixed capital investment should be ¥500 million or more.- The project should create jobs for at least 30 people (at least 20 people if 5 or
more engineers or researchers are included)
(5) Ratio of subsidy:
Maximum of 50 per cent
8. Period of provision of subsidy
From fiscal 1992 through fiscal 1996
9. Statistics showing effect of subsidy on trade
No statistics are available.
6. TOTTORI
6.1  Emergency Economic Measure Special Fund
Small and medium-sized enterprises in Tottori Prefecture are automatically eligible for this
loan when their sales decrease due to a depressed economy.
Industries (products) covered:  Small and medium-sized companies
1. Name of subsidy
Emergency support fund for fiscal 1992
2. Type of subsidy
Loan
3. Legal grounds
Regulations for loan from Tottori Prefecture special financing fund, and enforcement
guidelines for emergency support special financing in fiscal 1992.G/SCM/Q2/JPN/17
Page 10
4. Amount of subsidy (units:  ¥1,000)
¥35,063
5. Amount of subsidy per unit product
Not possible to calculate, since loan is extended for working capital.
6. Policy objectives
To extend low-interest loans to small and me dium-sized companies whose sales turnovers
decreased due to the recession to stabilize their business operations and to invest in labour saving
equipment.
7. Conditions for provision of subsidy
(1) Businesses:
Small and medium-sized companies having offices in Tottori Prefecture, whose sales
turnovers for the latest three months decreased by 10 per cent or more over the same
period in the previous year.
(2) Projects eligible for subsidies:
Companies introducing the type of equipment described above.
(3) Costs covered by subsidy:
Working capital and funds for equipment.
(4) Standard subsidy (units:  ¥1,000):
Only operating capital - ¥30,000;  only cost of equipment - whichever is lower, either
¥50,000 or maximum of 90 per cent of equipment plus working capital - whichever is
lower, either maximum of 90 per cent of cost of equipment plus working capital
(maximum of ¥30,000) or ¥50,000.
(5) Ratio of subsidy (deposit ratio):
2/9 (in urban areas) and 1/3 (in rural areas).
8. Period of provision of subsidy
From fiscal 1992 through fiscal 2002.
9. Statistics showing effect of subsidy on trade
No statistics are available.
Industries (products) covered:  Small and medium-sized companies
1. Name of subsidy
Emergency support fund for fiscal 1993
2. Type of subsidy
LoanG/SCM/Q2/JPN/17
Page 11
3. Legal grounds
Regulations for loan from Tottori Prefecture special financing fund, and enforcement
guidelines for emergency support special financing in fiscal 1993.
4. Amount of subsidy (units:  ¥1,000)
¥7,649
5. Amount of subsidy per unit product
Not possible to calculate, since loan is extended for working capital.
6. Policy objectives
To extend low-interest loans to small and me dium-sized companies whose sales turnovers
decreased due to the recession in order to ease the cash flow, reduce the burden of interest, and
stabilize business operations.
7. Conditions for provision of subsidy
(1) Businesses:
Small and medium-sized companies having offices in Tottori Prefecture, whose sales
turnovers for the latest three months decreased by 10 per cent or more over the same
period in the previous year.
(2) Projects eligible for subsidies:
Working capital as above.
(3) Costs covered by subsidy:
Working capital.
(4) Standard subsidy (units:  ¥1,000):
¥30,000
(5) Ratio of subsidy (deposit ratio):
2/9 (in urban areas) and 1/3 (in rural areas).
8. Period of provision of subsidy
From fiscal 1993 through fiscal 1998.
9. Statistics showing effect of subsidy on trade
No statistics are available.G/SCM/Q2/JPN/17
Page 12
6.2 Cool Summer Measure Fund
(Cool Summer Countermeasures Fund)
Small and medium-sized enterprises in Tottori Prefecture are automatically eligible for this
loan when their sales decrease due to a cool summer.
Industries (products) covered:  Small and medium-sized companies
1. Name of subsidy
Cold summer fund for fiscal 1993.
2. Type of subsidy
Loan
3. Legal grounds
Regulations for loans from Tottori Prefecture special financing fund, and enforcement
guidelines for cold summer special financing for fiscal 1993.
4. Amount of subsidy (units:  ¥1,000)
¥2,254
5. Amount of subsidy per unit product
Not possible to calculate, since loan is extended for working capital.
6. Policy objectives
To extend low-interest loans to small and me dium-sized companies whose sales turnovers
decreased due to the cold summer in fiscal 1993 in order to ease the cash flow, reduce the burden of
interest, and stabilize business operations.
7. Conditions for provision of subsidy
(1) Businesses:
Small and medium-sized companies having offices in Tottori Prefecture, whose totalsales turnover in July and August 1993 decreased over the same period in the
previous year and whose sales turnover decreased by 10 per cent or more in either
month over the same month in the previous year.
(2) Projects eligible for subsidies:
Working capital as above.
(3) Costs covered by subsidy:
Working capital.
(4) Standard subsidy:  (units:  ¥1,000)
¥10,000
(5) Ratio of subsidy (deposit ratio):
2/9 (in urban areas) and 1/3 (in rural areas).G/SCM/Q2/JPN/17
Page 13
8. Period of provision of subsidy
From 1993 through fiscal 1998.
9. Statistics showing effect of subsidy on trade
No statistics are available.
6.3 Prefectural Enterprise Establishment Fund
Private enterprises in manufacturing industries including software industries are automatically
eligible for this subsidy when they establish their plants or offices in the Tottori Prefecture.
Industries (products) covered:  Manufacturing industries
1. Name of subsidy
Tottori Prefecture industry relocation subsidy.
2. Type of subsidy
Grant
3. Legal grounds
Regulations for the provision of Tottori Prefectural subsidies etc., and guidelines for the
provision of Tottori Prefecture industry relocation subsidies.
4. Amount of subsidy (units:  ¥1,000)
¥211,978
5. Amount of subsidy per unit product
Not possible  to calculate (since subsidies are provided for capital investment).
6. Policy objectives
To help relocate industry to this prefecture, to develop the industrial structure, and increase
employment opportunities in the prefecture.
7. Conditions for provision of subsidy
(1) Businesses:
Companies inside or outside the prefecture who will establish new plants or expand
existing plants or business premises in this prefecture.
(2) Projects eligible for subsidies:
The construction of new plants or expansion of existing plants by companies who are
engaged in high-tech or general manufacturing industries, natural science research
institutes, software development companies, etc.G/SCM/Q2/JPN/17
Page 14
(3) Costs covered by subsidy:
Cost of acquiring land, buildings or depreciable property (= fixed asset)
(4) Standard subsidy:
High-tech or general manufacturing industries - fixed assets should be more than
¥500 million and 20 or more new jobs should be created.
Natural science research institutes, software development companies, etc. - fixedassets should be more than ¥100 million and 10 or more new jobs should be created.
(5) Ratio of subsidy:
[Fixed assets] x (4 to 15) per cent
8. Period of provision of subsidy
From fiscal 1985 through fiscal 1995.
9. Statistics showing effect of subsidy on trade
No statistics are available.
6.4 Prefectural Enterprise Establishment Promotion Fund
Private enterprises in manufacturing industries including software industries are automatically
eligible for this loan when they establish their plants or offices in the Tottori Prefecture.
