Japan Startup Subsidies and Grants Guide: Funding Support Available to Entrepreneurs in Japan (2025 Update)

Starting a business in Japan means dealing with visas, company formation, and tax compliance. But there is one thing many founders overlook: the national and local governments may actually help fund your business.

Yes, real funding. Not necessarily a loan, but money you may not have to repay.

Every year, Japan provides financial support to small businesses and entrepreneurs through various subsidy programs (補助金 / hojokin) and grant programs (助成金 / joseikin). Foreign entrepreneurs in Japan can also apply. The problem is that many people either do not know these programs exist, or assume that “foreigners probably are not eligible” and give up before checking.

This article gives you a practical overview of Japan’s startup funding support system: what subsidies, grants, and financing are; which programs entrepreneurs commonly use; and what foreign founders should pay attention to when applying.

⚠️ Important: Subsidy and grant programs in Japan can change every year. Funding amounts, eligibility requirements, and application periods may all be revised. This article is based on information available in early 2025. Always confirm the latest official announcement for each program before applying.

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What is the difference between a subsidy and a grant?

Many people use 補助金 (hojokin) and 助成金 (joseikin) interchangeably, but they are not the same thing. Understanding the difference will help you identify the right type of support more efficiently.

Subsidies (補助金 / hojokin): competitive and screened

Subsidies are competitive and subject to review. You submit an application and business plan (事業計画書), and a review committee evaluates and scores it. Higher-scoring applications are approved, while lower-scoring ones are not. In other words, approval is not automatic.

• Administered mainly by: the Ministry of Economy, Trade and Industry (経済産業省) and related agencies
• Typical feature: larger funding amounts, but approval rates are often around 30% to 50%
• Key point: the quality of your application can make or break the result

Grants (助成金 / joseikin): condition-based and more predictable

Grants work very differently. If you meet the conditions, you can usually receive them. There is no ranking system and generally no competition in the same sense as subsidies.

• Administered mainly by: the Ministry of Health, Labour and Welfare (厚生労働省) and related agencies
• Typical feature: smaller amounts, but much higher certainty
• Key point: satisfy the conditions and submit the paperwork correctly

Financing (融資 / yushi): repayable, but on favorable terms

Financing means a loan, so it does need to be repaid. However, government-backed financing in Japan, especially through Japan Finance Corporation, often comes with very low interest rates and startup-friendly terms. In some cases, loans may be available without collateral or a guarantor.

In one line:

Type	Repayment required	Difficulty	Typical amount
Subsidy (補助金)	❌ No repayment	Competitive review, not guaranteed	Larger (JPY 500,000 to tens of millions)
Grant (助成金)	❌ No repayment	Available if conditions are met	Smaller (hundreds of thousands to around one million yen)
Financing (融資)	✅ Repayment required	Reviewed, but often more accessible	Larger (millions to tens of millions of yen)

The smart approach is often to combine all three: use financing for startup capital, subsidies for business growth, and grants to offset employment-related costs.

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Subsidies most commonly used by entrepreneurs

Below are some of the subsidy programs startup founders most often encounter under the METI-related system.

Small Business Sustainability Subsidy (小規模事業者持続化補助金 / shokibo jigyosha jizokuka hojokin)

This is one of the most accessible subsidies for entrepreneurs and one of the most widely used.

Overview: Supports small businesses (generally up to 20 employees, or 5 for commerce and service businesses) in expanding sales channels and improving operations.

Funding amount:

• Standard category: up to JPY 500,000
• Special categories (such as startup or wage increase categories): up to JPY 2,000,000
• Subsidy rate: generally 2/3 of eligible costs

What it can be used for:

• Building a website, flyers, or business cards
• Trade show and exhibition expenses
• Part of store renovation costs
• Advertising and promotional expenses

Why it is recommended:

• Relatively straightforward application process, especially suitable for early-stage businesses
• Includes a startup category for businesses within three years of filing their business commencement notice
• Multiple application rounds are often held each year

Important: Before applying, you usually need confirmation and support from your local Chamber of Commerce and Industry (商工会議所) or local business association (商工会). Do not ignore this step. These organizations are often willing to help, and the support is usually free.

