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1 Outline of Matters Concerning Certification as a Multinational Enterprise Engaging in Supervisory Business or Research and Development Business in the Special Zone for Asian Headquarters and Other Areas Within Tokyo March 29, 2013 Ref. No.: 24 Chitokusui No. 155 Revised: April 1, 2014 Ref. No.: 26 Chitokusui No. 8 Revised: April 1, 2015 Ref. No.: 27 Seichosho No Purpose The purpose of this outline is to facilitate the creation of new businesses and employment opportunities by Multinational Enterprises and other companies both within Japan and abroad and to enhance international competitiveness of industries by establishing matters concerning the certification of Multinational Enterprises that intend to newly engage in Supervisory Business or Research and Development Business within the Special Zone for Asian Headquarters designated by the Prime Minister of Japan (hereinafter referred to as Tokyo s Special Zone ) pursuant to the Comprehensive Special Zones Act (Act No. 81 of 2011, hereinafter referred to as Special Zones Act ), thereby contributing to the sound development of Tokyo and the Japanese economy. 2. Definition of Terms 2.1. The term Multinational Enterprise as used in this Outline means a corporation that falls under any of the following items, and which has established a Subsidiary Corporation or Other Similar Entity defined in the following paragraph, in a country or region (hereinafter referred to as Country, etc. ) other than the Country, etc., in which the head office or principal office of the corporation is located (referred to as Specified Corporation in the next paragraph) Foreign corporation (meaning the corporation prescribed in Article 2, paragraph 4 of the Corporation Tax Act (Act No. 34 of 1965)) A domestic corporation (meaning a corporation prescribed in Article 2, paragraph 3 of the Corporation Tax Act; the same applies hereinafter) in which foreign capital (meaning capital of a corporation established according 1

2 to a foreign country s laws or a corporation with its head office located in a foreign country) has over one-third of the Voting Rights of All Shareholders, etc. (meaning the voting rights of all shareholders or equity investors; the same applies hereinafter) of the corporation The term Subsidiary Corporation or Other Similar Entity as used in this Outline means a corporation that falls under any of the following items A corporation in which a Specified Corporation has a majority of the Voting Rights of All Shareholders, etc A corporation in which a Specified Corporation and a corporation listed in the previous item jointly have a majority of the Voting Rights of All Shareholders, etc. (excluding the corporation listed in item 1, and limited to a corporation in which the Specified Corporation has part of the Voting Rights of All Shareholders, etc. ) A corporation in which the corporation that has a majority of the Voting Rights of All Shareholders, etc. of a Specified Corporation and the Specified Corporation jointly have a majority of the Voting Rights of All Shareholders, etc. (excluding the corporation listed in item 1, and limited to a corporation in which the Specified Corporation has part of the Voting Rights of All Shareholders, etc.) A corporation in which a Specified Corporation and the corporation listed in the previous item jointly have a majority of the Voting Rights of All Shareholders, etc. (excluding the corporation listed in item 1, and limited to a corporation in which the Specified Corporation has part of the Voting Rights of All Shareholders, etc. ) 2.3. The term Specified Multinational Enterprise as used in this Outline means a corporation that is a Multinational Enterprise and is prescribed in Article 15, paragraph 2 of the Ordinance for Enforcement of the Comprehensive Special Zones Act (Cabinet Office Ordinance No. 39 of 2011, hereinafter referred to as Special Zones Act Enforcement Ordinance ) The term Supervisory Business as used in this Outline means a business prescribed in Article 1, paragraph 5, item 1 of the Special Zones Act Enforcement Ordinance Of businesses prescribed in Article 1, paragraph 1 to paragraph 3 of the Special Zones Act Enforcement Ordinance as businesses concerned with research and development, the term Research and Development Business as used in this Outline means those businesses prescribed under the Comprehensive Special Zone for 2

