Tax incentives

Tax credits

In Japan it is possible for foreign SMEs to receive tax credits for a variety of expenses such as R&D costs.  JETRO provides an overview of incentives such as tax credits. Currently, these are targeting the following areas:

• strengthening local business facilities
• Regional Future Investment Promotion Taxation
• Preferential tax treatment for special zones
• Promotion of Digital Transformation (DX)
• Promotion of Environmental Energy & Carbon Neutral
• Promotion of Open Innovation and R&D
• Tax incentives for wage and productivity improvement

Regional and Prefectural Incentives

Tax incentives "for strengthening local business facilities" are available for companies opening or expanding headquarters functions (such as branch offices and research laboratories in local areas) outside of the Tokyo Metropolitan Area (with the exception of a few areas). Please visit the Incentives section of the JETRO website to consult the different types of local tax breaks and their prerequisites.

A full description of prefectural support to foreign companies relocating to Japan can be found in our Regions & Prefectures pages. JETRO also provides an in-depth presentation of regional and prefectural support in their website section entitled Regional Information.