Startup Support Provider Subsidy (創業支援等事業者補助金)

This subsidy is aimed more directly at the act of starting a business itself.

Overview: Supports people who start a business after receiving assistance through a certified municipal startup support program (特定創業支援等事業).

Funding amount: up to JPY 2,000,000, with a subsidy rate of 1/2

Eligibility requirements:

• You have received startup support from a certified municipality, such as a startup seminar or individual consultation
• You obtained a certificate for the certified startup support program
• Your business was started within the required timeframe

Key point: To apply, you usually need to participate in a government-recognized startup support program first and obtain the certificate. If you are still preparing to launch, it is worth visiting your local startup support desk early so you can secure this eligibility.

IT Introduction Subsidy (IT導入補助金 / IT donyu hojokin)

If your business uses digital tools, or you plan to adopt IT systems to improve efficiency, this program is worth watching.

Overview: Supports the introduction of approved IT tools such as software and cloud services for SMEs and small businesses.

Funding amount:

• Standard category: up to JPY 4,500,000
• Small business-focused category: up to JPY 1,500,000
• Subsidy rate: generally 1/2 to 3/4

Why it matters for entrepreneurs:

• Can help cover accounting software such as freee or Money Forward
• Can support POS systems or reservation management tools
• Can be used for e-commerce site implementation
• If you provide IT services, you may also be able to register as an approved IT support provider and assist clients with applications

Important: This subsidy only covers IT tools that are officially registered under the program. You cannot simply buy any software and claim it. Check the approved tool list before applying.

Monozukuri Subsidy (ものづくり補助金 / monozukuri hojokin)

The full name is the Manufacturing, Commerce, and Service Productivity Improvement Subsidy (ものづくり・商業・サービス生産性向上促進補助金). The name is long, but the program can be highly valuable.

Overview: Supports SMEs developing new products or services, or improving production and business processes.

Funding amount:

• Standard category: roughly up to JPY 7,500,000 to JPY 12,500,000
• Subsidy rate: generally 1/2 to 2/3

Best suited for:

• Manufacturing startups developing products or purchasing equipment
• Technology-driven businesses developing new services or systems
• Businesses with a clearly innovative plan

Difficulty level: Relatively high. You need a detailed business plan that explains the innovative aspect of your product or service and how it will improve productivity. But if you have a genuinely strong project, the available funding can be substantial.

Business Restructuring Subsidy (事業再構築補助金 / jigyo saikochiku hojokin)

This subsidy became especially popular during the pandemic and supported many businesses shifting into new lines of activity.

Current status: The standard application rounds for the Business Restructuring Subsidy ended in fiscal 2024. The government has indicated that follow-up measures may continue depending on economic conditions. As of 2025, some of its functions appear to have been absorbed into other subsidy schemes or continued under new frameworks and names.

Recommendation: If you are planning a major business pivot, keep an eye on the latest announcements from METI and the Small and Medium Enterprise Agency (中小企業庁). Similar support is likely to continue in some form.

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Employment-related grants under the Ministry of Health, Labour and Welfare

Once your company starts hiring employees, these grants become relevant. Most of them are tied to employment practices, and if you meet the conditions, they are often quite predictable.

Career Advancement Grant (キャリアアップ助成金 / career-up joseikin)

This is one of the most widely used employment grants.

Overview: The government provides support when a company converts non-regular employees, such as fixed-term staff, part-time workers, or dispatched workers, into regular employees.

Funding amount:

• Fixed-term to regular employee: up to JPY 800,000 per person for SMEs
• Fixed-term to indefinite-term employee: up to JPY 400,000 per person

Why it matters:

• Many startups initially hire part-time or contract staff
• If those employees are later converted to regular employment, this grant can offset personnel costs
• It is condition-based, so it is much more predictable than a competitive subsidy

Key requirements:

• You must prepare and submit a Career Advancement Plan (キャリアアップ計画) to the labor bureau in advance
• The employee must usually have been employed for at least six months before conversion
• Wages must generally increase by at least 3% after conversion

Important: The biggest mistake with this grant is timing. The plan must be submitted before the employment status change. If you try to apply afterward, it is too late.

