EFRAG launches draft Sustainability Report Standards

22 Май 2022
Actual, EFRAG, ESEF, IFRS, Sustainability
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The European Financial Reporting Advisory Group (EFRAG) has released exposure drafts (ED) of the European Sustainability Reporting Standards (ESRSs). With this proposal, requirements are set out for European companies to report on various environmental, social and governance (ESG) topics including societal impacts, risks and opportunities.

The European Commission’s proposal for a Corporate Sustainability Reporting Directive (CSRD) envisages the adoption of the EU Sustainability Reporting Standards (ESRS). Regarding the latter, EFRAG was requested to assist the European Commission in establishing Sustainability Reporting Standards.

EFRAG, as a technical advisor, aims at providing relevant stakeholder information and analyses on sustainability and ESG subjects to the European Commission. This is done to inform the manner of ESRS adoption by the EU. EFRAG decided to launch the public consultation based on the exposure drafts created under the responsibility of the Project Task Force (PTF-ESRS).

A consultation period of 100 days has been launched with the deadline of 8 August 2022 wherein companies can comment on the draft and share relevant information. Incorporating the input and result from the public consultation together with the feedback on the exposure drafts, EFRAG will agree on the final set of draft ESRS to be submitted to the European Commission.

After further evaluations, the finalised version of the ESRS applies the new sustainability standards according to the disclosures made under the EU’s Corporate Sustainability Reporting Directive (CSRD). Bridging finance and sustainability, the ESRS promise to expand mandatory sustainability reporting to European companies as the ongoing drafts are a “journey towards a faithful representation of sustainability performance”.

EFRAG invites comments on all aspects of the draft ESRS and expects feedback no later than 8 August 2022.

Business Opportunities in Shandong Province’s Hydrogen Industry

02 Ноя 2021
China
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Hydrogen energy is the new priority in battling the pressing issues of climate change. China Hydrogen Energy Alliance predicts that this industrial development will result in a hydrogen energy market demand of 35 million tons by 2030 and that hydrogen energy will be 10% of the total energy supply in China by 2050. Shandong Province launched on June 18th 2020 the guidelines for the upcoming 10 years regarding the medium- and long-term development of the hydrogen industry. In this article we elaborate on the tactical choice for Shandong Province, discuss the goals of the development plan and look at the opportunities this upcoming industry can have for you.

 

 

Why Shandong?

Shandong Province (山东省) lies on the east coast of China. With a population of around 102 million and a coverage of 157 square kilometres of land, it is the 3rd largest economic powerhouse in China. Only the Jiangsu Province and the Guangdong Province trump the Shandong Province. Knowing the facts, there are three arguments that the Shandong Province published the hydrogen plan.

 

  • Shandong Province has a solid foundation for green hydrogen production. With the largest installed capacity of photovoltaic power, the 4th largest installed capacity of wind power in China, and 5.7 million kilowatts of nuclear power, Shandong has the foundation to produce green hydrogen in the future utilizing these new and green energy systems.

 

  • Shandong Province is one of the frontrunners in China in terms of chemical, metallurgical and energy industries. Originating from the rich petroleum and coal reserves, and decades of large-scale mining and investment in petro-and coal-chemical facilities, Shandong holds a unique advantage in producing hydrogen as a by-product of fossil-powered industries. This so-called grey hydrogen is produced around 2.6 million tons annually in the Shandong Province, resulting in an opportunity for large-scale utilization with comparably low costs and maintaining high quality.

 

  • Shandong has deep collaboration with research institutes and leading universities across the country. More than 50 enterprises and research institutes in Shandong have been involved in the hydrogen industry and combine powers to make significant progress in aspects such as key materials, core components of fuel cells (FCs), system integration, high-end and efficient energy storage and more.

 

 

Goals

The plan argues to establish Shandong in the leader position in hydrogen development. Aspects under this denominator are constructing hydrogen and Fuel Cells (FC) demonstration zones by strengthening innovation and research, accelerating hydrogen applications and demonstrations, improving the manufacturing on the equipment level, as well as building and maintaining the industrial chain and ecology. This plan consists out of three stages.