3 International Competitiveness Development plan (hereinafter referred to as Certified Special Zone Plan ) formulated by the Tokyo Metropolitan Government as prescribed in Article 12, paragraph 1 of the Special Zones Act and certified by the Prime Minister of Japan as prescribed in paragraph 10 of the same article. 3. Requirements, etc. for Corporation Designation Pursuant to the Special Zones Act 3.1. Requirements for designation as a corporation prescribed in Article 26, paragraph 1 of the Special Zones Act (hereinafter referred to as Special Zones Act Designated Corporation ) or a special business corporation prescribed in Article 27, paragraph 1 of the same Act (hereinafter referred to as Special Zones Act Designated Special Business Corporation ) shall fall under the items of Article 15, paragraph 1 and the items of Article 18, paragraph 1 of the Special Zones Act Enforcement Ordinance, and shall fall under any one of the following items: A corporation (excludes corporations established through acquisition etc. of a domestic company) that implements a Supervisory Business and is newly established (from December 22, 2011; the same applies hereinafter) by a Specified Multinational Enterprise A corporation that implements a Research and Development Business and falls under either (1) or (2) below: (1) A corporation (excludes corporations established through acquisition etc. of a domestic company), newly established in Japan by a Multinational Enterprise, in which the Multinational Enterprise has over one-third of the Voting Rights of All Shareholders, etc. (2) A corporation (other than (1) above or a corporation established through acquisition, etc. of a domestic company) newly established in Japan by a foreign corporation (referred to as the Corporation in (a) and (d)) and that falls under any one of the following (a) to (d). (a) A corporation in which the Corporation has a majority of the Voting Rights of All Shareholders, etc. (referred to as Subsidiary in (b)). (b) A corporation in which a Subsidiary has a majority of the Voting Rights of All Shareholders, etc. (referred to as Sub-subsidiary in (c)). (c) A corporation in which a Sub-subsidiary has a majority of the Voting Rights of All Shareholders, etc. (d) A corporation in which a corporation that has a majority of the Voting Rights of All Shareholders, etc. of the Corporation, and a corporation in 3

4 which the Corporation and corporations listed in (a), (b) and (c) have, in total, the majority of the Voting Rights of All Shareholders, etc. (excluding those listed in (a), (b) and (c), and limited to a corporation in which the Corporation has part of the Voting Rights of All Shareholders, etc..) 3.2. Procedures for handling matters concerned with the application and designation of a Special Zones Act Designated Corporation and a Special Zones Act Designated Special Business Corporation are as prescribed by the Special Zones Act and Special Zones Act Enforcement Ordinance. 4. Requirements for Corporation Certification Requirements for corporation certification shall fall under any one of the following items A Special Zones Act Designated Corporation (limited to corporations that have been designated by the Governor of Tokyo under the stipulations of Article 17, paragraph 2 of the Special Zones Act Enforcement Ordinance by March 31, 2016) A Special Zones Act Designated Special Business Corporation (limited to corporations that have been designated by the Governor of Tokyo under the stipulations of Article 20, paragraph 2 of the Special Zones Act Enforcement Ordinance by March 31, 2016) 5. Application Procedures for Certification Corporations wishing to receive certification as set forth in 4 above must submit the Application for Certification (Form 1) to the Governor of Tokyo and, according to the corporation classification listed in each of the following items, attach the document(s) listed in that item Special Zones Act Designated Corporation (1) Document proving that the corporation that established the said corporation is as described in or (2) In the case of operation of a Research and Development Business, document proving that it fulfills one of the requirements of (3) Documents raised in each item of Article 17, paragraph 1 of the Special Zones Act Enforcement Ordinance. However, these are not necessary if an application based on the Ordinance has been made on the day of the application. (The same applies to (3) of the next item.) (4) Specifications, estimates, drawings, and other documents on machinery and 4