Special Employment Development Grant for Specific Job Seekers (特定求職者雇用開発助成金 / tokutei kyushokusha koyo kaihatsu joseikin)

Overview: Available when you hire people who are considered to face barriers in the job market, such as older workers, people with disabilities, or single parents.

Funding amount: roughly JPY 300,000 to JPY 2,400,000 per person, depending on the category

Why it matters for startups: If you are open to hiring from a broader range of backgrounds, the government may provide meaningful support. For companies that are sensitive to staffing costs in the early stage, this can be worth considering.

Condition: The hire generally must be made through Hello Work (ハローワーク), Japan’s public employment service. Independent hiring usually does not qualify.

Work-Life Balance Support Grant (両立支援等助成金 / ryoritsu shien-to joseikin)

Overview: Supports companies that help employees continue working while raising children or caring for family members.

Main categories:

• Birth-related work-life balance course: up to JPY 600,000 when a male employee takes childcare leave
• Childcare leave support course: up to JPY 360,000 when an employee successfully takes and returns from childcare leave

Why it matters for startups: If someone on your team is having a child or needs to care for a family member, putting supportive systems in place can qualify for funding while also strengthening your company culture and hiring appeal.

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Japan Finance Corporation: the first financing option many founders consider

Subsidies and grants are valuable, but they have two practical limits: the amount may be limited, and many programs are reimbursement-based, meaning you need to pay first and get reimbursed later. That is why startup capital often still depends on financing.

Japan Finance Corporation (日本政策金融公庫 / Nihon Seisaku Kin’yu Koko) is a government-owned financial institution that specializes in lending to SMEs and startups. Compared with private banks, its biggest advantages are that it is startup-friendly, relatively flexible in screening, and offers low interest rates.

New Business Startup Loan Program (新創業融資制度 / shin sogyo yushi seido)

Overview: A dedicated financing program for entrepreneurs before launch or within roughly the first two tax filing periods after startup.

Main advantages:

• No collateral and no guarantor in principle
• Maximum loan amount: up to JPY 72,000,000, including up to JPY 48,000,000 in working capital
• Interest rate: roughly 2% to 3%, depending on the case
• Repayment period: up to 20 years for equipment funds, up to 10 years for working capital

What founders actually receive in practice: Although the formal ceiling is JPY 72,000,000, first-time startup borrowers more commonly receive around JPY 3,000,000 to JPY 10,000,000.

Key points for foreign applicants

This is one of the biggest questions foreign founders have: can non-Japanese entrepreneurs actually borrow from Japan Finance Corporation?

Yes, they can. But there are several important points to keep in mind:

1. Status of residence: You need a residence status that allows you to conduct business activities. The most straightforward one is the Business Manager visa (経営・管理). For more on the requirements, see this article.

2. Remaining visa period: If your current period of stay is close to expiry, it may work against you in screening. Applying after your renewal, with a longer remaining validity period, is generally better.

3. Business plan: This is the core of the review. You will usually need a detailed business plan in Japanese explaining your business model, market analysis, and financial projections. For guidance on how to write one, see this business plan guide.

4. Own funds: As a rough rule, it helps to have personal capital equal to about one-third to one-half of the amount you want to borrow. If you want to borrow JPY 5,000,000, having JPY 1,500,000 to JPY 2,500,000 of your own funds is preferable.

5. Credit record: Your credit history in Japan, such as credit card payments or installment payments for mobile devices, may be reviewed. Avoid late payments.

Application process:

1. Prepare your business plan and required documents
2. Make an appointment with the nearest Japan Finance Corporation branch
3. Attend the interview, usually about one hour and generally in Japanese
4. Screening, usually around two to three weeks
5. Loan agreement and disbursement if approved

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Startup support from local governments

In addition to national programs, prefectures and municipalities across Japan run their own startup support schemes. In some cases, local support can be even more generous than national programs.

