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Japan: Five-Year Tax Exemption for Tech Startups & Expanded E-Visa for Residency
Facing a severe population decline and pressure from the Yen exchange rate, the Japanese government has unveiled an 'unprecedented' policy package aimed at attracting global talent, determined to transform Tokyo into Asia's new startup hub.
Today, 4 April 2026, the Japanese Cabinet formally approved the "Economic Renewal and Human Capital Transformation Act 2026". It is being hailed as the most decisive and ambitious effort in a decade to restructure an economy under severe strain from a record ageing population and a critical shortage of highly skilled labour.
The new legislation focuses on two groundbreaking pillars, directly targeting the attraction of foreign direct investment (FDI) and high-tech talent – particularly engineers in AI, semiconductors, and green energy:
🚀 1. "Green-Zone Incentives" Package Any foreign startup establishing a base in the new special economic zones (Tokyo, Fukuoka, Osaka) and operating in the DeepTech sector will be eligible for exclusive benefits:
- 100% exemption from corporate income tax for the first five years.
- Access to unsecured loans of up to 50 million yen at 0% interest from the Development Bank of Japan (DBJ).
🛂 2. "Revolutionary" Reform of the Digital Expert Visa (Digital Nomad & Expert Visa) The government has formally relaxed administrative and language barriers in the permanent residency review process for workers with exceptional skills:
- Issuance of a Digital Nomad Visa with a residence period of up to three years – a sharp increase from the previous six months.
- Specialists who achieve sufficient points under the "Highly Skilled Professional" evaluation system can apply for Permanent Residency (PR) after just one year of living and working in Japan, instead of the previous three or ten-year thresholds.
Market reaction: Immediately after the announcement, the Tokyo stock market responded extremely positively. At the close of this morning's trading session, the Nikkei 225 index rose by 1.8%, led by a surge in the technology and commercial real estate sectors.
"Japan is opening its doors wider than ever before. We don't just want to import your technology; we want the world's most creative minds to call Japan home."
— Japan's Minister of Economy declared at a snap press conference this morning.
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