In an attempt to entice foreign companies to establish regional headquarters or R&D centers in Japan to counteract its dwindling appeal as a business locale, the Japanese cabinet has approved a package of incentives. The new policy, which will be effective in April, entitles foreign firms that meet the requirements to receive a 20% tax deduction for five years. Under the requirements, the new headquarters or R&D center must operate in at least two other countries and have received investments of ¥100 million ($1.2 million). The companies would also benefit from a new five-percentage-point cut in Japan’s effective corporate tax. Under the policy, companies’ tax rates would be between 20.4% and 28.5%. In the next fiscal year, 15 regional headquarters and 15 R&D centers are expected to result from the incentives.

Source: Financial Times