Industries (products) covered:  Manufacturing industries
1. Name of subsidy
Tottori Prefecture industry relocation fund.
2. Type of subsidy
Loan
3. Legal grounds
Guidelines for the system of allocating Tottori Prefecture industry relocation funds.
4. Amount of subsidy (units:  ¥1,000)
¥58,654
5. Amount of subsidy per unit product
Not possible to calculate (since subsidies are provided for capital investment).
6. Policy objectives
Companies who build new plants, expand or transfer existing plants to industrial parks in
Tottori Prefecture, or establish parks around the site of their plants will be furnished with a part of the
necessary funds in order to promote the relocation of industry to, and establish more industrial parks
in, the prefecture.G/SCM/Q2/JPN/17
Page 15
7. Conditions for provision of subsidy
(1) Businesses:
(i) Companies who will establish new plants, or expand or transfer existing
plants to industrial parks.
(ii) Companies who will establish parks around their plants.
(2) Projects eligible for subsidies:
Companies building new plants or expanding existing plants as above.
(3) Costs covered by subsidy:
Land, buildings or depreciable property as stipulated in Article 341 of the Local Tax
Law.
(4) Standard subsidy:
A maximum of 2/3 of the costs for which loan is extended, or a maximum of
¥200 million (¥1 billion for specially-approved cases).
(5) Ratio of subsidy (deposit ratio):
1/2.
8. Period of provision of subsidy
From fiscal 1993 through fiscal 1995
9. Statistics showing effect of subsidy on trade
No statistics are available.
6.5. Subsidy for establishment in Takeuchi Industrial Park
Private enterprises in manufacturing industries including software industries are automatically
eligible for this subsidy when they establish their plants or offices in Takeuchi Industrial Park in
Sakaiminato City.
Industries (products) covered:  Manufacturing industries
1. Name of subsidy
Tottori Prefecture Sakai-Minato Takeuchi Industrial Park business relocation subsidy.
2. Type of subsidy
Grant
3. Legal grounds
Regulations for the provision of Tottori Prefec ture subsidies, and Tottori Prefecture Sakai-
Minato Takeuchi Industrial Park business relocation subsidies.
4. Amount of subsidy (units:  ¥1,000)
No subsidies have been provided to date.G/SCM/Q2/JPN/17
Page 16
5. Amount of subsidy per unit product
Not possible to calculate (since subsidies are provided for capital investment).
6. Policy objectives
To relocate industry to the Sakai-Minato Takeuchi Industrial Park, and promote sound
development of the regional economy and increase local employment opportunities.
7. Conditions for provision of subsidy
(1) Businesses:
Companies inside or outside of this prefecture who will establish or expand plants or
business facilities in Sakai-Minato Takeuchi Industrial Park.
(2) Projects eligible for subsidies:
The construction of new plants or the expans ion of existing plants by companies who
are engaged in manufacturing, power generation, gas supply, software development,
research in natural science, and transportation.
(3) Costs covered by subsidy:
Cost of acquiring the land.
(4) Standard subsidy:
Should generate at least 10 new jobs.
(5) Ration of grant:
(Cost of acquiring the land) x 20 per cent.
8. Period of provision of subsidy
From fiscal 1986 through fiscal 1995.
9. Statistics showing effect of subsidy on trade
No statistics are available.
7. GUNMA
7.1 Prefectural Subsidy for Establishment of Enterprise
Private enterprises in manufacturing industries are automatically eligible for this subsidy
when they establish their plants or offices in Gunma Prefecture.
Industries (products) covered:  Manufacturing industries and facilities used for texts/research for
manufacturing
1. Name of subsidy
Subsidy for attracting businesses.
2. Type of subsidy
GrantG/SCM/Q2/JPN/17
Page 17
3. Legal grounds
Gunma Prefectural ordinance for attracting businesses.
4. Amount of subsidy (units:  ¥1,000)
¥81,950 (in fiscal 1995).
5. Amount of subsidy per unit product
Not possible to calculate (since standards for calculating subsidies are based on site area and
fixed investments).
6. Policy objectives
To help revitalize the prefectural economy, promote balanced development in the region, and
improve the lives of citizens in the prefecture by attracting leading businesses who can play a
significant role in developing the prefectural economy in order to develop its manufacturing
industries.
7. Conditions for provision of subsidy
(1) Businesses:
Companies
(manufacturers)Projects eligible for subsidies Method to calculate subsidies Max. amount
(2) Projects eligible 
for subsidies:Tree planting project ¥3,000/m2 x [greening area] ¥50 million
Establishment of environmental
protection facilities¥3,000/m 2 x [area for environmental
protection facilities]¥50 million
(3) Costs covered 
by subsidy:Establishment of pollution
prevention facilities(Cost of project - earmarked revenue) x
0.75¥50 million
(4) Standard
subsidy:Development of small and medium-
sized companies in the prefecture¥2.5 million/company (orders of ¥5
million or more a year)
¥5.0 million/company (orders of
¥10 million or more a year)¥50 million
(5) Ratio of grant:Designation as leisure facility in the
prefecture¥500,000/facility ¥5 million
8. Period of provision of subsidy
From fiscal 1985 through fiscal 1996 (abolished).
9. Statistics showing effect of subsidy on trade
No statistics are available.G/SCM/Q2/JPN/17
Page 18
8. IWATE
8.2 Prefecture industrial location promotion funds
Private enterprises are automatically eligible fo r this loan when they invest ¥100 million or
more in their plants and equipments, and employ 10 or more people in Iwate Prefecture.
Industries (products) covered:  Not specified
1. Name of subsidy
Regional comprehensive development fund.
2. Type of subsidy
Loan
3. Legal grounds
Guidelines for the allocation of Iwate Prefecture regional comprehensive development fund.
4. Amount of subsidy (units:  ¥1,000)
For fiscal 1995:  ¥64,115.
5. Amount of subsidy per unit product
Not possible to calculate, since loans are not restricted to manufacturing industries, and funds
equivalent to 20 per cent of the cost of the project are loaned, and amount of loan differs for each
project.
6. Policy objectives
The prefectural office will support creative private projects with long-term interest-free loans in
cooperation with Japan Foundation for Regional Vitalization and financial institutions, and thus
further the establishment of lively and attractive communities.
7. Conditions for provision of subsidy
(1) Businesses:
Corporations, limited companies, corporations established under Article 34 of Civil
Law, and other corporations.
(2) Projects eligible for subsidies:
Those projects which are covered by the Plan for Regional Development Using
Private Initiation Project  established by the prefectural office, and satisfy thefollowing conditions.  (1) the projects meet the public need, and profitability is low;
(2) the project will create at least 10 new jobs;  (3) the total capital investment (cost
of acquiring land excluded) is at least ¥100 million;  (4) projects are not planned to be
sold to a third party;  and facilities will not be used for business that may affect public
morals.
(3) Costs covered by subsidy:
The total amount of capital investment.
(4) Standard of subsidy:G/SCM/Q2/JPN/17
Page 19
(5) Ratio or grant:
20 per cent or less.
8. Period of provision of subsidy
From fiscal 1989 through 1996.
9. Statistics showing effect of subsidy on trade
No statistics are available.
9. NIIGATA
9.1 Subsidy for the support of technological development
The coverage provided by this subsidy ar e for small and medium-sized enterprises in
manufacturing industries located in Nigta Prefecture.
