G/SCM/Q2/JPN/64  
 
13 June 2014  
(14-3434)  Page: 1/4  
Committee on Subsidies and Countervailing Measures  Original: English  
 
 SUBSIDIES 
REPLIES TO QUESTIONS POSED BY THE UNITED STATES1 REGARDING THE NEW 
AND FULL NOTIFICATION OF JAPAN2 
The following communication, dated 10 June 2014, is being circulated at the request of the 
Delegation of Japan.  
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  Japan only notified nine local government subsidies programs in its most recent New 
and Full Subsidy Notification (G/SCM/N/253/JPN). However, publicly available 
information
3 appears to indicate that there may be other government support programs 
administered at the prefectural level that  appear to meet the requirements of a 
notifiable subsidy, including: 
 1  OSAKA 
1.1  Subsidy for Business Start-Up of Foreign-Capital Enterprise 
 We note that these incent ives are provided to "Foreign-affiliated companies 
(foreign capital rate: 1/3 higher) expanding into Osaka Prefecture through the 
establishment of a new headquarters or Asian base." 
1.2  Subsidy for Promotion of Investment 
 We note that these incent ives are provided to "SMEs that build or renovate 
factories or R&D facilities in a designated location." 
1.3  Kansai Innovation Comprehens ive Global Strategic Special Zone 
 We note that these incentives are provided to "New energy- and life sciences-
related companies with an approved business plan expanding into the 
prefectural Special Zone (Yumeshima, Sa kishima, and Hanshin Port district, 
surrounded by Osaka Station, Kita Os aka, and Kansai International Airport 
district)." 
1.4  Taxation System for Indu strial Accumulation Promotion 
 We note that these incentives are prov ided to "SMEs acquiring factories, R&D 
centers, warehouse premises, and land  in the Industrial Accumulation 
Promotion area and receiving preferential  treatment on acquisition provided by 
municipalities." 
                                               
1 G/SCM/Q2/JPN/63. 
2 G/SCM/N/253/JPN. 
3 http://www.jetro.go.jp/en/invest/region/basic/  G/SCM/Q2/JPN/64 
 
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  1.5  Support provided by Osaka Busi ness and Investment Center (O-BIC) 
 We note that these incent ives are provided to "Foreign-affiliated companies 
(when its foreign capital rate is 1/3 or higher) setting up their head office or 
branch in Osaka during the set period with support from O-BIC or local 
municipalities." 
2  KAGOSHIMA 2.1  Business Location Promotion Subsidy for Kagoshima 
 We note that these incentives are provid ed to "Manufacturing-, distribution-, 
information-, and communication-related, and R&D centers." 
2.2  Capital Investment Promotion Subsidy for Production in Kagoshima 
 We note that these incentives are prov ided to the "manufacturing" industry. 
2.3  Subsidy for Maintaining Specified Plant Facilities in Kagoshima 
 We note that these incentives are pr ovided to "Industrial water special 
processing facilities, special high-volta ge power distribution line facilities 
(22kV or higher)." 
2.4  Business Location Fund Loan 
 We note that these incentives are prov ided to "Manufacturing, distribution, 
information-, and communication-related, and R&D centers." 
2.5  Exemption from prefectural tax under th e ordinance and non-uniform taxation, etc. 
 We note that these incentives are provided to "Manufacturing, software 
business, and distribution." 
3  FUKUSHIMA 
3.1  Subsidies for Promotion of Strategic Enterprises (2011 to 2012) 
 We note that these incentives are provided to  
 
1. "Manufacturing factories and research laboratories for Environment and 
new energy-related industries, Commerc e and Agriculture-related industry 
cooperation, transportation machinery,  semiconductor-related industries   
2. Industries designated agglomeration in dustries in the Basic Plan agreed 
upon by the national government based on the Enterprise Location 
Promotion Law 
3. Enterprises specially approved by the governor." 
3.2  Fukushima Prefecture Enterprise Location Fund Loan System 
 We note that these incentives are prov ided to "Enterprises establishing new 
business at sites suitable for factories, in dustrial parks, or agri-industrial sites 
in Fukushima Prefecture, and those expand ing or relocating existing facilities 
to such sites." 
 G/SCM/Q2/JPN/64 
 
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  3.3  Loan program for Regional General Plant and Equipment Fund (Furusato Loan) 
 We note that these incentives are provided for "Expenses for Plant and 
Equipment Investment." 
 
