Industry産業通則

Small and Medium-sized Enterprise Basic Act

中小企業基本法（ちゅうしょうきぎょうきほんほう）

The groundwork of Japan's policy on small and medium-sized enterprises: the principles and duties under which the State and local governments make that policy, and which businesses its measures are aimed at.

Text in force since
Promulgated
Articles: 32
Amendments on the way: 0

Read the text Open on e-Gov

What this law does

It sets the basic principles (基本理念), basic policies (基本方針) and other groundwork of the policy on small and medium-sized enterprises, and the duties of the State and local governments (地方公共団体), so that the policy is pursued as a whole. The principles are that the independent efforts of small and medium-sized enterprises are to be encouraged, their innovation and start-ups promoted, their management base strengthened and their adaptation to economic and social change eased, and that the business environment is to let small-scale enterprises make the most of their vitality.(Art. 1(1), Art. 3(1), Art. 3(2), Art. 4(1), Art. 5(1), Art. 6(1)) (the provisions it rests on)

Read the full overview

For the State's measures under this Act, a small and medium-sized enterprise (中小企業者) is, as a rule (おおむね), a company whose stated capital or total contributions (資本金の額又は出資の総額) or whose number of regular employees (常時使用する従業員の数) is at or below the figures for its main business, or an individual whose number of regular employees is at or below them: a company qualifies by either figure, an individual by the number of employees alone. The figures are: manufacturing, construction, transport and every other sector not named here, 300 million yen or 300 employees; wholesale, 100 million yen or 100 employees; services, 50 million yen or 100 employees; and retail, 50 million yen or 50 employees.(Art. 2(1), Art. 2(1)(i), Art. 2(1)(ii), Art. 2(1)(iii), Art. 2(1)(iv)) (the provisions it rests on)
These are the ranges of the State's measures under this Act, and only a general guide: the exact range is set measure by measure (施策ごとに), so that each measure serves the basic principles efficiently.(Art. 2(1)) (the provisions it rests on)
A small-scale enterprise (小規模企業者) is, as a rule (おおむね), a business with 20 or fewer regular employees, or 5 or fewer where its main business is in commerce (商業) or services. The State is to direct its measures for them towards keeping them in business in their communities, helping them grow steadily as their situation allows, and taking account, in finance, tax, information and other matters, of how hard it often is for them to secure management resources.(Art. 2(5), Art. 8(1), Art. 8(1)(i), Art. 8(1)(ii), Art. 8(1)(iii)) (the provisions it rests on)
The State is to take measures for innovation, start-ups (especially by women and young people) and creative business activity, and for a stronger management base: management resources, overseas business, information technology, collaboration, industrial and shopping-street clusters, labor, fair dealing such as preventing late payment, and more government contracts for small and medium-sized enterprises. It is also to ease their adaptation to economic and social change, with mutual-aid schemes against a business partner's bankruptcy and schemes for rescuing, handing on or closing a business, and to ease their access to funds and build up their own capital, through credit supplementation (信用補完), fair tax burdens and other means. It is also to set up systems and take other measures to stop the business activity of anyone other than a small and medium-sized enterprise from unjustly harming their interests.(Art. 5(1), Art. 12(1), Art. 13(1), Art. 14(1), Art. 15(1), Art. 16(1), Art. 17(1), Art. 18(1), Art. 19(1), Art. 20(1), Art. 21(1), Art. 22(1), Art. 23(1), Art. 24(2), Art. 24(3), Art. 24(4), Art. 25(1), Art. 26(1)) (the provisions it rests on)
Other Acts, such as the Act on Mutual Relief System for the Prevention of Bankruptcies of Small and Medium-sized Enterprises (中小企業倒産防止共済法), set their own definition of a small and medium-sized enterprise (中小企業者). The Act on Strengthening the Management of Small and Medium-Sized Enterprises, etc. (中小企業等経営強化法), for one, uses the same figures for the four sectors except in the sectors a Cabinet Order (政令) names, which take the capital and employee figures that Order sets instead, and it also counts enterprise associations (企業組合), cooperative partnerships (協業組合) and the other cooperatives a Cabinet Order names. Some laws borrow Article 2(1) instead: Ministry of Justice Order No. 37 of 2014, which sets the points criteria for the Highly Skilled Professional status of residence (高度専門職), gives bonus points where the organization the person works for under contract (契約機関) is a small and medium-sized enterprise under Article 2(1) and has received a certification or support for innovation that the Minister of Justice designates by public notice (告示).(Act on Strengthening the Management of Small and Medium-Sized Enterprises, etc. Art. 2(1), Act on Mutual Relief System for the Prevention of Bankruptcies of Small and Medium-sized Enterprises Art. 2(1), Ministerial Order for Defining the Criteria in the Right-Hand Column of the Entry for Highly Skilled Professional in the Appended Table I(2) of the Immigration Control and Refugee Recognition Act Art. 1(1)(i)) (the provisions it rests on)

Article 1 states the law's own purpose

Who counts as a small and medium-sized enterpriseSmall-scale enterprisesBasic principlesStart-upsFair dealing and late paymentFinancingAnnual report to the DietSmall and Medium-sized Enterprise Policy Council

32 85 19 27 6

Amendments

A Japanese law is changed by another law or order that rewrites it — an . No amendment to this law is waiting to come into force. Its latest amendments are below. This law's amendments page lists every amendment e-Gov records and, for those whose changes this site has read, shows them provision by provision, in Japanese and English.