Industries (products) covered:  Small and medium-sized companies
1. Name of subsidy
Skill development support subsidy.
2. Type of subsidy
Grant
3. Legal grounds
Guidelines for provision of subsidies to support the development of dreams, skills and crafts in
Niigata Prefecture.
4. Amount of subsidy (units:  ¥1,000)
¥92,175
5. Amount of subsidy per unit product
Not possible to calculate, since products are diversified and some projects do not necessarily
result in products.
6. Policy objectives
To assist small and medium-sized companies with development of new products or new
technology.
7. Conditions for provision of subsidy
(1) Businesses:
Small and medium-sized companies.
(2) Projects eligible for subsidies:G/SCM/Q2/JPN/17
Page 20
Projects supporting general technology
(3)  Costs covered by subsidy:
Cost of raw materials, machinery and equipment and tools and apparatus.
(4) Standard subsidy:
Projects should be related to R&D, advanced technology, etc.
(5) Ratio of grant:
1/2.
8. Period of provision of subsidy
From fiscal 1990 through fiscal 1996.
9. Statistics showing effect of subsidy on trade
No statistics are available.
9.2 Subsidy for the promotion of enterprise location in Toko Industrial Zone
Private enterprises are automatically eligible for this subsidy when they establish their plants or
offices in the Higashikou Industrial Zone of Niigata Prefecture.
Industries (products) covered.  Not limited
1. Name of subsidy
Niigata Prefecture Niigata Higashi Port Industrial Zone business relocation subsidy.
2. Type of subsidy
Grant
3. Legal grounds
Guidelines for provision of Niigata Prefecture Niigata Highashi Port Industrial Zone business
relocation subsidy.
4. Amount of subsidy (units:  ¥1,000)
No subsidies have been granted to date.
5. Amount of subsidy per unit product
Not possible to calculate, since subsidy is provided for capital investment, capital investment
patterns are diversified, and industries covered are also diversified, making it impossible to identify
specific products.
6. Policy objectives
To promote industrial relocation to Niigatai Higashi Port Industrial Zone.G/SCM/Q2/JPN/17
Page 21
7. Conditions for provision of subsidy
(1) Businesses:
Manufacturers
(2) Projects eligible for subsidies:
Companies who will acquire new sites in Niigata Higashi Port Industrial Zone from
the prefectural office, and construct plants there.
(3) Costs covered by subsidy:
Costs of establishing plants.
(4) Standard subsidy:
[Total floor space (m2) of the building] by ¥7,500/m2 (¥15,000/m2 for companies
outside the prefecture) - [number of full-time jobs created x ¥300,000].
(5) Ration of grant:
8. Period of provision of subsidy
From fiscal 1984 through fiscal 1996.
9. Statistics showing effect of subsidy on trade
No statistics are available.
10. AKITA
10.1 Funds for securing and labour force of SME's
(Funds for Securing the Labour Force of SME's)
Small and medium-sized enterprises in Akita Prefecture are automatically eligible for this loan.
Industries (products) covered:  Small and medium-sized companies
1. Name of subsidy
Loan of funds to recruit talented people for small and medium-sized companies.
2. Type of subsidy
Loan
3. Legal grounds
Guidelines for the system of extending loans to strengthen the financial structure of small and
medium-sized companies in Akita Prefecture.
4. Amount of subsidy (units:  ¥1,000)
For fiscal 1994:  ¥6,800.
5. Amount of subsidy per unit product
Not possible to calculate.G/SCM/Q2/JPN/17
Page 22
6. Policy objectives
To extend loans to small and medium-sized companies so that they can recruit talented people.
7. Conditions for provision of subsidy
(1) Businesses:
Small and medium-sized companies.
(2) Projects eligible for subsidies:
Funds for business operation.
(3) Costs covered by subsidy:
Funds for equipment and working capital.
(4) Standard subsidy:
Those companies who have been in business for one year or more in principle in the
prefecture, and who are described in Article 2 of the Small and Medium Enterprise
Credit Insurance Law and those who are described as firms eligible for loans inArticle 9.2 of the guidelines.
(5) Ratio of grant:
3.4 per cent.
8. Period of provision of subsidy
From fiscal 1990 through fiscal 1994.
9. Statistics showing effect of subsidy on trade
No statistics are available.
10.2 Funds for improving the management of SME's
Small and medium-sized enterprises in Akita Prefecture are automatically eligible for this loan.
Industries (products) covered:  Small and medium-sized companies
1. Name of subsidy
Loan of funds to help improve business for small and medium-sized companies.
2. Type of subsidy
Loan
3. Legal grounds
Guidelines for the system of extending loans to improve business for small and medium-sized
companies in Akita Prefecture.
4. Amount of subsidy (units:  ¥1,000)
¥56,886G/SCM/Q2/JPN/17
Page 23
5. Amount of subsidy per unit product
Not possible to calculate, since products are diversified.
6. Policy objectives
To loan funds needed to improve business operations to small and medium-sized companies,
and make available guidelines on how to improve business, in order to support sound business
development.
7. Conditions for provision of subsidy
(1) Businesses:
Small and medium-sized companies (types of industry not specified).
(2) Projects eligible for subsidies:
Funds for business operations.
(3) Costs covered by Subsidy:
Funds for equipment and working capital.
(4) Standard subsidy:
Those companies who have been in business for one year or more in principle in the
prefecture.
(5) Ratio of grant:
0.6 per cent.
8. Period of provision of subsidy
From fiscal 1973-
9. Statistics showing effect of subsidy on trade
No statistics are available.
10.3 Funds for the promotion of small scale enterprise
Small-sized enterprises in Akita Prefecture are automatically eligible for this loan.
Industries (products) covered:  Small projects
1. Name of subsidy
Loan of funds to help small projects.
2. Type of subsidy
Loan
3. Legal grounds
Guidelines for the system of financing Akita Prefecture Small Projects Development Fund.G/SCM/Q2/JPN/17
Page 24
4. Amount of subsidy (units:  ¥1,000)
¥35,652
5. Amount of subsidy per unit product
Not possible to calculate.
6. Policy objectives
To loan funds needed to improve business operations to small projects, and make available
guidelines on improving business operations, in order to support their development.
7. Conditions for provision of subsidy
(1) Businesses:
Small Projects etc. (types of industry are not specified).
(2) Projects eligible for subsidies:
Funds for business operations.
(3) Costs covered by subsidy:
Working capital.
(4) Standard subsidy:
Number of regular employees is 20 or less.
(5) Ratio of grant:
0.6 per cent.
8. Period of provision of subsidy
From fiscal 1961-
9. Statistics showing effect of subsidy on trade
No statistics are available.
10.4 SME'S short-term operating funds
Small and medium-sized enterprises in Akita Prefecture are automatically eligible for this loan
for operating funds.
Industries (products) covered:  Small and medium-sized companies
1. Name of subsidy
Short-term business loan for small and medium-sized companies.
2. Type of subsidy
LoanG/SCM/Q2/JPN/17
Page 25
3. Legal grounds
Guidelines for the system of allocating Akita Pr efecture short-term business loans for small and
medium-sized companies.
4. Amount of subsidy (units:  ¥1,000)
¥12,568
5. Amount of subsidy per unit product
Not possible to calculate due to the nature of the business.
