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Guide to Startup Subsidies in Japan

Startups in Japan are taking a huge turn in 2023. The support for start-ups has grown since Prime Minister Fumio Kishida’s governmental policies of support. Just in 2022, the prime minister vowed to promote bold investments and reforms in industries such as start-ups. He specifically cited the big corporations in Japan today, as they themselves had come from small and hugely creative innovations back after the World War period.

Since those vows, the Tokyo Metropolitan government is now planning to invest in start-ups while many cities are offering subsidies like free rent, covering staff salary, incorporation, grants, and subsidies to develop companies.  As of 2021, Tokyo is the world’s Number 1 Innovation City in the Innovation City Index. Today, there’s so much more to look forward to in establishing your start-up in Japan.  

A symbol of Japanese government that promotes subsidies in Japan

What industries are hot for startups?

There are a few industries in which the government is incredibly growth-minded. Free spaces, loans, and other kinds of support are being offered in industries such as deep technology, green technology, health technology, and financial technology. The Tokyo government focuses highly on financial technology as it aims for Tokyo to be the financial hub of Asia. For those unaware, green technology or green tech is a technology that is environmentally friendly or reduces human impact on the environment. The Japanese government’s international conference promises of carbon neutrality and a focus on climate change have amped up this industry.

These industries are also being invested in through start-up-specific subsidies. This article will explore the various startup subsidies in Japan and how you can utilize them in your start-up today or in the future. 

What are subsidies and what do they cover?

Startup subsidies in Japan are either tax cuts or cash payments from the government to keep the costs of running a business low as well as to accelerate growth. This is especially helpful for startups which may need some funding. It should be noted that there exist certain limitations on what you can use the subsidies for. For example, if the subsidy is for marketing purposes, it can only be used for marketing expenditures. This applies to other types of startup subsidies in Japan as well so choose the type of subsidy you apply for well. 

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What is the difference between subsidies and loans?

With a start-up in Japan, you must have cash on hand. Payment cycles tend to be long in the country as companies tend to pay for your service after maybe 3-6 months and only after finishing a project. Loans are common because of this. Interest rates in Japan have been historically low, as well, which makes this a less painful process. But what exactly is the difference between startup subsidies in Japan and loans?

Startup subsidies in Japan are financial aids or incentives provided by the government, as explained previously. Loans, on the other hand, involve borrowed funds that must be repaid over time, with interest, fostering financial responsibility and capital generation. Startup subsidies in Japan offer immediate support, while loans create obligations for repayment. For more on loans in Japan, head to our podcast on Banking and Loans in Japan with Larry Greenberg. 

Which government agencies are responsible for providing startup subsidies in Japan?

Several government agencies are responsible for issuing startup subsidies in Japan. The country’s Ministry of Economy, Trade, and Industry (METI) is one such government agency that is leading the start-up world through the Green Innovation Fund and other projects. This fund is a 2 trillion yen fund and was made with the vision of carbon neutrality for Japan by 2050, so it targets businesses and research that go toward sustainability and environmental consciousness. METI is one of the main government agencies responsible for promoting industrial and economic growth in Japan. It often plays a significant role in supporting startups through various programs, grants, and initiatives.

Japan External Trade Organization (JETRO) also provides startup subsidies in Japan. They provide support to foreign companies and entrepreneurs looking to establish or expand their businesses in Japan. They offer various services, including business matching, market research, and information on other startup subsidies in Japan.

Aside from national-level agencies, regional and local governments are often trying to promote the rise of start-ups in their city. The Tokyo metropolitan government, the Hokkaido government, the Aichi government, and so many more are on the lookout for potential. The Tokyo Metropolitan government offers a wide range of assistance which we will outline in the next section.

What types of support can start-ups expect to receive?

Start-ups can mainly expect to receive two types of subsidized support for their start-up: Financial and non-financial assistance startup subsidies in Japan. The Tokyo Metropolitan Government, for example, offers free consulting services for industries 4.0 or Fintech & Asset Management. These are examples of non-financial assistance startup subsidies in Japan. There are different types of assistants within these two vastly contrasting categories which we will explore in this section. 

