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The Japanese government plans to broaden a corporate tax incentive program aimed at encouraging companies to move headquarters functions from Tokyo’s 23 special wards to regional areas, informed sources report.
Under the current program, qualifying companies relocating their headquarters from central Tokyo to local areas can claim a corporate tax reduction equivalent to 7% of the cost of acquiring office property. Companies expanding existing headquarters functions outside Tokyo are eligible for a 4% tax credit on building acquisition costs.
Officials indicate the government intends to extend the program beyond its current expiration at the end of March 2026 and increase the corporate tax reduction rate. The Cabinet Office will include these enhancements in its tax system reform proposals for fiscal 2026.
The initiative forms part of a broader strategy to stimulate regional economic development and alleviate overconcentration in Tokyo. By incentivizing the decentralization of corporate headquarters, the program aims to create jobs, encourage investment, and strengthen local business ecosystems.
Analysts note that the expanded tax benefits could influence corporate decisions on headquarters relocation, potentially impacting both Tokyo’s commercial real estate market and regional economic growth.
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