6. Policy objectives
To make it easier to obtain short-term busines s loans by small and medium-sized companies in
the prefecture, and contribute to stabilization of business operations through sound management.
7. Conditions for provision of subsidy
(1) Businesses:
Small and medium-sized companies (types of industries are not specified).
(2) Projects eligible for subsidies:
Funds for business operations.
(3) Costs covered by subsidy:
Working capital.
(4) Standard subsidy:
Those companies who have been in business for one year or more in principle in the
prefecture.
(5) Ratio of grant:
0.8 per cent.
8. Period of provision of subsidy
From fiscal 1979-
9. Statistics showing effect of subsidy on trade
No statistics are available.
10.5 Financial aid for the promotion of regional location
Private enterprises are automatically eligible for this loan when they establish their plants or
offices in Akita Prefecture.
Industries (products) covered:  Manufacturing industries, etc.
1. Name of subsidy
Industry Relocation Loan Fund.G/SCM/Q2/JPN/17
Page 26
2. Type of subsidy
Loan
3. Legal grounds
Guidelines for allocation of Akita Prefectural industry relocation fund.
4. Amount of subsidy (units:  ¥1,000)
¥56,250
5. Amount of subsidy per unit product
Calculation on a unit basis is impossible, since loan is extended to manufacturing industries and
products are diversified.
6. Policy objectives
To promote industrial relocation and facilitate development/modernization of manufacturing
industries.
7. Conditions for provision of subsidy
(1) Businesses:
Companies
Fiscal 1994 Fiscal 1995
Electronic parts
Mechanical & metals industry4
13
2
Lumber industry 1 1
Food manufacturing industry  1 1
(2) Projects eligible for subsidies:
Companies constructing new plants or expanding existing plants.
(3) Costs covered by subsidy:
Cost of acquiring the site, cost of buildings and equipment, machinery and apparatus,
furnishings, drainage system, electrical and other facilities.
(4) Standard subsidy:
Investment should be ¥100 million or more and a specified number of new jobs
should be created (reference is made to the guidelines).
(5) Ratio of grant:
1.25 per cent.
8. Period of provision of subsidy
From fiscal 1981-G/SCM/Q2/JPN/17
Page 27
9. Statistics showing effect of subsidy on trade
No statistics are available.
10.6 Financial Aid for Equipment Modernization
Small  and medium-sized enterprises in Akita Pref ecture are automatically eligible for this loan
for equipment modernization.
Industries (products) covered:  Small and medium-sized companies
1. Name of subsidy
Loan of funds for modernization of facilities for small and medium-sized companies.
2. Type of subsidy
Loan.
3. Legal grounds
Law on Financial and Other Assistance for Small Business Modernization, and guidelines for
allocating funds for modernization of facilities for small and medium-sized companies in AkitaPrefecture.
4. Amount of subsidy (units: ¥1,000)
¥12,580
5. Amount of subsidy per unit product
Not possible to calculate, since industries receiving loans are diversified.
6. Policy objectives
To facilitate modernization of facilities for small and medium-sized companies.
7. Conditions for provision of subsidy
(1) Businesses:
Small and medium-sized companies.
(2) Projects eligible for subsidies:
Acquisition of equipment.
(3) Costs covered by subsidy:
Cost of acquiring equipment.
(4) Standard subsidy:
Small and medium-sized companies with up to 100 employees, and with loan
balances not exceeding a specified level.
(5) Ratio of grant:
3.4 per cent.G/SCM/Q2/JPN/17
Page 28
8. Period of provision of subsidy
From fiscal 1956-
9. Statistics showing effect of subsidy on trade
No statistics are available.
10.7 Equipment Leasing Programme
Small and medium-sized enterprises in Akita Prefecture are automatically eligible for this loan
for equipment leasing.
Industries (products) covered:  Small and medium-sized companies
1. Name of subsidy
Loan of funds needed to rent equipment.
2. Type of subsidy
Loan.
3. Legal grounds
Funds needed to rent equipment for small and medium-sized companies which are described in
Article 3.1.2 of the Law on Financial and Other Assistance for Small Business Modernization.
4. Amount of subsidy (units: ¥1,000)
¥525
5. Amount of subsidy per unit product
Not possible to calculate.
6. Policy objectives
To promote modernization of facilities for small and medium-sized companies, to support
development of their business.
7. Conditions for provision of subsidy
(1) Businesses:
Small and medium-sized companies.
(2) Projects eligible for subsidies:
Equipment rental business for small and medium-sized companies run by Prefecture
Small and Medium Enterprises Promotion Public Corporation.
(3) Costs covered by subsidy:
Cost of acquiring or leasing equipment.G/SCM/Q2/JPN/17
Page 29
(4) Standard subsidy:
Companies who satisfy the leasing conditions.
(5) Ratio of grant:
0.15 per cent.
8. Period of provision of subsidy
From fiscal 1956-
9. Statistics showing effect of subsidy on trade
No statistics are available.
11. NARA
11.1 Funds for the General Development of the Region
Private enterprises are automatically eligible for this loan when they employ ten people or more
on their new projects in Nara Prefecture.
Industries (products) covered:  Not specified
1. Name of subsidy
Loan of funds for comprehensive regional development.
2. Type of subsidy
Loan (interest-free).
3. Legal grounds
Guidelines for allocation of loans for comprehensive regional development in Nara Prefecture.
4. Amount of subsidy (units: ¥1,000)
Amount of loan for fiscal 1995:  ¥320 million.Prefectural borrowing rate:  3.41 per cent.  Interest on loan:  0 per cent.  Actual subsidy:
¥11 million/year.
5. Amount of subsidy per unit product
Not possible to calculate, since loan is not extended to specific industries or products.
6. Policy objectives
To support activities of private projects which contribute to regional development in order to
revitalize the regional economy.G/SCM/Q2/JPN/17
Page 30
7. Conditions for provision of subsidy
(1) Businesses:
Private companies that create ten or more new jobs.
(2) Projects eligible for subsidies:
Projects which are covered by the plan to utilize private sector capabilities for
regional development.
(3) Costs covered by subsidy:
Capital investment.
(4) Standard subsidy:
Max. 20 per cent of total borrowing related to projects eligible for loans.
(5) Ratio of grant:
8. Period of provision of subsidy
From fiscal 1989-
9. Statistics showing effect of subsidy on trade
No statistics are available.
12. NAGASAKI
12.1 Plant Establishment Funds
Private enterprises in manufacturing industries are automatically eligible for this subsidy when
they establish their plants or offices in Nagasaki Prefecture.
Industries (products) covered:  All manufacturing industries
1. Name of subsidy
Subsidy for building related facilities for plants.
2. Type of subsidy
Grant.
3. Legal grounds
Ordinance to encourage establishment of plants in Nagasaki Prefecture.
4. Amount of subsidy (units: ¥1,000)
No subsidies were provided because the programme was discontinued on 22 July 1994.
5. Amount of subsidy per unit productG/SCM/Q2/JPN/17
Page 31
6. Policy objectives
To encourage industries to relocate to this prefecture.
7. Conditions for provision of subsidy
(1) Businesses:
Manufacturers.
(2) Projects eligible for subsidies:
Projects to help establish related facilities other than production facilities for new
companies.
(3) Costs covered by subsidy:
Costs for above projects.
(4) Standard subsidy:
Within the limits of above costs.