 

 

 

Opportunities

The Rijksdienst voor Ondernemend Nederlands (RVO)  argues that there are opportunities on this market for companies and research institutes who “have developed advanced technologies and/or products for the hydrogen industry”. To carry out a joint venture in Shandong, strong R&D and innovation capabilities can be helpful. While Shandong has the competitive advantages in the production of grey hydrogen from their industrial activities, large-scale mining and coal and petroleum reserves, the main flow of innovation and R&D, is found in external institutions outside the province and even outside the country. Resulting in heavy dependence on these institutes. However, and obvious from their reliance, Shandong is openly welcoming new international parties, starting fruitful cooperation’s, and welcoming hydrogen talents. Shandong Province will keep focussing on strengthening their relation, cooperation and exchange with international organisations such as International Hydrogen Energy Association and the International Hydrogen Energy Commission. Further, Shandong enterprises will be encouraged to set up R&D platforms and create joint ventures (JV’s) abroad to facilitate cooperation. To maintain Shandong’s position in the case of the hydrogen industry, Shandong proposes to formulate standards for the hydrogen industry chain with the assistance of thorough cooperation with foreign standard organisations.

 

RVO argues about the major technical bottlenecks in the hydrogen industry. Acting upon these can enhance the Shandong hydrogen chain/systems and guarantee your place in the industry. Examples are hydrogen storage and materials for fuel cell vehicles (FV’s), fuel cell (FC) oil-free air compressor and/or hydrogen pump, transportation equipment, high-efficient production & storage & transportation of liquid hydrogen and pipeline transportation. Recommended sectors to adhere to are FC technology and application to commercial vehicles and equipment, green hydrogen technology utilizing solar, wind and nuclear energy in Shandong. To read all the bottlenecks and recommended sectoral perspectives, we kindly request to visit RVO.nl

For more information about personal advice regarding international business advice, tax situations or consolidation (in China), Global Connect Admin B.V. can assist you with these challenges due to the rich experience and framework of connections.

 

Source

https://www.rvo.nl/sites/default/files/2020/08/Report-on-Shandong-Hydrogen-Industry.pdf

 

Intellectual Property Rights (IPR) in China and the 15-year Plan.

25 Окт 2021
China

Are you planning to do business in China? One of the most important, but often forgotten, aspects is the protection of your intellectual property rights (IPR). Without this protection, others can copy your product or service and sell, import, or export these without your agreement. In this article, a real-life example is analysed, we discuss the need for IPR registration, recommend the best timeframe to register, and elaborate the 15-year IPR plan. All to prepare you for business in China.

 

Case study

In the China business week hosted by the Rijksdienst voor ondernemend Nederland (RVO), the commercial manager of Rymax Lubricants elaborates their relation with the Chinese property right system.

At the beginning of the establishment of the brand, the first step of business for Rymax Lubricants was not to expand to the Chinese market. However, they quickly were active on the Chinese market yet without their knowledge. Due to product previews and/or showcasing their products at events, Chinese fraudsters took immediate action. They registered the trademark of Rymax Lubricants with the Chinese government and duplicated everything: from the site and the logo to the complete mirroring of the advertisement video. The Chinese company behind the fake Rymax, sold their own oil while lifting on the European brand and success of Rymax.

After a long juridic battle, Rymax remained to have no power in China. Trying to take down the Chinese website or use their European intellectual property rights to tackle the stolen trademark also bore no success. After years of battling, Rymax changed their trademark, and thus the brand name, and immediately registered their intellectual property rights in China. Nowadays, Rymax Lubricants is active in the Chinese market and is having a fruitful business in China.

 

Should you register your intellectual property rights?

Registering for intellectual property rights is highly recommended when doing, or planning, to do business in China. In the case of registration, you can request websites with your products to go offline, request a court order, or cooperate with Chinese customs in the case of infringements.

