Investment Guide

Subsidies

Aichi Prefecture Business Facility Investment Subsidy for Cutting-edge Sectors of the 21st Century

Purpose To support large scale investments in cutting-edge sectors
Eligible Business Sectors Aerospace, environment and new energy, health and longevity, information and communication, advanced materials, nanotechnology and biotechnology
Subsidy Rate (maximum amount) 10% (10 billion yen) *20% for research institutes
Remarks An application must be submitted at least 30 days prior to the start of construction. In addition to the above information, there are other conditions to what expenses are eligible for subsidies.

Aichi Prefecture Business Facility Investment Subsidy for Promising Industries (Type B)

Purpose To support small but promising investments in key segments of supply chains and growth industries
Eligible Business Sectors
  1. Automotive, aerospace, new energy and environmental, health and longevity, information and communications, and robotics sectors which meet the conditions of either (a) or (b):
    1. Involve irreplaceable parts or materials which are vital to the supply chain
    2. Companies or areas with high growth potential
  2. Product sectors vital for risk control against major infectious diseases
Subsidy Rate (maximum amount) 10% (1 billion yen)
Remarks An application must be submitted at least 30 days prior to the start of construction. In addition to the above information, there are other conditions to what expenses are eligible for subsidies.

Aichi Prefecture Business Facility Investment Subsidy for Promising Industries (Type C)

Purpose To support the expansion of software-based IT companies into Aichi
Eligible Business Sectors Software, information processing and provision service (excluding research industry, etc.), internet related service
Subsidy Rate (maximum amount) Office rent, equipment lease, telecommunication line fee, and office relocation/renovation expenses: half (50%) at maximum
Additional subsidies for hiring of IT engineers: 500,000 yen per person
Remarks An application must be submitted at least 30 days prior to the office lease contract. In addition to the above information, there are other conditions for attaining the subsidies such as those regarding the number of employees (IT engineers).

Aichi Prefecture Research and Development Subsidy

Purpose To support research and development as well as demonstration experiments conducted by companies and other organizations in business sectors with high growth potential
Eligible Business Sectors Growing next-generation businesses (e.g. next-generation vehicles, aerospace, environment and new energy, health and longevity, information and communication, robotics)
Subsidy Rates Large companies: half (50%) at maximum
Small and medium companies: two thirds (66.6%) at maximum
Remarks In addition to the above, there are other conditions such as expenses eligible for subsidies.

Tax Incentive

Business Facility Investment Tax Incentive (Real Estate Acquisition Tax Exemption and Reduction)

Eligible Business Sectors Manufacturing sector of the aerospace industry Manufacturing sectors of other industries
Eligible Districts (1) Districts of the Special Zone to Create Asia No. 1 Aerospace Industrial Cluster
or
(2) Industrial districts and districts for other specific purposes designated by the prefectural governor upon request by mayors of municipalities where the districts specified in (1) are located.
 Districts designated by the prefectural governor upon request by mayors of municipalities
Eligible Property Buildings Newly constructed buildings for eligible business purposes Newly constructed buildings on newly purchased or rented land
Land Newly purchased land, on which buildings are newly constructed within three years after purchase of the land
Amount to Be Reduced Total tax amount Large companies: Amount equivalent to half (50%) of total tax amount
Small and medium-sized companies: Amount equivalent to three-fourths (75%) of total tax amount

Industrial Sites (Land Owned by the Aichi Public Enterprise Bureau)

The Aichi Public Enterprise Bureau provides optimal sites that meet the needs of companies, as well as offering several preferential systems for the acquisition of industrial land.

Long-term Installment Plan for Repayment of Land Acquisition Fees

Installments Period Within 10 years (to be paid in 10 or fewer installments including the first payment)
Amount of the First Payment 10% or more of the total price agreed (to be paid within 15 days from the day following the date on which the agreement is made)
Division of the Installments Equal annual installments to cover the amount that remains after deducting the first payment from the total amount agreed to be paid (due each year by the anniversary date of the day the agreement was originally made)
Interest Rate on the Installments The Aichi Prefectural Bond interest rate (10-year bond) is applied (fixed interest rate)
*Please contact the Aichi Public Enterprise Bureau for the applicable interest rate.
Remarks
  • Ownership is transferred at the time of the first payment from the Aichi Public Enterprise Bureau to the acquisitor.
  • The Aichi Public Enterprise Bureau takes a first mortgage on the land for the balance of the contract amount minus the first payment amount, plus the total amount of interest.
  • Early redemption is possible.
  • Failure to meet the requirements may result in refusal of application.

Leasing System (not applicable to some districts)

Land Use Industrial, logistics, and commercial land
Type of Land Leasehold Leasehold for business-use land
Overview of the Land Lease System
  • This is a fixed-term land lease for the purpose of owning a building for business use.
  • The lease term is 10 to 20 years, and the land shall be returned to the borrower as a vacant lot after the expiration of the lease term.
Laws and Regulations Act on Land and Building Leases, Article 23, Section 2
Leasing Period 10-20 years
Contracting Method The contract must be notarized. (The borrower is responsible for the cost of preparation.)
Annual Leasing Fees Coastal-area land (selling price x 3%) + sum comparable to fixed assets tax
Chubu “Rinku” coastal area covering part of the artificial island hosting Chubu Centrair International Airport and its vicinity (selling price x 4.2%) + sum comparable to fixed assets tax
Revision of Leasing Fees Leasing fees are subject to revision every three years due to changes in social and economic conditions.
(Except for the Chubu “Rinku” coastal area)
Payment Method
  • One-twelfth of the annual rent, excluding taxes and other public charges, is to be paid by the end of the previous month (or by the 25th of each month in the case of account transfer) as the monthly rent.
  • For taxes and other public charges, the annual amount must be paid by the end of May each year.
Deposit Amount Monthly leasing fee x 12 to 24 months
Payment Method To be paid by the day before the start of the leasehold term
Provision of Contract During or upon expiration of the lease term, the land shall be sold at market value (appraised value) upon request of the borrower.
Remarks
  • In principle, the process of loan agreement conclusion follows that of a regular purchase agreement.
  • The construction plan must be prepared, which outlines the details of the construction of the factory or other facilities.
  • In the event of delay in the payment of leasing fees, a 14.5% annual damage fee will be charged.
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