Financial Assistance Startup Subsidies in Japan

Financial assistance startup subsidies in Japan play a pivotal role in fostering economic growth, innovation, and entrepreneurship within a region. This section delves into the various components of financial support aimed at empowering businesses and individuals during different stages of their journey. To know more about financial assistance startup subsidies from the Japanese government, take a listen to our podcast episode on How to Get Japanese Government Money for Your Business with Miho Tanaka.

Get Japanese Government Money for Your Business with Miho Tanaka

Seed Funding and Early-Stage Support

Seed funding and early-stage support are critical pillars of financial assistance. Startups and entrepreneurs often require initial capital to transform their innovative ideas into viable businesses. Startup subsidies in Japan within this category provide the essential monetary injection needed to cover preliminary costs such as product development, market research, and operational expenses. The following are seed funding from various parts of Japan that are subsidized by local governments. 

  • Hokkaido’s government offers up to 50% (maximum amount of 2.5 Million JPY) subsidies to cover initial costs with a maximum amount of 300,000 JPY.  By offering seed funding, the region aims to catalyze the emergence of promising ventures and contribute to job creation. 
  • Nagoya City’s government offers startup support for companies within 5 years of starting with a headquarters in Nagoya. The subsidy limit is a maximum of 1 Million JPY at ⅓ rate.

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Research and Development (R&D) Funding and Innovation Grants

Research and development are key drivers of technological advancement and economic progress. R&D funding and innovation grants are tailored to support companies engaged in cutting-edge research, product development, and technology-driven initiatives. These startup subsidies in Japan foster collaboration between academia and industry, resulting in the creation of novel products, services, and solutions that elevate the region’s competitiveness on a global scale.

For hardware start-up companies, making an MVP often needs grants to allow time to gain funding from venture capitalists or angel investors. Grants for research and development are crucial for these types of companies. 

Prizes

Recognizing and rewarding innovation is a cornerstone of the financial assistance framework. Initiatives are available like the Financial Innovation Prizes which celebrates groundbreaking ideas and solutions that have the potential to reshape industries and address pressing challenges. By offering such prizes, the region not only acknowledges exceptional achievements but also encourages a culture of continuous innovation.

Free Rent

To alleviate one of the initial financial burdens faced by startups and businesses, the provision of free or subsidized workspace is a valuable component of financial assistance. By offering free rent or shared office spaces, the region facilitates a conducive environment for collaboration, idea exchange, and growth. This initiative aims to reduce overhead costs, enabling entrepreneurs to allocate resources more effectively during their crucial early stages. The following cities are a few examples of those that provide rent support.

  • Kobe City’s government offers free rent for start-ups such as free office space before the establishment of the start-up’s own office (maximum of 3 months). After the start-up establishes its own office, Kobe City also offers subsidies up to ½ of the space’s rent with a maximum of 1500/m2/month for downtown Kobe office spaces. Subsidy rates for spaces outside downtown Kobe go for 750/m2/month. 
  • Nagoya City’s government offers subsidized rent for start-ups looking to establish a base office within Nagoya City. The subsidy is called the Subsidy for Promotion of Start-up Accumulation, which has a subsidy rate of ½ for 12 months with a maximum amount of 700,000 JPY. 
  • Hokkaido’s government offers 3 months of free housing rent for entrepreneurs planning to open up a business in Sapporo with further plans of incorporation
Hokkaido's city area

Employee Salary Support 

Recognizing the significance of a skilled workforce, employee salary support initiatives are designed to attract and retain talent within the region. These startup subsidies in Japan may offer incentives such as wage reimbursements or matching contributions to encourage businesses to invest in human capital. The region’s commitment to enhancing its workforce promotes industry expertise and innovation, contributing to sustainable economic development. Here we list a few examples of subsidized employee salary support.

  • Kobe City Government offers employee salary support subsidies for businesses with offices in downtown Kobe for 300,000 JPY per newly employed full-time worker (maximum 3 million JPY for the whole business) who has a registered address listed under Hyogo Prefecture. The businesses must, however, have 11 or more full-time workers. 
  • Nagoya City’s government offers startup support for companies within 5 years of starting with a headquarters in Nagoya. This seed funding includes labor expenses of up to 350,000 JPY per month per worker over the subsidized period.

