Act Amending the Industrial Competitiveness Enhancement Act and Related Laws Promulgated

The Ministry of Economy, Trade and Industry (METI) explains that, with changes in international economic conditions, continuing price rises driven by resource prices, and population decline and ageing, the sustainable development of companies' business activities is important for Japan's industrial competitiveness. The amendment combines support for domestic investment and higher value added, supply chain resilience through overseas demand and stable raw materials, industrial land, and the maintenance of everyday living infrastructure needed to keep a workforce.

According to the House of Councillors' summary, under the Industrial Competitiveness Enhancement Act, productivity-improving equipment confirmed by the METI Minister as particularly contributing to high future productivity is defined as 'specified productivity-improving equipment', in connection with a new investment tax incentive. New plan-certification schemes are created for business changes made in response to sudden, unforeseeable changes in international economic conditions or to rising business costs, with support such as two-step loans through the Japan Finance Corporation, and for business changes responding to falling demand for goods and services needed for everyday life caused by population decline and ageing.

Under the act on promoting regional economic driving businesses (地域経済牽引事業の促進による地域の成長発展の基盤強化に関する法律), green-space ratio rules for factories used by such businesses are relaxed further on condition that the living environment is preserved, industrial water suppliers are obliged to supply data centres within their service areas, and tax relief is provided for landowners who sell land for site development under approved plans. Under the Trade and Investment Insurance Act, insurance linked to arrangements with foreign governments that METI designates as particularly necessary for strengthening Japanese companies' supply chains becomes a separate 'specified underwriting business' with its own special account.

Sources: [2] [5]

The Cabinet submitted the bill to the Diet on 6 March 2026. It was examined by the Committee on Economy, Trade and Industry of each House, passed by the House of Representatives on 14 May 2026 and by the House of Councillors on 29 May 2026, which enacted it. It was promulgated on 5 June 2026 as Act No. 29 of 2026; a few provisions took effect that day.

A draft Cabinet Order adjusting related Cabinet Orders was published for public comment on e-Gov in June 2026. On 28 July 2026 the Cabinet adopted a Cabinet Order fixing 31 July 2026 as the effective date of the Act's main provisions, and the adjusting Order (Cabinet Order No. 244 of 2026), which makes procedural changes to the enforcement orders of the Industrial Competitiveness Enhancement Act, the Trade and Investment Insurance Act and the Special Accounts Act. Both were promulgated and the main provisions took effect on 31 July 2026.

In September 2026 METI published four drafts for public comment relating to the scheme for businesses adjusting to falling demand for everyday goods and services, including a Cabinet Order amending the Enforcement Order of the Industrial Competitiveness Enhancement Act and the Registration and License Tax Act Enforcement Order, and ministerial ordinances on the scheme's procedures and support bodies. The comment periods ended between 7 and 10 October 2026.

1. 2026-03-06 — Bill submitted to the Diet (Cabinet bill) [1]
2. 2026-05-14 — Passed by the House of Representatives [1]
3. 2026-05-29 — Passed by the House of Councillors; enacted [1]
4. 2026-06-05 — Promulgated as Act No. 29 of 2026 [1] [3]
5. 2026-06-05 — Provisions listed in Article 1(i) of the supplementary provisions take effect [3]
6. 2026-07-31 — Effective-date Cabinet Order and Cabinet Order No. 244 promulgated (Cabinet decision 28 July) [4] [5]
7. 2026-07-31 — Main provisions of the Act take effect [3] [5]
8. 2026-09-11 — Draft Cabinet Order on the everyday goods and services scheme published for public comment (closed 10 October) [6]

The timeline of related official records below lists the records this dashboard has matched.

Sources: [1] [3] [4] [5] [6]

Confirmed next steps

• Article 2 and most of Article 3 of the Act (Article 3 amends the regional economic driving businesses act), together with certain supplementary provisions, take effect on a date set by Cabinet Order within six months of promulgation, under Article 1(ii) of the supplementary provisions; that is, no later than early December 2026. [3]
• The Act requires the government to review how the amended acts are working about five years after they take effect. [3]

Expected procedural steps

The usual procedure for this kind of instrument; not a forecast for this reform.

• After a public comment period closes, the ministry normally publishes the comments received with its responses and then adopts the Cabinet Order and ministerial ordinances, possibly revised.
• A Cabinet Order fixing the date for the second group of provisions is normally promulgated before that date.

Outstanding uncertainties

• When this explainer was verified, the Cabinet Order fixing the date of the second group of provisions, and the final versions of the September drafts, had not been confirmed as adopted; e-Gov Law Search listed only the latest date the Act allows.
• The details of the new tax incentive are set by tax legislation and METI's confirmation procedures, which this explainer does not cover.

The amendment mainly creates support measures rather than new obligations for companies in general. Companies planning capital investment, or adjusting their business in response to sudden changes in international economic conditions, rising costs or shrinking local demand for everyday goods and services, may be able to apply for plan certification and the related support.

Operators of data centres and of factories in regional development projects may be affected by the industrial water and green-space rules, and companies whose supply chains rely on trade insurance linked to government-to-government arrangements may see new insurance products. Eligibility conditions are set in the acts, their enforcement orders and METI's guidance.

Points to check

• If you are planning capital investment in Japan, check METI's confirmation procedure for specified productivity-improving equipment and the related tax measure.
• For businesses supplying everyday goods or services in areas of falling demand, follow the final Cabinet Order and ordinances on the new certification scheme.
• For data centre projects, check with the local industrial water supplier how the new supply obligation applies.
• Watch for the Cabinet Order fixing the effective date of the second group of provisions.

Sources: [2] [6]