3.4  Preferential Tax Measure 
 We note that these incentives are prov ided to entities whose "sum value of 
acquired industrial plant and equi pment should exceed 27 million yen." 
 
4  KANAGAWA 
4.1  Financial grant to promote new locations of foreign businesses 
 We note that the requirements for these incentives are  
 
1. "Applicant must be a foreign business with 100% foreign ownership that 
is planning to establish a new factory or laboratory within Kanagawa. 
2.  Applicant must be in the manufacturi ng or information technology sector. 
3.  Applicant must hire more than 5 new employees at a newly established 
facility, and at least 3 of these must  be either Japanese or permanent 
residents." 
4.2  Financing System for Supporting Industry Concentration 
 We note that the requirement for these incentives is "Applicants must be have 
an approved priority support proj ect or general support project." 
 Please provide full details on each of these an d any similar Prefecture-level subsidies, or 
explain why these programs are otherwise not notifiable. 
 
Reply 
 
1  OSAKA 
"Subsidy for Business Start-Up of Foreign-Capi tal Enterprise", "Subsidy for Promotion of 
Investment", "Kansai Innovation Comprehensive Gl obal Strategic Special Zone", "Taxation System 
for Industrial Accumulation Promotion" and "Su pport provided by Osaka Business and Investment 
Center (O-BIC)" do not limit access to an enterp rise or industry or group of enterprises or 
industries. The objective criteria or conditions governing the eligibility for, and the amount of, each of these subsidies are established by Osaka Prefecture which spells out the criteria and conditions 
in its ordinances. The eligibility is automatic and the criteria and conditions are strictly adhered to. 
Therefore, these subsidies are not "specific" under Article 2 and are not subject to the notification 
requirements under Article 25 of the SCM Agreement. 
 
2  KAGOSHIMA 
"Business Location Promotion Subsidy for Kagoshima", "Capital Investment Promotion Subsidy for 
Production in Kagoshima", "Subsidy for Maintaining Specified Plant Facilities in Kagoshima", 
"Business Location Fund Loan" and "Exemption from prefectural tax under the ordinance and non-uniform taxation, etc." do not limit access to an enterprise or industry or group of enterprises or industries. The objective criteria or conditions governing the eligibility for, and the amount of, 
these subsidies are established by Kagoshima Pr efecture which spells out the criteria and 
conditions in its ordinances. The eligibility is automatic and the criteria and conditions are strictly adhered to. Therefore, these subsidies are not "spe cific" under Article 2 and are not subject to the 
notification requirements under Article 25 of the SCM Agreement. 
 G/SCM/Q2/JPN/64 
 
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  3  FUKUSHIMA 
"Subsidies for Promotion of Strategic Enterprises", "Fukushima Prefecture Enterprise Location Fund 
Loan System", "Loan program for Regional Gene ral Plant and Equipment Fund (Furusato Loan)" 
and "Preferential Tax Measure" do not limit access to an enterprise or industry or group of 
enterprises or industries. The objective criteria or conditions governing the eligibility for, and the 
amount of, these subsidies are established by Fuku shima Prefecture which spells out the criteria 
and conditions in its ordinances. The eligibility is automatic and the criteria and conditions are 
strictly adhered to. Therefore, these subsidies are not "specific" under Article 2 and are not subject 
to the notification requirements under Article 25 of the SCM Agreement.  4  KANAGAWA 
"Financial grant to promote new locations of foreign businesses" and "Financing System for 
Supporting Industry Concentration" do not limit access to an enterprise or industry or group of enterprises or industries. The objective criteria or conditions governing the eligibility for, and the 
amount of, these subsidies are established by Kanagawa Prefecture which spells out the criteria 
and conditions in its ordinances. The eligibility is automatic and the criteria and conditions are strictly adhered to. Therefore, these subsidies are not "specific" under Article 2 and are not subject 
to the notification requirements under Article 25 of the SCM Agreement. 
  
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