(5) Ratio of grant:
Within 10/10 (within the budget limits).
8. Period of provision of subsidy
From fiscal 1962 through fiscal 1994.
9. Statistics showing effect of subsidy on trade
No statistics are available.
13. KUMAMOTO
13.1 Kumamoto Establishment Promotion Subsidy
Foreign-affiliated enterprises in manufacturing industries including software industries are
automatically eligible for this subsidy when they  establish their plants or offices in Kumamoto
Prefecture.
Industries (products) covered:  Manufacturing industries, software development companies and
natural science institutes
1. Name of subsidy
Kumamoto Prefecture industry relocation subsidy.
2. Type of subsidy
Grant.
3. Legal grounds
Guidelines for allocation of Kumamoto Prefecture industry relocation subsidies.
4. Amount of subsidy (units: ¥1,000)
For fiscal 1995:  ¥50,000.G/SCM/Q2/JPN/17
Page 32
5. Amount of subsidy per unit product
Not possible to calculate, since production has not started yet.
6. Policy objectives
To help companies that will have a ripple effect on the local economy and play a major role in
developing local industries to relocate to the prefecture, by providing subsidies, to help create
employment opportunities, contribute to balanced development of the prefectural economy andimprove the standard of living of local citizens.
7. Conditions for provision of subsidy
(1) Businesses:
Companies new to the prefecture (foreign-affiliated firms included).
(2) Projects eligible for subsidies:
Relocation of plants to Kumamoto Prefecture.
(3) Costs covered by subsidy:
Buildings and plant.
Machinery and equipment.
(4) Standard subsidy:
- 1 per cent of construction and equipment costs or the amount arrived at by
multiplying floor space in square metres by ¥10,000, whichever is larger.
- For foreign-affiliated companies, the amount arrived at by multiplying floor
space in square metres by ¥20,000.
(5) Ratio of grant:
As described in (4) above.
8. Period of provision of subsidy
From fiscal 1995-
9. Statistics showing effect of subsidy on trade
No statistics are available.
14. MIYAGI
14.1 Enterprise Establishment Promotion Subsidy
Small and medium-sized enterprises in all kinds of industries except agriculture-forestry-
fisheries in Miyagi Prefecture are automatically eligible for this subsidy.
Industries (products) covered:  All industries (except agriculture, forestry and fisheries)
1. Name of subsidy
Guarantee money subsidy conditional on Miyagi Prefecture.  Small firms' business stabilization
fund.G/SCM/Q2/JPN/17
Page 33
2. Type of subsidy
Subsidy for credit guarantee fee.
3. Legal grounds
Guidelines for provision of subsidy for guarantee money conditional on Miyagi Prefecture
small firms' business stabilization fund (support for restructuring).
4. Amount of subsidy (units: ¥1,000)
For fiscal 1995:  ¥636
5. Amount of subsidy per unit product
Not possible to calculate.
6. Policy objectives
To provide credit guarantee fees to small and medium-sized companies in the prefecture who
have borrowed from the small firms' business st abilization fund (support for restructuring) to
restructure their business operations, to encourage sound management by lightening the financialburden.
7. Conditions for provision of subsidy
(1) Businesses:
Small and medium-sized companies.
(2) Projects eligible for subsidies:
The system for allocating Miyagi Prefecture small firms' business stabilization fund.
(3) Costs covered by subsidy:
Credit guarantee fees which must be paid by companies who receive loans and who
Miyagi-ken Credit Guarantee Corporation has agreed to guarantee under the small
firms' business stabilization fund in accordance with guidelines for the system ofguaranteeing business stabilization funds.
(4) Standard subsidy:
The guarantee fee from which companies receiving loans are exempt is calculated as
0.2 per cent of the agreed loan amount per annum.
(5) Ratio of grant:
10/10 of the guarantee fee exempted by Miyagi Prefecture Credit Guarantee
Association as above.
8. Period of provision of subsidy
From fiscal 1994 through fiscal 1995 (abolished in fiscal 1996).
9. Statistics showing effect of subsidy on trade
No statistics are available.G/SCM/Q2/JPN/17
Page 34
15. FUKUOKA
15.1 Prefectural Grants for Specified Areas
Private enterprises in manufacturing industries including software industries are automatically
eligible for this subsidy when they establish their plants or offices in selected cities in Fukuoka
Prefecture.
Industries (products) covered:  Manufacturing industries, etc.
1. Name of subsidy
Fukuoka Prefecture small companies development fund.
2. Type of subsidy
Loan.
3. Legal grounds
Guidelines for each financing system (16 systems).
4. Amount of subsidy (units: ¥1,000)
¥42,000,926
5. Amount of subsidy per unit product
Not possible to calculate.
6. Policy objectives
To loan prefectural funds to small and medium-siz ed companies with low credit ratings in order
to support small companies who cannot raise their own funds.
7. Conditions for provision of subsidy
(1) Businesses:
Small and medium-sized companies, cooperative associations.
(2) Projects eligible for subsidies:
Basically, projects that are described in the Small and Medium Enterprise Credit
Insurance Law (manufacturing, mining, quarrying, lumber, construction, etc.).
(3) Costs covered by subsidy:
Funds for business operations (equipment/working capital).
(4) Standard subsidy:
Companies should have offices in the prefecture and be engaged in the same business
for a specified term.  Companies should have paid all required taxes.  Other standards
are stipulated in the guidelines for each fund.G/SCM/Q2/JPN/17
Page 35
(5) Max. loan amount:
¥5 million to ¥100 million.
8. Period of provision of subsidy
From fiscal 1957-
9. Statistics showing effect of subsidy on trade
No statistics are available.
15.2 Funds for Promotion of Enterprise Establishment
Small and medium-sized enterprises in all kinds of industries except agriculture-forestry-
fisheries in Fukuoka Prefecture are automatically eligible for this loan.
Industries (products) covered:  Manufacturing and software development
1. Name of subsidy
Industry relocation subsidy for specified regions.
2. Type of subsidy
Grant.
3. Legal grounds
Guidelines for provision of industry relocation subsidies for specified regions.
4. Amount of subsidy (units: ¥1,000)
For fiscal 1995:  ¥117,472
5. Amount of subsidy per unit product
Not possible to calculate.
6. Policy objectives
To stabilize the economy in specified regions by relocating industry to the region.  (Specified
regions);  three regions (Kita-kyushu, Omuta and Nogata).  (Industries covered);  manufacturing andsoftware development.
7. Conditions for provision of subsidy
(1) Businesses:
Manufacturing and software development companies.
(2) Projects eligible for subsidies:
Manufacturing and software development companies.G/SCM/Q2/JPN/17
Page 36
(3) Costs covered by subsidy:
Floor space of production facilities.
(4) Standard subsidy:
Floor space of production facilities:  1,000m2 or more.
Number of local jobs created:  ten or more.
(5) Ratio of grant:
¥3,000/m2 of the floor space of production facilities.
8. Period of provision of subsidy
From fiscal 1987 through fiscal 1997.
9. Statistics showing effect of subsidy on trade
No statistics are available.
16. ISHIKAWA
16.1 Subsidy for Location of High-Technology
(Subsidy for the Location of Technology-Intensive Manufacturing)
Private enterprises which utilize high-technology in manufacturing industries are automatically
eligible for this subsidy when they establish their plants or offices in Ishikawa Prefecture.
