How to Get Small Business Grants & Subsidies in Japan

Looking to find out how you can get small business grants and subsidies in Japan?  You've come to the right place!

If you have a small business in Japan or are thinking of starting one, you may be wondering where you can get funding for it.  Well, in addition, to the plethora of options such as venture capital, angel investors, loans, etc., you also have access to grants and subsidies as well.  And that is free money honey!

But as anyone knows who has lived in Japan, starting a business and applying for loans and grants are not as easy or straightforward as you would think.  It takes time and a good handle on the Japanese language.

And, if we're honest, that language part is the real kicker.  Because as you know, paperwork here can be a nightmare.  

So hopefully this guide can give you some insights into what you can expect and what you need when applying for small business subsidies and grants in Japan. Even if you don't understand the language, you can at least understand the process.  

How to Get Small Business Grants and Subsidies in Japan

The beauty of getting grants and subsidies from the government or other governmental agencies is that you don't have to pay the money back.  It is essentially free money that you can use for your business!

But, in order to get these grants/subsidies, you'll have to face stiff competition. The good news is that if you've never received the subsidy or grant before, you get priority.

What You'll Need

In order to get a grant or subsidy for your small business, you will need to make sure you have a few things ready.  The first being a solid business plan.  Not all of the programs require you to have already established your company (though most do!).  But ALL programs require a good, well-thought out business plan.

The second thing you will need is money.  These government programs expect you to have your own capital so don't think that they will fund your entire business or investment plan.  

They want to see that you are committed to your business and your plan.  And for that, they want to see that you have some skin in the game in the form of capital.

The Process

With an established Japanese company (or branch office), a great business plan, and some start up capital, you are now ready to start applying for grants and subsidies.

Even though there is no preference for Japanese or foreign owned companies, the application is completely in Japanese and must be completed in Japanese. This can add a layer of difficulty to those whose Japanese ability is not so great.

In that case, you'll want to have someone who is Japanese help you with the application process.  Preferably, someone who has experience with filling out the application.  

Don't worry there are places where you can go to get help!

Before you apply

Make sure you completely understand the purpose of the subsidy or grant AND have a business plan that is congruent with it.  You will need to express very clearly how your plan aligns with the purpose of the subsidy.  Especially, if you want to receive the subsidy.

In addition, be sure to make your business plan is understandable and easy to digest.  If it will help, include graphics and images to help the officials understand exactly what your business plan entails.

Furthermore, you'll want to check your application thoroughly, as any omission of important information or documents may disqualify you.

The Key Points

Note: 

If you want to apply for these small business grants and subsidies online, you will need a G-biz certification.  It takes about 2 weeks to get this certification.

Also, subsidies cannot fund 100% of your project.  At most, it will fund 2/3rds (with Corona adjustments 3/4ths) and you will be responsible for the rest.  Once approved for the subsidy, it can take 9 months to a year to actually receive the funds.

Because of the pandemic, many of these subsidies have increased their max funding amount as well as the percentage of the project they will fund.

What Kinds of Grants & Subsidies are Available?

Alright.  Now that you know what you need to start applying to small business grants here in Japan, let's take a look at which ones you can actually apply for.

Check out the Mirasapo site for a number of small business subsidies (補助金 in Japanese) including the ones mentioned below. 

Small Business Subsidy

This subsidy is available to all small businesses despite their industry.  It is to help businesses expand.  The subsidy could be used for things like creating a website, advertising, business conferences, remodeling, etc.

They typically give out a maximum amount of 500,000 yen (1M yen now due to the pandemic) and cover up to 2/3rds (3/4 due to the pandemic) of your investment plan.  

You can use the additional coverage for such things that support no human contact, work from home capabilities, remote business models, etc.

IT Related Subsidy 

The IT subsidy (IT導入補助金) is for companies who wish to use technology to increase their productivity.  You can use this subsidy to buy or improve current communication tools, customer relations systems, inventory control systems, reservation management systems, etc.

The maximum amount you could receive with this subsidy ranges from 300,000 yen to 4,500,000 yen.  And the max payout ratio is 1/2 (up to 2/3rds with pandemic provisions) of your project.

Subsidy to Increase Corporate Ability

The purpose of this subsidy (ものづくり補助金) is to help small and medium businesses improve production/manufacturing processes, introduce a new business model, or develop new products. 

To get this subsidy your business branch or office must be located in Japan and you must complete the investment within 10 months.  Small and medium businesses, NPOs, and sole proprietorships are eligible to get this subsidy.