5 equipment, tools and fixtures, buildings and their affiliated facilities, as well as structures (specified machines prescribed in Article 42 (11), paragraph 1 of the Act on Special Measures Concerning Taxation (Act No. 26 of 1957), the same shall apply herein), which were acquired, manufactured, or will be constructed for use in the Supervisory Business or Research and Development Business in the special zone pursuant to the designated corporation business implementation plan (hereinafter referred to as Designated Corporation Business Plan ) prescribed in Article 15, paragraph 1, item 2 of the Special Zones Act Enforcement Ordinance. (5) Other documents deemed to be necessary by the Governor of Tokyo Special Zones Act Designated Special Business Corporation (1) Document proving that the corporation that established the said corporation is as described in or (2) In the case of operation of a Research and Development Business, document proving that it fulfills one of the requirements of (3) Documents raised in each item of Article 20, paragraph 1 of the Special Zones Act Enforcement Ordinance. (4) Other documents deemed to be necessary by the Governor of Tokyo. 6. Decision for Certification 6.1. If the Governor of Tokyo recognizes that the contents of the application made as prescribed in 5 conform to the requirements raised in each item of 4, certification shall, in principle, be granted within one month from the date of receiving the submission of the application, and the Notice of Certification (Form 2) will be issued to the corporation prescribed in If the Governor of Tokyo does not grant certification as defined in the preceding paragraph, Notice of Non-Certification (Form 3) shall be issued to the corporation prescribed in 5 with the reason for this decision attached In the issuance of the Notice of Certification as prescribed in 6.1, according to the classification of the corporation listed in the following items, the Governor of Tokyo shall attach a term of validity for the certification as specified respectively in those following items Special Zones Act Designated Corporation Specified term of validity prescribed in Article 17, paragraph 5 of the Special Zones Act Enforcement Ordinance pertaining to the corporation (should the corporation fall under paragraph 6 of the same article, the term of validity 5

6 prescribed in the same paragraph) Special Zones Act Designated Special Business Corporation Specified term of validity prescribed in Article 20, paragraph 5 of the Special Zones Act Enforcement Ordinance pertaining to the corporation (should the corporation fall under paragraph 6 of the same article, the term of validity prescribed in the same paragraph). 7. Report on the Implementation Status 7.1. Corporations that have received certification as prescribed in 6.1. (hereinafter referred to as Certified Corporation ) must, within one month following the end of each business year, submit to the Governor of Tokyo the Report on Business Implementation Status using Form 4, with the documents listed in the following items attached For a Special Zones Act Designated Corporation, a report as prescribed in Article 16, paragraph 1 of the Special Zones Act Enforcement Ordinance. However, this is not necessary if, on the day the report is to be made, a report based on the ordinance has been made. (The same applies to the next item.) For a Special Zones Act Designated Special Business Corporation, a report as prescribed in Article 19, paragraph 1 of the Special Zones Act Enforcement Ordinance Should a building (as prescribed in Article 341, item 3 of the Local Tax Act (Act No. 226 of 1950), the same applies herein) acquired by a Special Zones Act Designated Corporation pursuant to the Designated Corporation Business Plan, fall under all the items of 5.1. to 5.4., the Report on Asset Acquisition following the day the building is provided for use as the Supervisory Business or Research and Development Business, must be promptly submitted to the Governor of Tokyo using Form 5, with the documents listed in the following items attached Document that shows the address, ownership, date of acquisition, and total floor area Floor plan that clearly shows the portion provided for use as the Supervisory Business or Research and Development Business, as well as a document that shows the floor area of the portion In the case of acquisition through trade, a copy of the contract pertaining to the trade In the case of new construction, copies of the contract pertaining to the new construction, certificate of verification of construction, and certificate of final 6

