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The Diet passed a bill into law Wednesday to facilitate collaboration among small and midsize companies by providing subsidies and other incentives when two or more jointly start new businesses or research and development projects.

The new law, unifying support measures under three existing laws, also spells out tax breaks and financing.

The government will give subsidies worth two-thirds of funds needed for starting new businesses and provide tax breaks for capital investment.

The applicants can also receive loans from the Japan Finance Corp. for Small and Medium Enterprise and other government-affiliated financial institutions.

The legislation is designed to help small and midsize companies with excellent technologies cultivate new businesses by facilitating cooperation, officials said.

The House of Councilors approved the bill, which has already been passed by the House of Representatives.

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