Tax Reduction

Tax reduction measures are a strategic approach to stimulate economic activity and incentivize investment. By offering tax breaks to eligible businesses and individuals, the region aims to promote entrepreneurship, job creation, and overall economic growth. These reductions can encompass various taxes, such as corporate income tax, property tax, and sales tax, providing a financial boost to entities that contribute to the region’s economic vitality. These different categories are important to distinguish amongst when applying for tax reductions. 

  • Kobe City Government offers reductions on corporate enterprise taxes. These reductions will allow the start-up to pay only ⅓ of the full corporate enterprise tax given that. 
  • Fukuoka City’s government has a considerable reduction in national taxes, up to at least 8% reductions for industries such as the Internet of Things, International, Medicine, Agriculture, and Advanced IT.

Loans

Loans from the government are a significant financial assistance subsidy that helps promote and foster economic growth at reasonable interest rates for the borrowers. Repayment periods also tend to stretch out and are considerably flexible. Here we list a few examples of flexible government loans.

  • Japan Finance Corporation (JFC) offers loans for start-ups that haven’t started or are within 1 year of operations can avail of special loan programs through Japan Finance Corporation (JFC) which offers a base interest of 2% which can be lowered with a guarantor. 
  • As part of their Startup Package for Foreign Entrepreneurs, Fukuoka City’s government offers a reduced interest rate of 1.3% for a maximum loan amount of 25 million JPY for start-ups in Fukuoka that have been established within the last 2 years. 

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Non-Financial Assistance Startup Subsidies in Japan

In addition to financial assistance, the region is committed to promoting non-financial support that nurtures and guides businesses toward success. This section delves into the diverse range of non-financial startup subsidies in Japan aimed at fostering growth, knowledge enhancement, and long-term sustainability.

Start-up Incubation and Acceleration Programs

Business incubation and acceleration programs stand as pillars of support for startups and emerging enterprises. These programs offer a structured environment where entrepreneurs can access mentorship, resources, and networking opportunities. Through collaboration with established industry experts and successful entrepreneurs, participants gain invaluable insights, guidance, and feedback. Accelerators also offer possible investment after the program.

You can apply to notable accelerator programs in our article on the Top 10 Start-up accelerators in Japan and spread to incubators in our article on Top 10 Start-up Incubators in Japan. Other programs like the Japans Venture Academy (JVA) fellowship also encourage startup-minded individuals to create their own products. They’re currently being funded by Shibuya Startup Support, an initiative by the Shibuya Government. Fukuoka City’s government also invites businesses to their facilities by giving priority access to incubator facilities for entrepreneurs who open their businesses in Fukuoka. 

Mentoring and Consulting Services

Mentoring and consulting services form a crucial part of the region’s non-financial assistance strategy. Established professionals and seasoned mentors offer their expertise to guide startups and businesses through challenges, strategic decision-making, and growth opportunities. These one-on-one interactions provide a unique avenue for knowledge transfer and the cultivation of critical skills, ultimately contributing to the overall success of the entrepreneurial ecosystem. 

  • Tokyo Metropolitan Startup Support’s One-stop Business Establishment Center established by the Tokyo Metropolitan Government offers a variety of services such as incorporation support, company registration (for both national tax and metropolitan tax), immigration support, and more
  • Fukuoka City’s government offers free English business consultation in their Startup Café with experts such as lawyers, accountants, and government representatives. Startup visas and city certifications are other services offered by the government

Training and Skill Development Support

Continuous learning and skill development are fundamental for businesses to remain competitive in a rapidly evolving landscape. Training programs and skill development initiatives are tailored to equip entrepreneurs and their teams with the latest tools, techniques, and knowledge relevant to their industries. By investing in human capital, the government ensures that businesses have the capabilities to innovate, adapt, and thrive in an ever-changing marketplace.

Nagoya City’s government offers skill development through programs such as NAGOYA BOOST 10000. NAGOYA BOOST 10000 implements programs aimed at aiding budding entrepreneurs in gaining the necessary expertise and competencies for venturing into new business endeavors. It teaches know-how on product and service development through practical courses. Finally, the organization holds pitch events to lead entrepreneurs into presenting their business ideas to Nagoya. For details on support Nagoya / Aichi government provide to startups, check out our podcast episode with StationAI.