7 inspection Should a building or depreciable asset (as prescribed in Article 341, item 4 of the Local Tax Act; the same applies herein) acquired by a Special Zones Act Designated Corporation pursuant to the Designated Corporation Business Plan, satisfy all the items of 5.1. to 5.4., the Report on Asset Acquisition, regarding the situation as of January 1 of each year, must be submitted by April 30 of each year to the Governor of Tokyo using Form 5, with the documents listed in the following items attached Depreciable assets Documents with entries of the name and type of asset, date of acquisition, cost of acquisition, useful life, and place of installation Building (1) Document that shows the address, ownership, date of acquisition, and total floor area. (2) Floor plan that clearly shows the portion provided for use as the Supervisory Business or Research and Development Business, as well as a document that shows the floor area of the portion If the Governor of Tokyo has been submitted the Report on the Implementation Status prescribed in 7.1., and recognizes that the Certified Corporation is implementing its business appropriately, the Governor of Tokyo shall, in principle, grant recognition within one month from the date of accepting the submission of the report, and shall issue the Recognition of Business Implementation using Form 6 to the corporation. If recognition is not granted, notification shall be issued to the corporation using Form 7 with the reason attached If the Governor of Tokyo has been submitted the Report on Asset Acquisition in 7.2. or 7.3., and recognizes the depreciable assets or building to conform to all of the following items, the Governor of Tokyo shall grant recognition within one month from the date of accepting the submission of the report, and shall issue the Recognition of Asset Acquisition using Form 8 to the corporation. In such a case, for the building, this shall also be recognition of the floor area for the portion allocated for use as the Supervisory Business or Research and Development Business Must have been acquired within the period from the day of certification received as prescribed in 6.1. to March 31, Must be acquisition of specified machines, which were never allocated for use by business after their manufacture or construction, or specified machines that were manufactured or constructed Must not be allocated for leasing purposes. 7

8 Must be allocated for use by the Supervisory Business or Research and Development Business within the special zone Should the depreciable asset or building approved in the preceding paragraph be found to not satisfy the requirements listed in the items of the preceding paragraph, the Governor of Tokyo shall rescind the approval. 8. Collection of Reports The Governor of Tokyo can, within the limits necessary to implement this outline, request necessary reports from the Certified Corporation. 9. On-site Inspections and Questioning 9.1. The Governor of Tokyo can, within the limits necessary to implement this outline, instruct staff to enter the office or other premises of the Certified Corporation to conduct an inspection or question the relevant parties on the facilities or operations The staff who undertakes the on-site inspection or questioning as prescribed in the preceding paragraph, must carry personal identification and present this when requested by the persons concerned. 10. Change of Business Plan When a Certified Corporation wishes to change its business plans, it must first submit an application and obtain certification by the Governor of Tokyo. However, this shall not apply for minor changes recognized by the Governor of Tokyo to have no risk of hindering the smooth implementation of business The application for certification in the preceding paragraph must be submitted to the Governor of Tokyo using the Application for Change of Business Contents (Form 9) along with attached documents that can confirm the contents of the changes When the Governor of Tokyo certifies the change in paragraph 1, the Certification of Change of Business Contents (Form 10) shall be issued, and if certification in the same paragraph is not granted, Notice of Non-certification of Change of Business Contents shall be issued using Form 11 with the reason attached. 11. Change in Term of Validity of Certification Even after issuing the certification as prescribed in 6.1, should the specified term of 8

9 validity be changed as prescribed in Article 17, paragraph 8 or Article 20, paragraph 9 of the Special Zones Act Enforcement Ordinance, the term of validity for certification set by 6.3. shall be changed. 12. Rescission of Designation When the Governor of Tokyo recognizes that a Special Zones Act Designated Corporation or a Special Zones Act Designated Special Business Corporation no longer meets the requirements prescribed in 3, as prescribed in Article 26, paragraph 3 or Article 27, paragraph 3 of the Special Zones Act, notification to that effect and the reason shall be given to the corporation using the Notice to Rescind Designation and Certification (Form 12). 13. Rescission of Certification The Governor of Tokyo can rescind certification if it is recognized that any one of the following items apply to the Certified Corporation When it is recognized that the corporation has not begun operations within three months from the date of certification prescribed in When it is recognized that the corporation no longer meets the requirements for certification prescribed in When the corporation does not make a report as prescribed in 7.1. to 7.3., or 8, or gives a false report, or refuses, interferes, evades inspection, does not reply to questions, or makes a false reply to on-site inspections or questioning as prescribed in When certification was rescinded as prescribed in When the corporation acted in violation of related ordinances or other ways that lead to significant loss of social credibility When the Governor of Tokyo recognizes the need to rescind certification for reasons other than those raised in each of the preceding items When the Governor of Tokyo rescinds the certification as prescribed in the preceding paragraph, notification to that effect and the reason shall be given to the corporation using the Notice to Rescind Designation and Certification (Form 12). 14. Announcement of Certification When the Governor of Tokyo has granted certification as prescribed in 6.1, or rescinded certification as prescribed in 13, this fact will be made public, and the date and contents of the public notice will be announced over the Internet and other 9