According to the first-to-file system in China, your intellectual property is not protected if your property or patent is not registered to the official Chinese authorities. In the case of Rymax Lubricants, the lack of property rights in China shows the territorial nature of registration. Importantly, in China, the first to file is the owner of the intellectual property right, even while this is not the original owner or inventor of the service/ product. This is called a bad faith registration and happens because there are no user requirements to register for a trademark. Be aware to also register the following aspects of your company:

 

  • Production in China

When you are solely producing in China, it is recommended to register your trademark. Without trademark registration, there is an unnecessary risk and vulnerability that results in a higher probability of intellectual property infringement.

 

  • Copyrights

Registration of copyrights is theoretically unnecessary since they get automatically protected. However, to diminish challenges or disputes it is recommended to also register your copyrights.

 

  • Brand name

Besides registering your products, it is important to register your brand name. Here it is recommended to register your original brand name and the Chinese brand name of your product.

 

When to register?

To ensure that you are in charge of your intellectual property, you should register the aforementioned aspects before making your product or service public. This entails before advertisements, selling your products/ service, or fairs. When this is not done in time and thus not registered by yourself but by someone else, registering in China is not possible anymore.

 

Remarks when registering

When registering, be aware of the following tips to make the registration process as smooth as possible:

 

  • Be aware that there are other regulations regarding intellectual property rights in Hong Kong, Macau and Taiwan. They have differingjuridical systems than in mainland China. Meaning that different protocols are present and that different intellectual property rights registration are needed in these regions.

 

  • Foreign appliers for registration (e.g. trademark, brand name) without a juridical presence in China need to apply via a local patent agent to successfully submit the registration request.

 

 

China’s 15-year plan

On September 22, the Chinese government announced the 15-year plan (2021-2035) to assist the development of intellectual property rights (IPR). The plan entails that the IPR protection becomes stricter, which results in a higher level of public satisfaction in the business branch, and thus a greater market value of IPR by 2025 for the Chinese market. By 2035, the IPR competitiveness within China will develop and rank among the top in the world as elaborated in the plan. The emphasis in building this IPR protection system and supporting the world-class business environment, encouraging motivation by the operating system of IPR in the market, convenient and beneficial system for the public and boosting the participation in the global IPR governance.

 

Conclusion

With this article, we hope to have you sufficiently informed about the complete picture around the Chinese trademark registration and the Intellectual property rights . As previously emphasised, and as seen in the case study, we highly recommend to not take the risks for disputes or infringements (especially in a foreign country). For more information about  If interested in personal advice regarding international business advice, tax situations or consolidation (in China), Global Connect Admin B.V. can assist you with these challenges due to the rich experience and framework of connections.

 

 

Sources

China Business Week 2021 | Agenda (b2match.io)

China issues guideline for IPR development (www.gov.cn)

Intellectueel eigendom China | RVO.nl | Rijksdienst

From Beach Destination to Global Influential Trade Port: Hainan’s Masterplan

11 Окт 2021
China
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Hainan, the tropical destination on the south coast of China is more than a wedding island. Announced on June 1st this year, the Masterplan by the Chinese government is to transform the entire island province into China’s biggest special economic zone (SEZ). By 2025, this trade port is «basically» established and by 2035 this system will focus on the free and convenient flow of trade and investment. Whereas this results in global presence and influence, what does this Masterplan entail and what are the potentials for economic trade and welfare?

What is the Masterplan?