Industries (products) covered:  Leading-edge industries
1. Name of subsidy
Industry relocation subsidy for leading-edge industries.
2. Type of subsidy
Grant.
3. Legal grounds
Ordinance for subsidies for relocating frontier industries to Ishikawa Prefecture.
4. Amount of subsidy (units: ¥1,000)
For fiscal 1995:  ¥629,000
5. Amount of subsidy per unit product
Not possible to calculate, since subsidy is allocated based on cost of fixed assets.
6. Policy objectives
To support diversification/development of industry and increase employment opportunities.G/SCM/Q2/JPN/17
Page 37
7. Conditions for provision of subsidy
(1) Businesses:
Manufacturing companies.
(2) Projects eligible for subsidies:
Leading-edge industries (manufacturing or processing projects in which advanced
technology or similar knowledge-intensive technology is applied to whole or part ofthe production or manufacturing process, and tests, research, provision of information
and other projects in relation to main project).
(3) Costs covered by subsidy:
Fixed assets (land, buildings and depreciable assets).
(4) Standard subsidy:
Fixed assets of ¥300 million or more.  There should be at least 20 regular employees.
(5) Ratio of grant:
Plants:  whichever is lower, either (amount of fixed assets) x 5/100 or ¥1 billion.
Research institutes:  whichever is lower, either (amount of fixed assets) x 20/100 or
¥1 billion.
8. Period of provision of subsidy
From fiscal 1983 through fiscal 1996.
9. Statistics showing effect of subsidy on trade
No statistics are available.
16.2 Subsidies for Encouraging Investment in Core Noto
Private enterprises are automatically eligible for this subsidy when they establish their plants or
offices in the Core Noto Industrial Park in Ishikawa Prefecture.
Industries (products) covered:  Manufacturing industries
1. Name of subsidy
Noto Central Industrial Park business relocation subsidy.
2. Type of subsidy
Grant.
3. Legal grounds
Guidelines for allocation of Noto Central Industrial Park business relocation subsidies.
4. Amount of subsidy (units: ¥1,000)
For fiscal 1995:  ¥75,767G/SCM/Q2/JPN/17
Page 38
5. Amount of subsidy per unit product
Not possible to calculate, since subsidy is allocated based on cost of fixed assets.
6. Policy objectives
To assist in relocating industry to Noto Central Industrial Park.
7. Conditions for provision of subsidy
(1) Businesses:
Manufacturing companies.
(2) Projects eligible for subsidies:
Cost of acquiring site, construct buildings, and purchasing equipment.
(3) Costs covered by subsidy:
Fixed assets (land, buildings and equipment).
(4) Standard subsidy:
Site in Noto Central Industrial Park should be secured by 31 March 1996.  Operationshould start within three years after site is secured.  There should be 20 or more
regular employees.
(5) Ratio of grant:
Maximum 1/2 of costs of acquiring site (max ¥200 million).
8. Period of provision of subsidy
From fiscal 1981 through fiscal 1995.
9. Statistics showing effect of subsidy on trade
No statistics are available.
QUESTIONS FROM THE EC9
C. SECTOR SPECIFIC SUBSIDIES
Q. Will Japan notify all subsidies which are specific, in law or in fact, to certain sectors?
2. Ishikawa - subsidy for the lo cation of high technology.
A. Japan will notify these subsidies.
                                                     
9G/SCM/Q2/JPN/10G/SCM/Q2/JPN/17
Page 39
QUESTIONS FROM THE US
Q. Please provide information concerning the following programmes which did not appear to
be included within Japan's notification, yet may meet the notification requirements of GATT
1994 and/or the SCM Agreement.  Please include information relevant to the elements
requested in the notification format, or explai n the basis on which Japan  determined that each
programme did not meet the notification requirements referenced above:
From 1995 Budget of the Government of Japan
Home financing corporation subsidy
A. Government Housing Loan Cor poration (GHLC) is a quasi gove rnmental body established by
the GHLC Act.  It loans money to individuals who obtain houses.  This subsidy is provided to the
GHLC and does not benefit any enterprises or industries.
Q. Subsidy of interest on leased housing construction for owners of farmland
A. This subsidy is to provide incentives for owners of farmland to transform farmland to
residential land in order to promote construction of houses for rent for family use.  This subsidy does
not provide benefit to agriculture.
1. Title
Subsidy of interest on leased housing construction for owners of farmland.
2. Period covered
FY1995-FY1997
3. Policy objective and purpose of the subsidy
In order to promote construction of houses for rent for family use, this subsidy provides
incentives for owners of farmland to transform farmland to residential land.
4. Background and Authority
Ministry of Construction.
5. Form
Low interest rates of loans to build a house for rent.
6. To whom and how the subsidy is provided
The programme is available to owners of farm land who are going to construct a house for rent
on their farmland.G/SCM/Q2/JPN/17
Page 40
7. Annual amount budgeted for the subsidy
FY1995 ¥6,425 million
FY1996 ¥6,210 million
FY1997 ¥6,188 million
8. Duration of the subsidy
Not defined.
9. Trade effects
N.A.
Q. Subsidy of housing and city maintenance public corporation
A. Housing and Urban Development Corporation (HUD) is a quasi governmental body established
by the Housing and Urban Development Corporation Act.  It supplies good quality houses mainly to
middle-class individuals who are selected under the due process.  This subsidy is provided to the
HUD and does not benefit any enterprise or industry.
Q. Special subsidy of ship building loan interest postponement
A. Special subsidy of ship building loan interest postponement is provided to shipping companies
for their purchasing international oceangoing vessels.  This subsidy is not provided to shipbuilding
industries and it has no direct and indirect effect of promoting the export of vessels or of reducing the
import of vessels.  This subsidy does not meet the notification requirement under the SCMAgreement.
Q. Japan broadcasting association subsidy
A. This subsidy is provided for Japan Broadcasting Corporation (NHK), which is a corporation for
public broadcasting established by Japan's Broadcast Law and is obliged to provide broadcasting for
public welfare.  Under Article 35 of Japan's Broadcast Law, this subsidy is granted by theGovernment of Japan to NHK for the purpose of international broadcasting ordered by the
Government of Japan under Article 33 of the Law.  Japan does not necessarily consider that this
subsidy meets the notification requirements under the SCM Agreement.  The budget for the subsidy
for FY 1988 is ¥1,966 million.
Q. Subsidy of employment transfer training
A. This subsidy is financed not by the Governmental budget but by employment insurance
premiums paid by employers and employees.
Labour Mobility Human Resources Development Subsidies:  the subsidies are provided to any
industries as long as they accord with the following conditions (1) or (2).
(1) The employers concerned should be those who trained their employees on the premise of
transfer in the form of either shukko, individua l introduction to another employer or redeployment
accompanying structural reform of business, on the basis of the plant to maintain employment, which
is to be submitted to and authorized by Public Employment Security Office, and whose business
activities should be in the category of (a) or (b) as below.G/SCM/Q2/JPN/17
Page 41
(a) A designated industry in which marked changes in domestic and foreign economic
conditions have caused remarkable surplus in the capacity for supplying products or
services, such a situation is likely to continue over a long period of time and,
accordingly, the risk is identified that establishments would be compelled to either
curtail the production or the scale of business activities, restructure the business or
discontinue, and that employment would hence considerably decrease.