For medium businesses, you can have up to 1/2 of your new plans covered with this subsidy.  And for small businesses, up to 2/3rds. The maximum amount you can receive ranges from 1,000,000 yen to 10,000,000 yen. 

If you have a global investment plan, you can get 1/2 of it covered with a max subsidy amount of 30 million yen.

You can find the application for all 3 of these subsidies here.  (Small business, IT, and Corporate Ability Subsidies)

Subsidy for Restructuring Your Business

This subsidy is a new addition this year and is for businesses looking to restructure or pivot (go in another direction).  Small and medium as well as oversized businesses are eligible to apply for this subsidy.

To apply, you must show that this year's sales is down more than 10% compared to last year's sales.  The payout ratio for small and medium businesses is 2/3rds with a maximum amount range of 1 million yen - 60 million yen.  

As for large business, the payout is 1/2 and the maximum ranges from 1 million yen - 80 million yen 

If received, investment must be completed within 12 months.

Local Government Subsidies for Entrepreneurs

There are also grants and subsidies for entrepreneurs given by local governments.  So be sure to check with your local ward office to see what is available.

Tokyo Metropolitan Government

The Tokyo Met. Government is an example of an agency that helps entrepreneurs in the local area.  They offer support to entrepreneurs in the Tokyo area that have a concrete business plan or that have businesses that are less than 5 years old.

The subsidy is through Tokyo Sogyo Station.  And applications are accepted twice a year: in April and October.  Its payout is a maximum of 3 million yen with a ratio of 2/3rds.  This subsidy can be used for labor costs, rent, advertising, etc.

To get this subsidy, there are a few terms and conditions that you must complete before you can apply.  

1. You must get support for starting a business with Tokyo Sogyo Station.  They offer a business plan training course, seminars, a startup incubator, and other options.  This can take more than 2 months.
2. Your business must be less than 5 years old.
3. You must have your office and tax center in Tokyo.
4. And finally, you cannot be delinquent in your taxes, must have the required permits, etc.

What it covers:

•  Office rental lease 
• Advertising costs
• Equipment costs (desks, chairs, air conditioner, etc. Max: 500,000 yen)
• Industrial property rights application fees
• Costs for expert guidance
• Employee labor costs

Note: The payout for this subsidy comes 3 - 4 months after you've already paid for everything for your business.  Furthermore, you have from 6 months after you submit for the subsidy until the 2 year mark to complete it.

Government Agencies Who Offer Grants, Subsidies, or Other Aid

If you are someone who wants to start a business in the future or are looking for help with your business, check out these resources.

JETRO

The Japan External Trade Organization, JETRO, was established in 1958 with the intention to promote Japanese exports.  Now, it is focused on promoting foreign investment and helping small/medium-sized Japanese companies go global.

They have a good list of incentive programs and tax breaks for investing in Japan as well as special subsidies that you can check out here.

The Japan Foundation

Established in 1972, the Japan Foundation is an organization dedicated to international cultural exchange.  They have many programs for Art and Cultural Exchange, Japanese language education (overseas), Japanese studies (overseas), Intellectual exchange, and strengthening cultural exchange in Asia. 

This foundation offers grants, scholarships, training programs, and other forms of support for companies active in these areas.

The Ministry of Economy, Trade and Industry (METI)

Unlike the other organizations so far, METI's focus is mainly on developing Japan's economy and industry by helping Japanese companies thrive and by "smoothly advancing external economic relationships, and... secur[ing] stable and efficient supply of energy and mineral resources." 

This organization is lots of information on current affairs, new grant offerings, statistics, and policies affecting businesses in Japan.  

TOSBEC

The Tokyo One-Stop Business Establishment Center, TOSBEC, is actually, quite literally, a one-stop shop when it comes to starting a new business in Japan.  TOSBEC will help you with filing all of the paperwork to start your business, getting a business manager visa, and more.  

They even have seminars and consultations on various concerns you may have when starting your business such as taxes and getting funding.

Other Great Organizations

• Through the Japan Finance Corporation you can get small business loans.  They have something for almost every situation.
• Start Up Lady and FEW are awesome organizations where you can meet like minded entrepreneurs, network, and further your career.  They also provide tons of great resources and events throughout the year.
• Also, you may want to check out, Kobe Startup Hub, Ignite Sendai, and Shibuya Startup Support. 

All in All

Getting the support you need to maintain your company in Japan can feel like a daunting task.  But there is support out there for all of your big projects and ideas if you just know where to look.

Hopefully, this post has given you a few more leads on where you can get the financial support you need for your small business.  

Let me know if you have any questions! And if you have successfully gotten grants in Japan, drop a comment below!  Would love to hear about your experience!

Good Luck!