The Masterplan for the Hainan Free Trade Port (FTP) is aimed at the transformation of the southern island province into the flagship of trade ports. While already coined in 2017 as a concept, and approved by the province in 2018, the implementation of the FTP is currently ongoing. Moreover, one of the main aspects is that the FTP can easily cooperate and compete with the high-level ports of Hong Kong, Singapore and Dubai due to the international location. While the Hainan Free Trade Port is basically established in 2025, the maturing of the port will continue decades after the establishment. Here, the prospect is to establish a fully developed high-level free trade port including strong international influence around the year 2050. Bearing this in mind, there will be 4 major steps in the timeline for achieving different stages of development:

 

 

 

 

Hainan Free Trade Port policy highlights

For investors, the key policeis under the Masterplan yield the most importance weighting the opportunities that the Hainan FTP can provide. Therefore, a few policies will be highlighted to further explore the potentials Hainan can offer:

 

 

Taking the timeline and the benefits of the new Free Trade Port policies into account, the district of Hainan is an interesting development in the further globalisation of China. In the search for competitiveness among the high-level free trade ports such as Singapore and Hong Kong, the Masterplan for the Hainan Free Trade Port is aimed to be established in 2035 to fully realized these characteristics. The maturing of this FTP will continue until 2050, where Hainan should be established as a competing port with strong international influence. To optimize the potentials of the establishment of the Free Trade Zone (2025), and simultaneously the Free Trade Port (2035), we need to bear in mind that some industries have relatively more preferential support. According to RVO, the following industries will have these extra benefits in terms of taxation and restrictions within the Hainan Free Trade Port (see figure 2 points .2 & .3): Tourism — Modern service — New and High Tech — Retail (Duty-Free Consumer Goods) — Cruise and Yacht — Cultural and Sports — Education — Landscaping (Island loop Scenic Highway design) — Shipping — Air Transportation — Finance Lease — Offshore Trading — Modern Finance — ICT — Advanced Manufacturing — Medical Services and Pharmaceuticals — Oil, Gas and Chemicals — Deep Sea Technology — Modern Tropical Agriculture — Aerospace — Headquarter Economy.

 

Conclusion

Being aware of the potentials in the abovementioned sectors, the Hainan Free Trade Port can be seen as a good alternative to the Hong Kong, Singapore, and mainland China ports. With the international located position of the Hainan FTP, goods, people, and data can be easily transported to the mainland market due to the free flow in the first line and the efficient control at the second line. Whereas all the enterprises benefit from the full implementation of Zero-Tariffs on the entire island of Hainan and the increased duty-free shopping quota per person per year, the encouraged industries have competitive tax rates and exemption of duties when trading to mainland China in the case of Hainan processed goods having an added value of 30%. To conclude, the Hainan Free Trade Port is an interesting and encouraging development that should be followed closely to further evaluate the potential investing prospects.

Do you have any questions regarding the new Hainan Free Trade Port, or want other vital information to do business successfully? Feel free to send us any questions our way; we would love to assist you.

 

Sources

China-Briefing

RVO

 

 

Accounting in China: The differences between Chinese GAAP and IFRS

27 Сен 2021
China, Cross-border, Europe, GAAP, IFRS
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With the opening of the Chinese economy to foreign investments in the past 40 years, China is transforming into a global economic hub. However, with the standardisation of business administration with the International Financial Reporting Standards (IFRS), foreign investors need to be cautious of the differences between the global IFRS and the local Chinese GAAP. In this article, these inconsistencies between IFRS and Chinese GAAP are getting analysed, as well as looking into the optimal preparation for this challenge.

 

To increase the foreign direct investment (FDI) into the Chinese economy, the Public Republic of China (PRC) implemented special economic zones (SEZs) to further develop towards the biggest global economy. Hence, on the business administration level, this inquires for own accounting rules referred to as the Chinese Accounting Standards (CAS) or the Chinese General Accepted Accounting Principles (Chinese GAAP). While the CAS is implemented to reduce financial fraud or to optimize China’s tax strategy, in an international context the function of IFRS is to streamline international accounting regulations and transparency. Meaning, that the IFRS should be applied on top of the CAS so that the company can both adhere to the international and the local rules. Nowadays, while China starts to converge more with the IFRS principles, the Chinese GAAP still differs from the well-known and familiarized IFRS trademarked by foreign investors.