Startups in Aichi and Nagoya with Satoru & Akihiro

The Ministry of Health, Labor, and Welfare (MHLW) supports various startup subsidies in Japan for career development such as those listed here.

  • Specified Job Seeker Employment Development Grant is a grant made for the employment of people who want to work but struggle to find it in human resource jobs because of a lack of skill or work experience. This grant provides a certain training period and a number of working hours.
  • Development of Human Resources Development Support Subsidy is a grant that subsidizes part of the expense for training workers of a company in new fields and areas of expertise. This grant subsidizes 75% of the expenses (60% for large companies, see link for definition of a large company) with an additional wage subsidy of  960 yen (480 yen for large companies) per hour. 
  • Development of Industrial Employment Stability Grant (Skill Up Support Course) is a grant that enrolls workers in secondary courses that aim to teach new skills and subsidizes a portion of the wages given that the company provides a 5% increase in wages after the enrollment. The maximum amount is 8,355 yen per person per day (10 million yen per business owner) and the payment period will be 1 month to 1 year.

To learn more about these opportunities, read more about them on the MHLW’s website.

List of startup subsidies in Tokyo

To aid you in your start-up journey, we’ve compiled a list of start-up subsidies for you to apply to according to your start-up’s needs. Some of these are no longer active so we’ve separated those out, but remember that they may be active again in the future, so keep an eye out!

List compiled by Francisco Dalla Rosa Soares

Inactive startup subsidies in Japan

Any industry

City: Tokyo

NameContentsTargetCapSubsidy RateSubsidy PeriodInactive Since
製品開発着手支援助成事業 Product development Start Support SubsidySupport for preliminary examination of technical issues utilizing external sources when doing product / technology developmentSMEs/ Sole proprietors / Prospective founders100,000 – 1 Million JPYUp to 1/2Maximum 1 year 2020
新製品・新技術開発助成 事業New Product and New Technology Development SubsidyBusinessIn-house development of new products and technologies that are expected to be put into practical useSMEs / Sole proprietors / SME groups, etc./SME group / prospective founder15 Million JPYUp to 1/2Maximum 1 year and 9 months2020

Inactive startup subsidies in Japan

Manufacturing Industry

City: Tokyo

NameContentsTargetCapSubsidy RateSubsidy PeriodInactive Since
TOKYO地域資源等活用推進事業TOKYO Local Resources Utilization Promotion Project-Aiming to revitalize the local economySupporting new product development, etc.New products that utilize local resources in Tokyo or solve problemsSupporting the development and improvement of new servicesSMEs / Sole proprietors / SME groups, etc./General incorporated foundation, general incorporated association, specified non-profit corporation15 Million JPYUp to 1/2Maximum 2 years2020
市場開拓助成事業Market development subsidySupport for the development of an innovation map developed by a company with a certain level of evaluation or support from the Tokyo Metropolitan Government and/or Public Corporations.SMEs / Sole proprietors / SME groups, etc./General incorporated foundation, general incorporated association, specified non-profit corporation3 Million  JPYUp to 1/2Maximum 1 year and 3 months2020

Inactive startup subsidies in Japan

Disaster Prevention Industry

City: Tokyo

NameContentsTargetCapSubsidy RateSubsidy PeriodInactive Since
先進的防災技術実用化支 援事業Support for practical application of advanced disaster prevention technologyToward the practical application of excellent disaster prevention products that enhance urban disaster prevention capabilities improvement and subsequent dissemination of our products, technologies, and prototypesSMEs (also for large deemed companies) /SME groups, etc./SME groups[Improvement / practical use] 10 Million JPY