(b) A designated industry in which marked changes in domestic and foreign economic
conditions have caused considerable decline in the supply of products or service, and
employment has been fairly reduced or is expected to reduce because recovery is
unlikely in the long term.
(2) The employers concerned should be either those who received workers from the
employers of (1), and trained them to be engaged in a new work, or those who redeploy their workers
at the structural reform of business and trained them to be engaged in a new work.
Q. Subsidy for guidance, supervision, etc. public housing construction
A. This subsidy covers part of the expenses borne by prefectural governments in order to guide and
supervise municipalities (cities, towns, villages) when they construct public houses.  This subsidy
does not provide support to any enterprise or industry.  Japan does not necessarily consider that this
subsidy meets the notification requirements under the SCM Agreement.
Q. Subsidy for improved guidance and supervision of housing zones
A. This subsidy covers part of the expenses of prefectural governments in order to guide and
supervise municipalities (cities, towns, villages) when they execute the Blighted Residential Area
Improvement Projects.  Japan does not necessarily consider that this subsidy meets the notification
requirements under the SCM Agreement.
Q. Subsidy for guidance and supervision for leased housing construction by farm land
owners, etc.
A. This subsidy covers part of the expenses of prefectural governments in order to guide and
supervise financial agencies.  Japan does not necessarily consider that this subsidy meets the
notification requirements under the SCM Agreement.
Q. Subsidy to promote suburb planning
A. This subsidy was abolished in 1994.  This subsidy was provided to local governments
constructing public facilities such as community cultural centres.  Japan does not necessarily consider
that this subsidy meets the notification requirements under the SCM Agreement.G/SCM/Q2/JPN/17
Page 42
Q. Interest subsidy of leasing line and transfer line construction expenses
A. Japan cannot identify "Interest Subsidy of Leasing Line and Transfer the Construction
Expenses" mentioned by the US.  More explanation from the US on this subsidy will help Japan
provide relevant information.
Q. Interest subsidy of financing by home owners to increase worker assets
A. Japan cannot identify "Interest Subsidy of Financing by Home Owners to Increase Worker
Assets" mentioned by the US.  More explanation from the US on this subsidy will help Japan provide
relevant information.
Q. Interest subsidy of regulated share of construction loans for new urban manufacturing
centres
A. This subsidy ended in 1994.  This subsidy was provided by the national Government to
prefectural governments constructing infrastructures su ch as ports, roads or residential homes for the
purpose of realizing a balanced use of national land.
Q. Publicly operated company finance corporation subsidy
A. This subsidy is provided to the Japan Finance Corporation for Municipal Enterprises in the form
of an interest subsidy.  Loan coverage by this Corporation are extended to construction projects by
local governments.  The beneficiaries of this subsidy are local governments and Japan does not
necessarily consider that this subsidy meets the notification requirements under the SCM Agreement.
From other source
Q. New Information Flowback Promotion Centre
A. This subsidy was provided in the 1994 and 1995 budgets to promote the flow of information to
regional areas and to correct the over-centralization of information in Tokyo.  The recipient of this
subsidy is Tokyo Metropolitan Film Association, which is a corporate juridical person.  The objectiveof the Association is to contribute to promoting convenience and public moral through public
advertisement utilizing medias such as films.  The amount of the subsidy in fiscal 1995 is
¥369 million.  Japan does not necessarily consider that this subsidy meets the notification
requirements under the SCM Agreement.
Q. Municipal Fibre-Optic Programme
A. This subsidy was provided in the fiscal 1995 budget to promote the implementation of
subscriber fibre-optic networks.  This subsidy was granted to the Telecommunications Advancement
Organization of Japan, which is a corporate body conducting R&D by itself and specially authorized
by the Government of Japan in order to establish a fund for promoting the implementation of
subscriber fibre-optic networks.  The amount of the subsidy in fiscal 1997 is ¥3 billion.  Japan does
not necessarily consider that this subsidy meets the notification requirements under the SCM
Agreement.G/SCM/Q2/JPN/17
Page 43
Q. Telework Centre
This subsidy was established in the fiscal 1994 budget and was granted by the Government of
Japan to subsidize some of the expenses borne by cities, towns and villages to implement telework
centres.  Through the use of advanced information and communications technology, such centres are
designed to enable a telecommuting system which does not require people to travel to work.  The
subsidy was to be spent on facilities and equipment, and on the acquisition of sites needed fortelework centres.  The total amount of subsidy provided by 1996 was ¥55,997 million.
The recipients of the subsidy are local government.  The Law on Basic Procedures for the
Proper Use of Subsidies and other related provisions define objective criteria concerning the
recipients of and conditions for granting the subsidy.  Japan does not necessarily consider that this
subsidy meets the notification requirements under the SCM Agreement.
Q. Pilot Model Project for a New Generation Communications Network
A. This subsidy was established in the first supplementary budget of fiscal 1993, and granted for
the purpose of promoting experiments on advanced integrated communications and broadcasting
service and developing possibilities for achieving the next generation of such integrated services.
Fibre-optic networks are attracting much interest, as integrated communications and broadcasting
networks for supporting the information society in th e future.  This subsidy is intended to facilitate
experiments in the Pilot Model Project for solving various issues concerning the use, legalframeworks and cost of advanced integrated communications and broadcasting services.
The subsidy is granted to the Experimental Centre, which is a public corporation, to cover 2/3
of the expenditures needed for the construction of facilities for the pilot model project for a new
generation communications network.  The amount of the subsidy in the fiscal 1994 was ¥2 billion.
No subsidy was granted in 1995.  Japan does not necessarily consider that this subsidy meets thenotification requirements under the SCM Agreement.
Q. Full Network Support Programme
A. The subsidy mentioned by the US does not exist, but there is a subsidy for "Large-Scale Two-
Way CATV (Full Network) R&D".  The subsidy is provided to the Telecommunications
Advancement Organization of Japan to cover expenditures for R&D on advanced communicationsand broadcasting technology R&D.  The amount of the subsidy in the fiscal 1994 was ¥1.55 billion.
The subsidy was abolished in 1996.  Japan does not necessarily consider that this subsidy meets the
notification requirements under the SCM Agreement.
Q. Sophisticated Image Communicat ions Technology R&D Programme
A. This subsidy is provided to the Telecommunication Advancement Organization of Japan in
order to cover expenditures for R&D on technology for realizing the sophisticated application of B-
ISDN.  The amount of subsidy for FY 1995 was ¥4.02 billion.  Japan does not necessarily consider
that this subsidy meets the notification requirements under the SCM Agreement.G/SCM/Q2/JPN/17
Page 44
Q. Broad-Band Digital Communication Radio System R&D Programme
A. Japan assumes that the "broad-band digital communication radio system R&D programme"
mentioned by the US refers to the "high-capacity digital radio communication system R&D
programme".  This subsidy is provided to th e Telecommunications Advancement Organization of
Japan in order to cover expenditures for R&D on High-Capacity Digital Communication Radio
System and Digital Radio Communi cation Access System.  The amount of subsidy for FY 1995 was
¥1.56 billion.  This subsidy was provided only in FY 1995.  Japan does not necessarily consider that
this subsidy meets the notification requirements under the SCM Agreement.