 

Background

The organ of the Accounting Regulatory Department of the Ministry of Finance (MoF) is responsible for setting the accounting standards in China. As the previous regulations of the CAS were mainly concerned with sorting a balance sheet of the state-owned industry in the socialist era, the regulations in current years are aimed to reflect the financial status, analyse the operating results, and maintain transparency (for the state). The Chinese GAAP has two subordinate accounting policies:

In 2001, the GAAP initialy included the Accounting Standards for Business enterprises (ASBE01), however, the ASBE01 was in 2006 further transformed into the ASBE06. The ASBE06, which currently is still required for all publicly traded enterprises in China, is the main set of accounting measurements. Luckily, the Chinese GAAP (ASBE06), has key similarities with IFRS. For small-sized business cooperations, there is a special set of accounting measurements called the Accounting Standards for Small-Sized Business Enterprises (ASSBE). This standard can be seen as a merger between IFRS and ASBE06 and has the goal to make it easier for small enterprises to follow the tax regulations and accounting standards.

 

Differences Chinese Generally Accepted Accounting Principles (Chinese GAAP or CAS) and International Financial Reporting Standards (IFRS)

Knowing that the CAS and IFRS have similarities, it is evident that the foreign investor should be aware of the regulations that differ within these sets of accounting rules. Hereby the differences between the CAS (GAAP) and IFRS:

 

  • Valuating Fixed Assets

Whereas the IFRS has the choice to utilize the preferred method of valuating fixed assets, the CAS does not endorse this flexibility. In IFRS, one can opt for re-evaluating the assets or use the historical-cost valuation method. In CAS, only the latter is agreed upon to be used when valuating fixed assets.

 

  • Implementation Delays

Whenever IFRS updates/changes are released, these new IFRS rules are not immediately, and in some cases never, adopted in the CAS. In short, the Ministry of Finance (MoF) will review the latest release of the IFRS and see if it can be adopted into the China business framework. For foreign investors, this means that 1) the IFRS updates are delayed, 2) the IFRS might never be applied and thus results in 3) the IFRS regulations can be different than in other countries. This can lead to serious problems in companies with an overarching implementation of IFRS changes (e.g. software) in all of the subsidiary ventures.

 

  • Common Services in China

When handling cases of common service in China, the CAS has a more detailed description of the situation. For example, In the case of merging two companies with similar interests and under the control of one entity.  The CAS requires a restatement of the figure while IFRS has no specific rules for this situation.

 

  • Uncommon Services in China

Opposite to the previous point, uncommon situations in China are less detailed than the IFRS counterpart. The Italian-Chinese Chamber of Commerce exemplifies this difference by looking at employee benefit plans. The CAS has no specific rules for staff benefits offered by international firms besides payments in the firm’s stock. In the case of using benefits packages for its subsidiaries, the mother company can get into serious problems and should always have contact with the MoF to address and record such transactions accurately.

 

  • Fiscal Year

The fiscal year of the CAS starts from January 1st, while the start of the fiscal year can be decided by the company when applying IFRS. Regarding IFRS, the year must be 12 consecutive years.

 

How to successfully do business in China regarding the Chinese Accounting Standards?

To minimalize the potential risk of conflicts with the law, it is recommended for foreign investors to notice the differences between CAS and IFRS and apply both of the accounting standards in the right way. In this process of familiarizing with CAS, the differences should be known, and the contact between the firm and the Ministry of Finance should be optimal to resolve challenges and uncertainties. Moreover, be aware that the CAS can only be filed in the China language, and that short-cuts in the Chinese accounting world often result in serious delays and non-compliance: further complicating the international business. Thus, in the case of maintaining an overview of both CAS and IFRS, even while it is about 90-95% similar, it is recommended to have (specialized) agencies on your side. With experts on the topic, it is evident that the venture is assisted by experience. This way, the short straw will not be drawn when dealing in an unknown and new business environment.

 

For more assistance in the field of IFRS, the newest software by Amelkis can support enterprises to customize and analyse data while preserving an overview of the IFRS regulations.

If interested in personal advice regarding international business advice, tax situations or consolidation (in China), Global Connect Admin B.V. can assist you with these challenges due to the rich experience and framework of connections.