[Promotion] 3.5 Million JPY
[Improvement / practical use] Up to 2/3

[Promotion] Up to 1/2
Maximum 1 year and 9 months2020

Active startup subsidies in Japan

Any industry

City: Tokyo

NameContentsTargetCapSubsidy RateSubsidy Period
TOKYO戦略的イノベー ション促進事業TOKYO Strategic InnovationPromotion businessThose conducting substantial business activities at their head offices or branches in TokyoSmall and medium-sized enterprises (also for deemed large enterprises) / sole proprietors /SME groups, etc./SME groups / prospective founders15 – 80 Million JPYUp to 2/3Maximum 3 years
外国特許出願費用助成事業 Foreign patent application fee subsidyFinancial Support for SMEs with advanced technology that will need patents.SMEs in and out of Tokyo, general incorporated associations, and foundations4 Million JPYUp to 1/2Not listed
外国実用新案出願費用助 成事業 Foreign utility model application cost assistanceSubsidizes part of the costs required for foreign utility model applications for small and medium-sized enterprises that are trying to utilize utility models that can be granted rights at an early stageSMEs/sole proprietors, general incorporated associations, and foundations600,000 JPYUp to 1/2Not listed
外国意匠出願費用助成事業 Foreign design application fee subsidyFinancial Support for SMEs that need to file foreign design applicationsSMEs/sole proprietors, general incorporated associations, and foundations600,000 JPYUp to 1/2Not listed
外国商標出願費用助成事業 Foreign trademark application fee subsidySubsidizes part of the costs required to file foreign trademark applications for small and medium-sized enterprises that have distinctive trademarks for excellent products and services and intend to use them widely overseas.SMEs/sole proprietors, general incorporated associations, and foundations600,000 JPYUp to 1/2Not Listed
外国侵害調査費用助成事業 Foreign infringement investigation cost subsidyFinancial support for fact-finding investigations, appraisals of infringing products, and warnings to infringers, as well as measures to prevent the importation of counterfeit products manufactured in foreign countries into JapanSMEs/sole proprietors, general incorporated associations, and foundations2 million JPYUp to 1/2Not Listed
特許調査費用助成事業Patent search cost subsidySMEs/sole proprietors, general incorporated associations, and foundations
Must adhere to the following requirements:

Those who have received subsidies from the Tokyo Metropolitan Intellectual Property Center in the past must submit a “utilization status report,” etc. by the designated date.
Subsidizes part of the necessary costs for the purpose of requesting another company’s patent research for the purpose of formulating a development strategy, etc.1 million JPYUp to 1/2Not listed
海外商標対策支援助成事業 Overseas trademark measures support subsidySubsidizes efforts to cancel or invalidate similar trademarks of other companies that hinder business in the country where they plan to enter in order for small and medium-sized companies to expand overseas sales channels with their own brand.SMEs/sole proprietors, general incorporated associations, and foundations5 Million  JPYUp to 1/2Maximum 3 years
外国著作権登録費用助成 事業Foreign copyright registration fee subsidySubsidizes part of the costs required for foreign copyright registration for small and medium-sized enterprises that own copyrighted works in excellent products and services and intend to use them widely overseas.Subsidies for expenses required for the acquisition of intellectual property rights, etc., and support from formulation to implementation of intellectual property strategies by intellectual strategy advisors, etc.100,000 JPYUp to 1/2Not Listed
グローバルニッチトップ 助成事業 Global Niche Top GrantSMEs in Tokyo who meet the requirements listed in the link.SMEs/sole proprietors, general incorporated associations, and foundations10 Million  JPYUp to 1/2Maximum 3 years
知的財産活用製品化支援 助成事業 Intellectual property utilization commercialization supportIntellectual Property Utilization Commercialization Support Project aims to speedily develop new products by utilizing intellectual property such as open patents held by large corporations.Financial support for the introduction of basic goods and equipment necessary for SMEsto to implement their BCPs5 Million  JPYUp to 1/2Not listed
BCP実践促進助成事業BCP practice promotion subsidyFinancial support for the introduction of basic goods and equipment necessary for SMEs to implement their BCPsSMEs that have formulated a BCP15 million JPYSMEs, Up to 1/2 Small businesses: Up to 2/34 months
サイバーセキュリティ対策 促進助成事業Cyber security measures promotion subsidysupport for the introduction of equipment, etc. for implementing cybersecurity measures built from the perspective of protecting company secrets and personal information by SMEsSMEs in Tokyo that have the second stage of security action implemented by IPA15 million JPYUp to 1/24 months