Tokyo Startup Grant (東京都創業助成金 / Tokyo-to sogyo joseikin)

If you are starting a business in Tokyo, this is a program you should know.

Overview: A startup grant provided by the Tokyo Metropolitan Small and Medium Enterprise Support Center.

Funding amount: up to JPY 4,000,000, with a subsidy rate of 2/3

Conditions:

• You are starting a business in Tokyo, or planning to do so
• You have completed a designated startup support program, such as a business plan program at TOKYO Startup Station

Feature: The amount is relatively large and the eligible scope is broad, including personnel costs, advertising costs, and equipment expenses. It is one of the first programs Tokyo-based founders should check.

Local programs in other regions

Do not worry if you are not in Tokyo. Many other regions offer their own startup support:

• Osaka Prefecture: various startup support subsidies through the Osaka Business Development Agency
• Fukuoka City: especially strong startup support, including its own startup visa framework
• Nagoya City: startup subsidies and low-interest financing programs
• Hokkaido, Okinawa, and other regions: often provide attractive terms to draw in entrepreneurs

How to find the right support for your situation

With so many programs out there, how do you narrow them down? These are some practical ways:

1. Mirasapo Plus (mirasapo-plus.go.jp): an official search platform operated by the Small and Medium Enterprise Agency, where you can search subsidies by region, industry, and purpose
2. J-Net21 (j-net21.smrj.go.jp): a business support information platform run by the Organization for Small & Medium Enterprises and Regional Innovation
3. Your local Chamber of Commerce and Industry / 商工会: visiting in person often gets you tailored recommendations
4. Yorozu Support Centers (よろず支援拠点): free one-stop SME consultation centers in each prefecture
5. Startup support centers and incubators: such as TOKYO Startup Station

Recommendation: Do not rely only on online research. Go talk to the support desk directly. Online information can lag behind reality, but the staff at these offices usually know the latest details, and in-person consultation is generally free.

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Important points for foreign entrepreneurs applying for subsidies

In principle, Japanese subsidies and grants are not limited by nationality. If you operate a business legally in Japan, you can be eligible. But in practice, foreign founders should pay attention to several issues.

Residence status requirements

Applying for a subsidy does not necessarily require one specific visa type, but you do need to be legally authorized to conduct business activities in Japan. In practice:

• If you hold a Business Manager visa (経営・管理), that is fine
• If you are a Permanent Resident (永住者), Spouse of Japanese National, or Long-Term Resident, that is also fine
• If you hold a standard work visa such as Engineer/Specialist in Humanities/International Services, you need to confirm whether side-business activities are allowed
• If you hold a student visa, business activities are generally not permitted beyond the scope of authorized part-time work

For more on the relationship between visa status and company formation, see this company setup guide.

Japanese language ability

For foreign applicants, this is often the biggest real-world hurdle, even if it is not a formal rule.

• Applications generally must be written in Japanese, and not just basic Japanese, but in a style suitable for formal review
• Interviews, if required, are generally conducted in Japanese
• Communication with support bodies such as Chambers of Commerce is also usually in Japanese

What if your Japanese is not strong enough?

1. Hire a Small and Medium Enterprise Management Consultant (中小企業診断士 / chusho kigyo shindanshi) to help prepare the application
2. Use bilingual startup support desks, which are more common in major cities such as Tokyo
3. TOKYO Startup Station also offers support for foreign entrepreneurs

How to write a strong application

A subsidy application is not just a statement that you want money. Reviewers are looking at:

1. Business specificity: what exactly the business is, how it makes money, and what market it serves
2. Feasibility: whether the plan is realistic and supported by evidence
3. Need for the subsidy: why this funding is necessary and why the project would be difficult without it
4. Measurable impact: how much sales growth or operational improvement is expected after receiving the subsidy

For more on business plan writing, see the business plan guide.