When intrigued by the personal IFRS-software solution, Global Connect Consultancy B.V. offers help with the installation, optimization, and customization of the Amelkis software Solution.

 

Source:

China-Italy Chamber of Commerce

Global Connect Consultancy Website Launch

20 Сен 2021
Company Updates
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Global Connect Admin is excited to announce the launch of the new Global Connect Consultancy website!

After months of work, Global Connect Consultancy will finally be able to assist you in all aspects regarding business consolidation:

  • Consolidation and Management Reporting Software
  • XBRL-software
  • IFRS 16 Lease
  • Intercompany tools

To realise this next step in consultancy, Global Connect Consultancy and Amelkis have partnered up offering new solutions with Amelkis-XBRL software.

 

If you are interested in personalised consolidation software solutions or have inquiries, you are more than welcome on the new Global Connect Consultancy website!
Do not forget to check out our YouTube channel

Working with ESEF: the European Single Electronic Format

18 Май 2021
ESEF, Europe, IFRS, XBRL
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Header image by Mikael Bomkvist

Every year organizations, accountants and regulators keep up to date with local and international rules and laws regarding accounting and finance. In recent years, digitalization is rapidly growing, including electronic formats and reports. Therefore more European countries start to apply the European Single Electronic Format (ESEF). While the world of financial services moves towards international standards and formats instead of localized ones, each country does this at its own pace. What can we expect from ESEF, and why is it convenient to use this electronic reporting format to prepare annual financial reports?

ESMA

ESEF is assigned by the European Securities and Markets Authority (ESMA), an independent EU Authority. ESMA has one mission in mind: enhancing investor protection and promoting stable and orderly financial markets. Therefore, this EU Authority safeguards the stability of the EU’s financial system. This safeguarding includes the protection of investors while promoting stable and orderly financial markets. They mainly assess risks to investors and markets, contribute to a rulebook for EU financial markets, and promote supervisory convergence and directly supervising specific financial entities.

ESEF

ESMA wishes to make reporting easier for issuers and facilitate accessibility, analysis and comparability of annual financial reports. The digitalization of annual financial statements in the EU is nothing new; in 2013, the Transparency Directive amended a requirement for electronic reporting formats. Only recently, ESEF became mandatory, with the following criteria:

  • Issuers must prepare annual financial reports in XHMTL;
  • Annual financial reports that contain IFRS consolidated financial statements must be labeled with XBRL ‘tags’;
  • The XBRL ‘tags’ must be embedded in the XHTML documents with Inline XBRL technology;
  • The taxonomy must provide the hierarchical structure used to classify financial information. This classification is essential for structured electronic reporting using XBRL as an extension of the IFRS taxonomy
  • Mark-up disclosures using the taxonomy element must have the closest accounting meaning to the marked up disclosure;
  • Primary financial statements must be marked up in detail, with the application of mark-ups for the whole sections of the Notes, otherwise called block tagging.

ESEF is more than just the digitalization of financial reports. To ensure your company publishes the annual financial statements correctly, constant attention to detail is in order. While ESEF is mandatory in the EU, the XBRL-format is still in the application process. Even with one format and one accounting standard, per country rules and annual reporting laws may differ. We at Global Connect Admin BV make sure we stay up-to-date with local changes, so if you have any questions, or wish assistance regarding ESEF, fiscal reporting and cross-border transactions, feel free to contact us anytime. We would love to help out.

Source

ESMA

С Пасхой!

02 Апр 2021
Current news
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Investing in Fukushima: Wishful Thinking or a Perfect Business Opportunity?

16 Мар 2021
Cross-border, Current news, Japan
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It has been over ten years since the Great East Japan Earthquake hit Fukushima. Thanks to worldwide support and Fukushima’s rebuilding and cleanup projects in Japan, the prefecture is slowly but surely making an economic recovery. The road to full recovery is not yet finished. However, what if you want to invest or start a business in Fukushima? Is it better to wait another ten years, or are there exciting opportunities for foreign companies? Let’s look at the Japanese prefecture that is mainly known for the earthquake and nuclear disaster.

