On May 16, 2018, the Act on Special Measures for Productivity Improvement and an Amendment to the Industrial Competitiveness Enhancement Act were enacted. The Act on Special Measures for Productivity Improvement came into force on June 6, 2018, and a portion of the Amendment to the Industrial Competitiveness Enhancement Act came into force on July 9, 2018.
Key features of the Act on Special Measures for Productivity Improvement include: (i) the establishment of a "Regulatory Sandbox" system, in which businesses whose business plans have been certified by the government (such certification may be granted to certain business plans using innovative technologies or new business models) may conduct demonstrations that are not feasible under existing regulations; and (ii) the introduction of a tax break for IoT investments that facilitate data sharing or data collaboration.
Key features of the Amendment to the Industrial Competitiveness Enhancement Act include the introduction of special measures related to the Companies Act of Japan for certified mergers, acquisitions, and reorganizations, such as: (i) a tax deferral for transferees of shares as part of a merger or acquisition to promote share consideration mergers and acquisitions; (ii) relaxation of the requirements of "demand for share etc." so that a shareholder who owns two-thirds or more of the total shares of a company may execute a "demand for share etc."; and (iii) a measure to enable a "spin-off" of a certain portion of a business to another entity to be completed without shareholder approval. Another feature is the introduction of a certification system to certify certain desirable information control systems of companies.
Based on the above, companies that are considering participating in the innovative technologies sector, adopting new business models, or strengthening their competitiveness through mergers, acquisitions, or reorganizations should be aware of these two newly enacted acts and examine the contents carefully to take advantage of them.
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