Q. Three Dimensional High-Definition Television Programming Technology R&D
Programme
A. The subsidy in question is not clear, but given that mention is made of a subsidy for
"Stereoscopic Hi-Vision Programming R&D", it was provided in fiscal 1993 for conducting R&D on
Stereoscopic Hi-Vision programming which is indispensable to the realization of Hi-Visionbroadcasting that is expected to be a future broadcasting technology.  The subsidy is provided to the
Telecommunications Advancement Organization of Japan.  Japan does not necessarily consider that
this subsidy meets the notification requirements under the SCM Agreement.
Q. Pollution Control Programme - specifically the Special Depreciation of Corporate Income
Tax to Promote Installation of Equipment for Anti-Pollution Measures
A. Special tax measure concerning Installation of Equipment for Anti-Pollution is provided to
corporations filling the blue return, which acquire and use business machinery and facility
contributing toward the prevention of environmental pollution and other public hazards.  This subsidy
is not limited to corporations that engaged in the qualified industry.
Q. Production and shipment of mechanical tools may apply for Employment Adjustment
Subsidies, which are granted to specific industrial categories under the Employment
Insurance Law to cope wi th the layoff of workers
A. This subsidy is financed not by the Governmental budget but by employment insurance
premiums paid by employers and employees.  Th e Employment Subsidies are applied to employers
and their subcontractors who have offered tempor ary leave, provided education and training, or
temporarily transferred employees to another company due to unavoidable reductions in business
activity attributable to business fluctuations and changes in the industrial structure.  These subsidies
cover part of the costs for temporary leave allowances, ordinary wages and wages for transferred
employees.
While these employers and subcontractors must belong to the industries designated by the
Minister of Labour, any industry can be designated in accordance with the following conditions:
- An industry of which the monthly average level of business activities, such as
production, in the most recent three months has been about 5 per cent lower or more than
that in the same period of a year ago, considerable number of establishments which are
categorized in the said industry are being compelled to curtail the scale of business
activities, and unlikely to recover for the moment, because of business fluctuations, the
change in industrial structure or other economic reasons.G/SCM/Q2/JPN/17
Page 45
- An industry of which the monthly average number of job offers, job entry or other
employment-related indicators, in the recent three months has been lower by about 5 per
cent or more than that in the same period of a year ago, and the considerable number of
establishments which are categorized in the said industry are being compelled to
decrease employment, which is unlikely to recover for the moment.
- The designation of the industries should be based on small or detailed groups of
industrial category of Japanese Standard Industrial Classification.
- The period of designation should be one year.  (If admitted as such, the period might be
extended by another year only.  In this case, the base year for the comparison of
production and employment should be the original one.)
- The industry concerned will be eligible for a target of designation six months after the
end of the extended period of designation.
The Ministry of Labour sets up the amount of supply in accordance with the following
standards.
- The employers and the subcontractors in the industries designated by the Minister of
Labour are subsidized for the costs of temporary leave allowances, ordinary wages and
wages for transferred employees.
- The ratio of subsidies:
(a) for temporary leave 1/2 (2/3)
(b) for education and training 1/2 (2/3)
(c) for temporary transfer of
employees to another company 1/2 (2/3)
* The figures in parentheses are the ration for employers of small and medium-
sized companies.
Q. Subsidies to promote the production of melons in Hokkaido
A. The programme mentioned by the US does not exist in Japan.
Q. Employment Subsidy Fund
A. We assume that the "Employment Subsidy Fund" mentioned by the US refers to the
"Employment Stabilization Fund".  The Employm ent Stabilization Fund is an advanced-funded
system in preparation for such situation wher e the amount of supply, such as the Employment
Adjustment Subsidies mentioned above, increases when business fluctuations become worse.
Therefore, this fund is not a subsidy.  It does not provide any benefit to specific enterprises or
industries either.G/SCM/Q2/JPN/17
Page 46
Q. Mechatronics Investment Promotion Tax System - Assistance to SMEs by way of
accelerated depreciation provisions and tax credits
A. Special depreciation or special credit in case of acquisition of facilities utilizing electronic
equipment is provided to natural persons whose number of full-time employees is less than
1,000 persons or small and medium-sized corporati ons, which means a corporation with a capital of
¥100 million or less, or a corporation with a capital whose number of full-time employees is less than1,000 persons (excluding a subsidiary of a large-scale corporation), as long as it can be classified to
22 industries which cover almost all manufacturing, construction and service.  Japan does not
necessarily consider that this subsidy meets the notification requirements under the SCM Agreement.
Q. Tax deduction for energy/recycling research
A. Tax reduction of the experiment and research expense concerning the technology for the
production of industrial goods contributing rationalization of use of energy and the like and utilization
of resources for recycling, which are approved business plans stipulated in the Law on TemporaryMeasures to Promote Business Activities for the Rational Use of Energy and the Utilization of
Recycled Resources, is provided to corporations filing the blue return.
10  Special depreciation of
machinery and facility contributing rationalization of use of energy approved business plans stipulated
in the above Law is provided to corporations filing the blue return.
Therefore, these subsidy programmes do not have to be notified under the SCM Agreement.
II. QUESTIONS ON NOTIFIED PROGRAMMES
A. Tax measures to strengthen the management of small and medium-sized corporations
Q. Could Japan provide additional information and clarification concerning the eligibility
criteria which must be met in order to benefit from the "Tax measures to strengthen the
management of small and medium-sized corporations".
Reply
Where qualified agricultural produce processors, prescribed by the Law for Temporary
Measures for Improvement of the management of Qualified Agricultural Produce Processing
Industries of whom those corporat ions whose plans for improvement of operation under the Law have
been approved by the same Law, acquire the machinery and facility provided by the said plans forimprovement of operation.
B. Could Japan clarify in greater detail to whom and how the subsidy programme for
"technopolis" is provided, e.g. what defines th e corporations engaged in the qualified high-
technology industries and what are those industries?  Please specify the "designated high
technology industrial development areas" referenced in the notification?
                                                     
10Blue Return.  The blue return system is a way of tax return.  Where taxpayers keep the proper
accounting records in accordance with the of ficial requirements, the application of the blue return is approved to
taxpayers by the Director of the Tax Office in their place for tax payment.  Taxpayers filing a blue return are
given certain tax privileges.G/SCM/Q2/JPN/17
Page 47
Reply
The following 24 industries are qualified:
1. Intermediate products of high-quality medical and agricultural chemical industry
2. Engineering plastic industry
3. Chemical fibre for translucent films industry
4. High-quality medicine industry5. Semiconductor material industry
6. Non-ferrous special alloy industry
7. High-performance machine and tool industry
8. High-performance special industrial machine industry
9. High-performance business machine and appliance industry
10. Precision mould, parts, and accessories industry
11. Industrial robot industry12. Servomotor and mini-sized motor industry
13. High-performance open-and-close machine, switchboard, and electric power control device
industry
14. Radio communication machine industry
15. Electronic appliance industry16. Electronic parts and devices industry
17. Solar battery, accessories and machine industry
18. Motor vehicle, parts and accessories industry
19. High-performance machine precisely to measure, to analyse, and to examine industry
20. High-performance optical instrument and lens industry21. Software industry
22. Industrial design industry
23. Machine design industry
24. Engineering industry
This subsidy programme is provided to corporations filing a blue return which engage in the
above industries in the high-technology industrial development areas.
__________