4 amendments already in force

1 January 2026
The text on this site
Act Partially Amending the Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors and the Act on the Promotion of Subcontracting Small and Medium-Sized Enterprises
下請代金支払遅延等防止法及び下請中小企業振興法の一部を改正する法律
The text after this amendment, on e-Gov
1 April 2025
Act Partially Amending the Act on Advancement of Integration and Streamlining of Distribution Business and the Motor Truck Transportation Business Act
流通業務の総合化及び効率化の促進に関する法律及び貨物自動車運送事業法の一部を改正する法律
The text after this amendment, on e-Gov
1 October 2020
Act Partially Amending the Act on Facilitation of Succession of Management of Small and Medium Sized Enterprises, etc. to Promote Business Succession of Small and Medium Sized Enterprises
中小企業の事業承継の促進のための中小企業における経営の承継の円滑化に関する法律等の一部を改正する法律
The text after this amendment, on e-Gov
1 July 2016
Act Partially Amending the Act for Facilitating New Business Activities of Small and Medium-sized Enterprises
中小企業の新たな事業活動の促進に関する法律の一部を改正する法律
The text after this amendment, on e-Gov

Who it applies to

It applies to

The State, which must formulate and carry out policy on small and medium-sized enterprises as a whole, following the basic principles; the Government takes its measures under the four basic policies of Article 5.(Art. 4(1), Art. 5(1)) (the provisions it rests on)
Local governments (地方公共団体), which must, following the basic principles, formulate and carry out measures for small and medium-sized enterprises suited to the natural, economic and social conditions of their area, in light of an appropriate division of roles with the State; the State and local governments are to cooperate with each other.(Art. 6(1), Art. 27(1)) (the provisions it rests on)

3 more

Small and medium-sized enterprises (中小企業者), which are to strive, on their own initiative, to improve their management and their terms of trade so as to grow in step with economic and social change.(Art. 7(1)) (the provisions it rests on)
Bodies for small and medium-sized enterprises, such as organizations for running their business jointly, which are to strive to work actively with them towards the basic principles.(Art. 7(2)) (the provisions it rests on)
Anyone other than a small and medium-sized enterprise whose business is connected with small and medium-sized enterprises, who must cooperate with the measures the State and local governments carry out for them.(Art. 7(3)) (the provisions it rests on)

How it is enforced (3)

The Act has no penalties and sets no procedure a business or a person can be put through. Its rules are duties of the State, the Government and local governments to make and carry out policy, and duties of businesses to strive or to cooperate, with no consequence stated for a breach.(Art. 4(1), Art. 5(1), Art. 6(1), Art. 7(1), Art. 7(2), Art. 7(3)) (the provisions it rests on)
The Government must take the legislative, fiscal and financial measures (法制上、財政上及び金融上の措置) its policy needs. After hearing the Small and Medium-sized Enterprise Policy Council (中小企業政策審議会), it surveys small and medium-sized enterprises regularly and publishes the results, and each year it reports to the Diet on their trends and the measures it has taken, and submits a document, also after hearing the Council, setting out the measures it plans.(Art. 9(1), Art. 10(1), Art. 11(1), Art. 11(2)) (the provisions it rests on)
The Small and Medium-sized Enterprise Policy Council (中小企業政策審議会), set up in the Ministry of Economy, Trade and Industry, deliberates important matters on this Act at the request of the Minister of Economy, Trade and Industry or other ministers concerned, and may give them its opinion. It has up to 30 part-time members of learning and experience whom that Minister appoints, and also handles the matters the 14 other Acts named in Article 29(3) give it, among them the Act on Strengthening the Management of Small and Medium-Sized Enterprises, etc. (中小企業等経営強化法).(Art. 28(1), Art. 29(1), Art. 29(2), Art. 29(3), Art. 30(1), Art. 30(2), Art. 30(3)) (the provisions it rests on)

How it connects to other laws

Cites this lawLawThis law cites it

It also names 15 laws not yet held here.

Where the translation comes from

The Ministry of Justice's translation is shown only where the Japanese it translates matches the law in force today. Everywhere else the English is a machine translation, marked on the paragraph itself.

Only the Japanese is the law, and no lawyer has reviewed the machine translation.

Sources

Everything this page rests on

e-Gov (Digital Agency)中小企業基本法 — the text in force from 2026-01-01Original
e-Gov (Digital Agency)中小企業基本法 — revision historyOriginal
Japanese Law Translation, Ministry of Justice中小企業基本法 — its English title as the Ministry of Justice's translation database lists itOriginal
Machine translation, not official
Machine translation, corrected on review, not official
Written for this site with AIEnglish titles of amending laws, written for this site
Written for this site with AIDescriptions of each law, written for this site
Worked out by this site from e-Gov's text

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