Restoring the image of Fukushima

In February 2021, the Fukushima Ambassadors of Reconstruction (ふくしま復興大使) published a video explaining the rebuilding of Fukushima and conveying their gratitude to the received support and aid. They are well aware Fukushima is still recovering; however, they want the whole world to know that living and working in Fukushima is not equivalent to nuclear danger. For the prefecture to fully recover and for (foreign) businesses to fully employ, local and national governments need to continue and alter their support.

Industries

Fukushima is a prefecture with around 2,8 million inhabitants, with a GDP of 7,399,860 million Yen in 2014¹. From a business perspective, the main challenges are the aftermath of the nuclear disaster and finding the region’s industries and economy’s strengths. However, there are many opportunities if your business or organization is part of the following sectors and industries:

  • Manufacturing
  • IT
  • Metal
  • Ceramic engineering and soil
  • Food and agriculture
  • Electronic machinery
  • Logistics
  • Call centers
  • Data centers
  • Research and development (R&D)
  • Advanced technology
  • Medical and welfare
  • Renewable energy

¹Based on the Prefectural Citizens’ Economic Accounts of 2014 by the Cabinet Office

Incentives, subsidies and tax

Suppose you want to do business in Fukushima Prefecture or Fukushima City. In that case, the Fukushima government provides a subsidy of up to 50% of the designated land acquisition cost to support enterprise establishment. There is a subsidy system for foreign companies as well, for the costs of renting facilities, payment of utilities, management consulting fees, and personnel expenses. Furthermore, the Japanese and prefectural governments offer other subsidy systems and preferential tax systems, such as exempting corporate tax for five years.

You can receive a subsidy worth 50% of the land acquisition cost when you acquire 1.5 ha or more of an industrial park, invest 150 million yen or more in fixed assets, and start operating within three years of acquiring the land (30% for under 1.5). In addition, when you acquire privately-owned land and construct new bases in industrial regions, 5% of the acquisition cost is subsidized. In the case of R&D companies in medical care, medical welfare and/or renewable energy, this will be 10% instead of 5%.

Another subsidy for the promotion of employment is available when a company received a subsidy for land acquisition or was established in the mayor’s area and continuously employs new local employees for more than a year.

Suppose you employ more than five new local employees within a year or more since the start of operating. In that case, a three-year subsidy of 500,000 yen per employer is available if your company has received land acquisition grants. Once again, if your organization is medical and welfare-related and/or focuses on renewable energy R&D, you can enjoy a five-year subsidy instead of a three-year one. Furthermore, 50% of office rents are subsidized for three years as well.

Fukushima Special Zone Taxation for the Promotion of Industry Revival Investment

The manufacturing-related industry can benefit from Preferential Tax Treatment. This Treatment contains the following:

  • Newly established businesses receive essential exempting of corporate tax for five years
  • Businesses receive special depreciation or tax credit for investments in machinery, devices, and building.
  • For the employment of disaster victims, you receive a tax credit of 10% for salaries payment.
  • If your company is active in development and research, you will receive instant depreciation and a tax credit of depreciable assets.
  • There are local tax exemptions in Fukushima Prefecture, such as enterprise tax, real estate acquisition tax, and fixed asset tax.

There is still much work to be done before Fukushima Prefecture is its old self. If you and your business want to assist Japanese communities and organizations hit by natural disasters, you can do so on the Japanese Red Cross Society website.

If you are looking for a professional to help you find your Fukushima business opportunities, do not hesitate to talk to us. We can either help you with this or help you find someone who can!

Related GCA articles

The Future of Accounting Standards in Japan: IFRS or Japanese GAAP

The Brexit impact on Japan

Press Conferences in Japan and the Netherlands: Different news, different actions

The Recent Increase on Consumption Tax in Japan

The Bond Market in EU, China and Japan

Sources

JETRO – Fukushima Prefecture – Monodukuri Fukushima Web

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