Guide to Startup Subsidies in Japan for 2025

In 2025, Japan’s startup scene is thriving, fueled by government-backed policies and increased support. Prime Minister Fumio Kishida’s focus on innovation and bold investments, launched in 2022, continues to empower new businesses. With incentives, funding, and a growing tech-driven ecosystem, startups in Japan are leading the way in sectors like AI, green tech, and fintech. This momentum is transforming Japan into a hub for entrepreneurs and setting the stage for future growth and innovation.

Since those vows, the Tokyo Metropolitan government plans to invest in start-ups while many cities offer 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.  

Key Takeaway

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 that 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.

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 a detailed breakdown of the difference between subsidies and grants + what kind of subsidies can you apply, check out our Q&A with a subsidy and grants expert in Japan.

How We Can Help with Your Startup Subsidy Application

Applying for startup subsidies in Japan has become more competitive, making professional guidance crucial. Our team specializes in subsidy research and application preparation, handling all details to ensure your application stands out. Focus on your business while we help secure the financial support you need. Reach out to us today.

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 learn more about financial assistance startup subsidies from the Japanese government, listen to our podcast episode on How to 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.

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 reduce initial financial burdens, free or subsidized workspaces are provided to startups. These spaces encourage collaboration, idea exchange, and growth while helping reduce overhead costs. This allows entrepreneurs to use resources more effectively in the early stages. Below are examples of cities offering rent support:

• Fukuoka City Global Startup Center offers this as a subsidy, which you can learn more about in this podcast episode on Japanese Startup Cities with Akiko Nakagawa from Fukuoka GSC. Essentially, 5 spots are given out every April-June for both residential and office space subsidies. 
• 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

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. 

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

For businesses seeking to grow their revenue, effective mentorship plays a vital role in achieving growth and financial stability. At Scaling Your Company, we provide expert guidance to help you develop and implement marketing strategies that drive customer acquisition and revenue growth we have helped over 50 businesses with their revenue expansion in Japan. Whether you’re navigating B2C or B2B markets, our hands-on approach ensures that your marketing efforts are aligned with your overall financial goals. Book a free 45-minute consultation with us to explore how we can mentor and support your business’s marketing and financial success.

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 the support the Nagoya / Aichi government provides to startups, check out our podcast episode with StationAI.

The Ministry of Health, Labor, and Welfare (MHLW) supports various startup subsidies for career development in Japan, including 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 specific training period and several 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 costs (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.

List of startup subsidies in Tokyo

To aid you in your start-up journey, we’ve compiled a list of start-up subsidies that you can apply for according to your start-up’s needs.

List compiled by Francisco Dalla Rosa Soares

Active Subsidies

Any industry

General Merchandise industry

Startup incubation industry

Digital Technology industry

Industrial Technology industry

Manufacturing industry

Watch Real-World Examples:
This video demonstrates how startups use these subsidies in Japan, with specific examples of the application process and requirements:

Pro Tip: Pay special attention at 1:35 where they explain how to combine multiple subsidies – a strategy we’ll detail next.

Specific Criteria for Obtaining Subsidies in Japan

To obtain startup subsidies in Japan, potential recipients must meet certain specific criteria. These criteria vary based on different factors such as the business’s nature, the company’s origin, 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.

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

The Japanese government defines a startup as an innovative business with a focus on technology-driven solutions, exhibiting potential for growth and expansion. Startups are generally those that embrace disruptive technologies and new business models and demonstrate a commitment to research and development. The government encourages both domestic and foreign startups to contribute to Japan’s economic growth and innovation.

Eligibility Rules for Foreigners or Foreign Start-Ups

Foreign startups seeking subsidies must meet specific conditions to be eligible:

• Contribution to Economic Development: Startups must demonstrate their potential to create jobs, foster technological innovation, or address societal challenges.

• Legal Presence in Japan: The company must have a legal entity, such as a branch or subsidiary, established in Japan. In some cases, the company may need to demonstrate a clear intention to set up a business in Japan.

• Clear Business Plan: Applicants must submit a solid business plan that aligns with the objectives of the Japanese government, showcasing how the business will contribute to Japan’s economy, create jobs, or introduce innovative technologies.

• Resident Status: Founders or key executives must have a resident status that allows them to conduct business activities in Japan, such as a business visa or permanent residency.

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.

Criteria for Specific Subsidies

Different subsidies have specific eligibility rules, including:

1. Technology and R&D Subsidies: Startups applying for subsidies related to technological development or research must demonstrate a commitment to innovation. For example, in the case of the R&D tax credit, the business must show that it is engaged in significant technological development, typically involving product or process innovations.
2. Employment Subsidies: If applying for employment-related subsidies, such as subsidies for hiring young workers or those impacted by natural disasters, startups must provide evidence of hiring plans, and the number of jobs created, and meet minimum employment thresholds (e.g., having employees covered by employment insurance).
3. Local Economic Development Subsidies: Subsidies aimed at regional revitalization, such as those offered in Fukuoka or Hokkaido, are designed for startups that contribute to local economies by setting up businesses in underdeveloped regions. These grants often require companies to meet job creation targets and demonstrate the economic impact of their operations on the local community.
4. Industry-Specific Subsidies: Certain sectors, such as green tech, health tech, or digital transformation, have targeted funding. Startups in these sectors need to provide detailed plans showing how their business addresses sustainability, climate change, or technological advancements in alignment with Japan’s policy goals.
5. Specific Areas of Focus: Some subsidies are available for businesses operating in disaster recovery zones or those focused on smart cities, robotics, or AI. These programs may require startups to show how their innovations contribute to disaster resilience or urban sustainability.

Steps for Eligibility

1. Incorporation: Ensure your startup is legally incorporated in Japan. Foreign businesses often need to establish a subsidiary or branch office.
2. Government Registration: Some programs require businesses to be registered with certain government agencies, such as the Japan External Trade Organization (JETRO) or Ministry of Economy, Trade, and Industry (METI).
3. Document Preparation: Prepare all required documents, including financial statements, a business plan, and proof of residency for foreign entrepreneurs.
4. Application Submission: Submit your application to the relevant government authority overseeing the specific subsidy.
5. Review and Approval: Be prepared for a review process that may include interviews, site visits, or additional documentation requests.

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: Submit a detailed application outlining your business model, innovation goals, and the specific subsidy program. Review the application guidelines and ensure eligibility before submitting. You may need to sign up, register, or make a reservation in advance.

*Remember, writing these documents is a lot like writing an essay. Even those N1 in Japanese would find this difficult, so if you can 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.

• 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 start-up subsidy landscape is evolving, with city-level subsidies and investments supporting innovation. Agencies like METI and JETRO promote growth, offering flexible funding options and fostering cross-border collaboration. These subsidies focus on ventures with growth potential, innovation, and economic impact, positioning Japan as a global innovation hub for entrepreneurs.