10 methods. The same shall also apply should there be changes to the matters that had been made public. 15. Other Necessary Matters Necessary matters other than those provided in this outline shall be provided separately. Supplementary Provision This Outline shall come into effect as of April 1, Supplementary Provision This Outline shall come into effect as of April 1, Supplementary Provision This Outline shall come into effect as of April 1,

11 Form 1 APPLICATION FOR CERTIFICATION To the Governor of Tokyo Corporation Address Corporation Name Name of Representative seal I hereby apply for certification as prescribed in 5.1 of the Outline of Matters Concerning Multinational Enterprise Engaging in Supervisory Business or Research and Development Business in the Special Zone for Asian Headquarters and Other Areas Within Tokyo. Along with providing cooperation for documentation review, on-site inspections, and other necessary matters for examining the suitability of this application, I declare that this application satisfies the requirements listed in the items of 4 of this Outline. 1 Date of establishment YYYY, MM, DD 2 Location of main office and place of business implementation 3 Type of corporation Special Zones Act Designated Corporation Special Zones Act Designated Special Business Corporation 4 Content of business Supervisory Business Research and Development Business 5 Period of business implementation From YYYY, MM, DD to YYYY, MM, DD

12 Form 2 No. NOTICE OF CERTIFICATION To: (Corporation name/representative) Governor of Tokyo seal Regarding the contents of the application dated YYYY, MM, DD, certification is granted as prescribed in 6.1 of the Outline of Matters Concerning Certification as a Multinational Enterprise Engaging in Supervisory Business or Research and Development Business in the Special Zone for Asian Headquarters and Other Areas Within Tokyo. 1 Type of corporation Special Zones Act Designated Corporation approved Special Zones Act Designated Special Business Corporation 2 Content of business certified Supervisory Business Research and Development Business 3 Location of business implementation 4 Period of business From YYYY, MM, DD to YYYY, MM, DD implementation (Business year, etc.) (From YYYY, MM, DD to YYYY, MM, DD) (1) This Notice of Certification is valid up to YYYY, MM, DD. (2) This certification will be made public on the website of Tokyo s Special Economic Zones. (3) This Notice of Certification must be promptly returned when the company no longer satisfies the requirements listed in the Comprehensive Special Zones Act and this Outline, or was revealed to have received certification by deceit or other wrongful means.

13 Form 3 No. NOTICE OF NON-CERTIFICATION To: (Corporation name/representative) Governor of Tokyo seal Regarding the contents of the application dated YYYY, MM, DD, you are hereby notified that certification is not granted due to the following reason. Reason for non-certification

14 Form 4 REPORT ON BUSINESS IMPLEMENTATION STATUS To the Governor of Tokyo Corporation name/representative seal As prescribed in 7.1. of the Outline of Matters Concerning Certification as a Multinational Enterprise Engaging in Supervisory Business or Research and Development Business in the Special Zone for Asian Headquarters and Other Areas Within Tokyo, I hereby report as follows on the implementation of business certified (on YYYY, MM, DD) as prescribed in 6.1. of the Outline. 1. Type of corporation: 2. Type of business: Supervisory Business / Research and Development Business 3. Period of business implementation: From YYYY, MM, DD to YYYY, MM, DD (Business year, etc.: From YYYY, MM, DD to YYYY, MM, DD) (Term of validity: From YYYY, MM, DD to YYYY, MM, DD) 4. Location of business implementation 5. Contents of business implemented 6. Local tax items and amount exempted for this business year, and local tax items that are intended to be exempted

15 Form 5 REPORT ON ASSET ACQUISITION To the Governor of Tokyo Corporation name/representative seal As prescribed in 7.2. or 7.3. of the Outline of Matters Concerning Certification as a Multinational Enterprise Engaging in Supervisory Business or Research and Development Business in the Special Zone for Asian Headquarters and Other Areas Within Tokyo, I hereby report as per the attached. Along with providing cooperation for documentation review, on-site inspections, and other necessary matters for examining this report, I declare that this acquisition satisfies the requirements listed in the items of 7.5. of this Outline.