Active startup subsidies in Japan

Medical industry

City: Tokyo

NameContentsTargetCapSubsidy RateSubsidy Period
医療機器等事業化支援助 成事業 (医療機器産業参入促進助成事業 Medical device commercialization support subsidyToward the entry of small and medium-sized manufacturing companies in Tokyo into the medical device industry, we will continue to support from product development to commercialization, following the implementation of matching with medical device manufacturing and sales companies.SMEs / Sole proprietors / SME groups, etc./SME group* Must be registered as a member of the medical device industry entry support project or the Tokyo Metropolitan Medical-Engineering Cooperation HUB Organization.50M YenUp to 2/3Not listed

Active startup subsidies in Japan

General Merchandise industry

City: Tokyo

NameContentsTargetCapSubsidy RateSubsidy Period
若手・女性リーダー 応援プログラム助成事業 ~商店街で開業する女性・ 若手男性を支援します~ Young / Female Leader Support Program GrantFinancial support for refurbishing or renovating stores and introducing equipmentNew SMEs lead by young / females in Tokyo7.3 Million JPYUp to 3/4maximum 1 year from the grant decision date
*Store rent is for 2 years from the grant decision date
商店街起業・承継支援事業Shopping district entrepreneurship and succession supportSubsidized portion of the expenses required for refurbishing or renovating stores and introducing equipmentNew SMEs in Tokyo5.8 Million JPYUp to 2/3maximum 1 year from grant decision date
*Store rent is for 2 years from the grant decision date

Active startup subsidies in Japan

Startup incubation industry

City: Tokyo

NameContentsTargetCapSubsidy RateSubsidy Period
インキュベーション施設 整備・運営費補助事業Incubation facility maintenance and operation cost subsidyWorks to improve the level of facility operation for small businessesSMEsMaintenance and repair costs: 25 million
Operating costs: 20 million yen per year
Up to 2/3Up to 3 years

Active startup subsidies in Japan

Digital Technology industry

City: Tokyo

NameContentsTargetCapSubsidy RateSubsidy Period
「新しい日常」対応型サービス創出支援事業Support for creating services that support “new daily life”Experts dispatched by the public corporation will provide support according to the status of initiatives, from the business model conception stage for new services to the formulation, execution, and verification of business plans. This will be free of charge along with financial support. Small and medium-sized enterprises in Tokyo that have a head office or a branch in Tokyo and have a business record of more than two years. They must also be an innovative service business that adapts to the markets changed by the new corona. Finally, they must be planning to expand7.5 Million  JPY (double-check)Up to 1/2Maximum 1 year and 4 months

Active startup subsidies in Japan

Industrial Technology industry

City: Tokyo

NameContentsTargetCapSubsidy RateSubsidy Period
躍進的な事業推進のための 設備投資支援事業 ~設備投資の助成金~Capital investment support for breakthrough business promotionThis project aims to help small and medium-sized enterprises, etc., who face changes and reforms head-on and aim for sustainable development by utilizing advanced technology, strengthening their competitiveness for further development, and promoting digital transformationHas a registered head office or branch in Tokyo, and small and medium-sized enterprises, etc. that have been in business for more than two years in Tokyo30-100 Million  JPY depending on conditions3/4 or 1/4 or 1/2 depending on conditionsMaximum 1 year and 6 months

Active startup subsidies in Japan

Manufacturing industry

City: Tokyo

NameContentsTargetCapSubsidy RateSubsidy Period
LED照明等節電促進助成 事業 Subsidy for promoting power saving such as LED lightingFinancial support for introducing equipment necessary for a power saving planSMEs engaged in the manufacturing industry 15 million JPYUp to 1/24 months

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Specific Criteria for Obtaining Subsidies in Japan

In order to obtain startup subsidies in Japan, certain specific criteria must be met by potential recipients. These criteria vary based on different factors such as the nature of the business, the origin of the company, and the alignment with government policies. This section delves into the key requirements that applicants must fulfill to be eligible for subsidies offered by the Japanese government.

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What is a start-up according to the Japanese government?

The Japanese government defines a startup as a company that embodies innovation, and technology-driven solutions, and exhibits potential for growth and expansion. Startups, as per Japanese standards, are often characterized by their focus on pioneering ideas, disruptive technologies, and a strong commitment to research and development. The government recognizes the importance of fostering a dynamic ecosystem for start-ups, both domestic and foreign, to stimulate economic growth and innovation.