The role of tax accountants and SME consultants

Two types of professionals are especially useful in Japan when applying for subsidies:

Tax accountants (税理士 / zeirishi):

• Handle your tax filings, which are often a prerequisite for subsidy applications
• Prepare financial documentation
• For startup tax basics, see the tax guide

SME management consultants (中小企業診断士 / chusho kigyo shindanshi):

• Help write subsidy applications, which is one of their core specialties
• Provide business advisory support
• Some consultants specialize in subsidy applications and charge a success fee of around 10% to 20% of the awarded amount

Recommendation: If your Japanese is limited or this is your first subsidy application, working with an experienced SME consultant is often an efficient investment. It can materially improve your chances of approval.

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Frequently Asked Questions

Q1: Can foreigners really apply for Japanese subsidies?

Yes. Japanese subsidy and grant programs are generally not restricted by nationality. If you have legally established a company in Japan, or registered as a sole proprietor, and you are filing taxes properly, you can apply. The real issue is not your passport. It is the quality of your business plan and application materials.

Q2: Do you receive the subsidy money upfront or afterward?

In most cases, afterward. Most subsidies are reimbursement-based. You generally need to pay for the project first, complete it, and then submit reports and supporting documents before the money is disbursed. That is why many founders also arrange financing at the same time.

Q3: Is it easier to get a subsidy as a sole proprietor or as a company?

Both can apply, and there is no absolute rule that one is always easier than the other. In practice, however, an incorporated company, especially a joint-stock company (Kabushiki Kaisha / 株式会社), may sometimes appear more formal in financing applications. For the difference between a Kabushiki Kaisha and a Godo Kaisha, see this article.

Q4: Can I apply for multiple subsidies at the same time?

Yes, but watch out for duplicate funding rules. The same expense item cannot usually be reimbursed through two different subsidies. For example, if you spend JPY 1,000,000 on a website, you cannot claim half of that under one subsidy and the other half under another for the same cost. Different expense categories may still be eligible under different programs, depending on each program’s rules.

Q5: How long does it take to receive subsidy money?

From preparation to payment, six months to one year is common. A typical flow is: application preparation for one to two months, submission during the public application period, screening for one to two months, approval notice, project implementation over several months, report submission, final inspection, and then payment. It is not realistic to expect the money next month.

Q6: What if my subsidy application is rejected?

You can usually apply again. Many subsidy programs open multiple rounds each year. If you are not selected this time, you may be able to revise and reapply in the next round. In many cases, you can also review the evaluation result and identify weaknesses in your previous application.

Q7: Can I apply before starting the business, or only after?

Many subsidies require that you have already started the business, meaning you have filed a business commencement notice or established a company. But some programs, such as the Startup Support Provider Subsidy, are aimed at people who are preparing to launch. On the financing side, Japan Finance Corporation’s startup loan programs may also be available before launch.

Q8: Can I apply for grants if I have no employees and am the only director?

Most employment-related grants under the Ministry of Health, Labour and Welfare are built around hiring, so if you have no employees, most of those grants will not apply. However, METI-related subsidies such as the Small Business Sustainability Subsidy or the IT Introduction Subsidy do not require employees, so a solo founder can still apply.

Q9: Is subsidy income taxable?

Yes. Subsidies and grants are generally treated as miscellaneous income (zatsu shunyu / 雑収入) for tax purposes and must be reported. That said, because you usually also have matching business expenses, the practical tax impact is often manageable. For specific treatment, consult your tax accountant.

Q10: I just received my Business Manager visa. When should I start preparing for subsidies?

As early as possible, but in the right order. A practical sequence is:

1. Stabilize operations and complete your first tax filing
2. Within three to six months after establishment, visit a Chamber of Commerce or Yorozu Support Center for a free consultation
3. Based on your business stage and needs, focus on the one or two subsidy programs that fit best
4. Consider financing in parallel if needed

Do not try to apply for everything at once. Concentrating your effort on the most suitable programs is usually more effective than scattering your attention across ten applications.

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To close with one practical point: Japan’s startup support system is actually quite robust. The issue is usually not whether support exists, but whether founders know where to look and how to use it. For foreign entrepreneurs, the extra challenges are language and access to information. But if you are willing to invest time in understanding the system and speaking to the right support desks, this funding is genuinely available.

Starting a business is already difficult enough. If support is available, there is no reason to leave it on the table.