16 (Attachment to Form 5) RECORD OF MATTERS INCLUDING ACQUISITION OF DEPRECIABLE ASSETS OR BUILDINGS BY A SPECIAL ZONES ACT DESIGNATED CORPORATION 1 Building details Name (Type/Structure) Address / Bldg. Number (Start of use) Total floor area (floor space used by the designated business) Purpose Business content Conformity Corporation s allocation m2 / ( ) (YYYY, MM, DD) ( m2 ) ( %) m2 / ( ) (YYYY, MM, DD) ( m2 ) ( %) 2 Details of depreciable assets No Name Type Address (Start of use) Purpose Business content Conformity Corporation s allocation Machinery & equipment Tools & fixtures Other( ) (YYYY, MM, DD) / ( %) Machinery & equipment / Tools & fixtures (YYYY, MM, DD) ( %) Other( ) Machinery & equipment / Tools & fixtures (YYYY, MM, DD) ( %) Other( )

17 Form 6 RECOGNITION OF BUSINESS IMPLEMENTATION To: (Corporation name/representative) Governor of Tokyo seal Regarding the report dated YYYY, MM, DD, on business implementation status, it is hereby recognized that business was appropriately implemented as prescribed in 7.4. of the Outline of Matters Concerning Certification as a Multinational Enterprise Engaging in Supervisory Business or Research and Development Business in the Special Zone for Asian Headquarters and Other Areas Within Tokyo.

18 Form 7 NOTICE OF NON-RECOGNITION OF BUSINESS IMPLEMENTATION To: (Corporation name/representative) Governor of Tokyo seal Regarding the contents of the report dated YYYY, MM, DD, you are hereby notified that recognition is not granted due to the following reason. Reason for non-recognition

19 Form 8 RECOGNITION OF ASSET ACQUISITION To: (Corporation name/representative) Governor of Tokyo seal Regarding the report dated YYYY, MM, DD, on asset acquisition, etc., it is hereby recognized as per the attached that the acquisition satisfies the requirements listed in 7.5. of the Outline of Matters Concerning Certification as a Multinational Enterprise Engaging in Supervisory Business or Research and Development Business in the Special Zone for Asian Headquarters and Other Areas Within Tokyo.

20 Contents Form 9 APPLICATION FOR CHANGE OF BUSINESS CONTENTS To the Governor of Tokyo Corporation name Name of representative seal As prescribed in of the Outline of Matters Concerning Certification as a Multinational Enterprise Engaging in Supervisory Business or Research and Development Business in the Special Zone for Asian Headquarters and Other Areas Within Tokyo, I hereby apply as follows. 1. Date of change: YYYY, MM, DD (Date of certification: YYYY, MM, DD, No. ) 2. Items and Contents Changed and Reason Items Changed Before After Reason

21 Form 10 No. CERTIFICATION OF CHANGE OF BUSINESS CONTENTS To: (Corporation name/representative) Governor of Tokyo seal Regarding the application for change in business contents dated YYYY, MM, DD, certification is granted as follows. 1 Date of change: YYYY, MM, DD (Date of certification: YYYY, MM, DD, No. ) 2 Items and Contents Changed Items changed Contents changed

22 Form 11 No. NOTICE OF NON-CERTIFICATION OF CHANGE OF BUSINESS CONTENTS To: (Corporation name/representative) Governor of Tokyo seal Regarding the application for change in business contents dated YYYY, MM, DD, you are hereby notified that certification is not granted due to the following reason. Reason for non-certification

23 Form 12 No. NOTICE TO RESCIND DESIGNATION AND CERTIFICATION To: (Corporation name/representative) Governor of Tokyo seal As prescribed in 12 and 13 of the Outline of Matters Concerning Certification as a Multinational Enterprise Engaging in Supervisory Business or Research and Development Business in the Special Zone for Asian Headquarters and Other Areas Within Tokyo, you are hereby notified that your (designation as a corporation / certification as a corporation) is rescinded due to the following reason. Reason for rescission of designation/certification