Eligibility Rules for Foreigners or Foreign Start-Ups

Foreign individuals or companies seeking startup subsidies in Japan are subject to specific eligibility rules. These rules are designed to facilitate international collaboration and innovation while ensuring that recipients contribute positively to the Japanese economy. Eligibility for subsidies often requires foreign start-ups to have a legal presence in Japan, demonstrate a clear business plan, and exhibit the potential to create jobs and drive economic progress. Foreigners hoping to set up start-ups are also expected to have a resident status that permits business activities within Japan.

Rules for Overseas Companies

Overseas companies interested in obtaining startup subsidies in Japan from the Japanese government must adhere to certain regulations and guidelines. These may include establishing a subsidiary or branch in Japan, partnering with local entities, or aligning their business activities with the strategic priorities outlined by the Japanese government. This approach ensures that subsidies are directed towards initiatives that align with national economic goals and promote long-term sustainability.

Application Process for Subsidies

Applying for startup subsidies in Japan involves a structured process that requires prospective recipients to provide comprehensive information about their business, innovation potential, and intended outcomes. The following examples illustrate the general steps involved in applying for these subsidies:

1. Submission of Application: Interested startups submit a detailed application that outlines their business model, innovation goals, and the specific subsidy program they are applying for. The application form is linked in the pages linked in our list and the address to mail this is also usually listed. Before submitting this, be sure to look through the application guidelines and your eligibility for the program. You may also be required to sign up to a website and register as a member. You may have to make a reservation ahead.  

Remember writing these documents is a lot like writing an essay. Even those N1 in Japanese would find this difficult so if you can possibly ask a native speaker to help fill out the document, that would be helpful, especially if they work in the startup.

2. Assessment and Review: Government agencies responsible for disbursing startup subsidies in Japan evaluate applications based on predefined criteria, including innovation, economic impact, and alignment with policy objectives.

3. Verification: Shortlisted applicants undergo a verification process to validate the accuracy of the information provided in the application. This may include interviews or site visits. Interviews usually operate with a group. It helps not to be technical with the interviewers and try to explain it as simply as you can.

4. Approval and Grant: Successful applicants receive official approval and are granted the subsidy, which may be awarded as a financial grant, tax incentives, or other forms of support.

5. Monitoring and Reporting: Recipients are typically required to adhere to reporting obligations, providing updates on project progress, milestones achieved, and the effective utilization of the subsidy.

Obligations or Conditions After Obtaining Subsidies

Startups that obtain subsidies from the Japanese government are often subject to certain obligations and conditions aimed at ensuring accountability, transparency, and a return on investment for the broader economy. These obligations may include:

  • Reporting and Auditing: Providing periodic reports detailing the progress and outcomes achieved as a result of the subsidy, along with potential audits to verify the accuracy of the information provided.
reporting after obtaining startup subsidies in Japan

  • Repayment or Recapture: In some cases, start-ups may be obligated to repay the subsidy if specific milestones or objectives are not met within the agreed-upon timeframe.

These obligations and conditions ensure that startup subsidies in Japan granted to start-ups contribute effectively to the development of a thriving and innovative business landscape in Japan while maximizing the overall benefits for society and the economy.

Final Thoughts

Japan’s evolving start-up subsidy landscape is ushering in a new era of support for entrepreneurial endeavors. This commitment is seen in the Tokyo Metropolitan government’s ambitious investments and various city-level subsidies. The distinction between financial assistance startup subsidies in Japan and loans empowers start-ups with flexible funding options, enabling them to strategically manage their financial resources and fuel innovation.

Guided by agencies like the Ministry of Economy, Trade, and Industry (METI) and the Japan External Trade Organization (JETRO), Japan’s start-up ecosystem is poised to flourish. METI’s emphasis on equity-based funding structures and JETRO’s support for foreign companies showcase a holistic approach that fosters innovation and cross-border collaboration. The eligibility criteria for startup subsidies in Japan align with Japan’s drive for innovation, with an emphasis on supporting ventures that exhibit growth potential, innovation, and a commitment to contribute to the economy. As these startup subsidies in Japan continue to shape the country’s start-up landscape, the nation’s trajectory toward becoming a global innovation powerhouse appears promising, offering a fertile ground for aspiring entrepreneurs to thrive.

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