How Can Chinese-Owned Restaurants in Japan Secure Subsidies? A Two-Pronged Guide to Labor-Saving + Regularization

This article systematically introduces the concrete paths for Chinese-owned restaurants in Japan to obtain subsidies, including common subsidy programs, eligibility requirements, application procedures, and a guide to avoiding pitfalls.

A Panoramic View of Japan's Restaurant Industry Subsidies

Why Does the Japanese Government Subsidize Restaurants?

Japan's restaurant industry faces a severe demographic problem. According to data from Japan's Ministry of Health, Labour and Welfare, the food service industry was short more than 400,000 workers in 2023. To help small and medium-sized restaurant businesses survive and grow, both the central and local governments of Japan have introduced subsidy systems covering two major directions: "labor-saving investment" and "human resource optimization."

These subsidies generally do not need to be repaid (they are not loans), and their coverage includes:

• Equipment purchase and renovation: automatic cooking machines, self-service checkout systems, kitchen automation equipment, etc.
• Digital transformation: POS system upgrades, order management systems, inventory management software
• Improved employee conditions: pay raises, better social insurance coverage, skills training
• Store renovation: barrier-free renovations, kitchen modernization

A Detailed Look at the Core Subsidy Programs

"Labor-Saving Investment Subsidy" (Act on Special Measures for Productivity Improvement)

This is the subsidy program most widely used by Chinese business owners, and it continued to be implemented in 2024.

Subsidy amount and rate:

• Subsidy ceiling: up to JPY 5 million (up to JPY 10 million under specific conditions)
• Subsidy rate: typically 1/2 to 2/3 of the investment amount
• Reimbursement cycle: 6–12 months

Concrete case: A Chinese fast-food chain located in Tokyo invested JPY 3 million to purchase 2 automatic cooking machines and 3 self-order kiosks, ultimately receiving JPY 1.5–2 million in subsidy. Its actual outlay was only JPY 1–1.5 million, dramatically shortening the payback period.

Eligibility requirements:

1. 5 or more employees (including the business owner)
2. You must prepare an investment plan explaining why labor-saving is needed
3. You must state the expected benefits after labor-saving (e.g., a productivity gain of 20% or more)
4. The company must submit financial statements for the previous 3 years

Timing notes: This type of subsidy usually opens for applications in phases. The 2024 application deadline typically falls between June and September. If you have not applied yet, you must act quickly.

"Human Resource Securing Support Program"

A subsidy targeting improvements to employee conditions and greater employee retention.

Subsidy content:

• Base pay increase subsidy: for monthly wage increases of 3% or more, a subsidy of JPY 30,000–50,000 per person per month, for up to 12 months
• Social insurance improvement subsidy: support for regularizing non-regular employees
• Skills training subsidy: for cooking skills and management capability training, up to JPY 200,000 per person

Applicable scenario: Your restaurant has 15 employees, of whom 10 are dispatched or part-time. Through this subsidy program, you can convert 5 core employees into regular employees, receiving a subsidy of JPY 40,000 per person per month for 12 months. If an employee's monthly wage rises from JPY 200,000 to JPY 206,000 (3%), you can also receive an additional subsidy. The total annual subsidy can reach more than JPY 2.4 million.

Eligibility requirements:

1. 3 or more employees
2. You must draw up a human resource securing plan
3. You must sign new employment contracts with the employees
4. Submit pre- and post-improvement pay schedules, social insurance certificates, and other documents

The Two-Pronged Play: Labor-Saving + Regularization

Phase 1: Diagnosis and Planning (1–2 months)

Step 1: Conduct a labor cost analysis

Review your store's operating data:

• How many employees do you currently have? What is your total monthly wage expenditure?
• Which positions are most prone to labor shortages?
• What is your turnover rate? What are the average reasons for leaving?

Take a yakitori restaurant with 8 employees and a total monthly wage expenditure of JPY 2.6 million as an example:

• Kitchen: 4 people; front of house: 3 people; store manager: 1 person
• Biggest pain point: kitchen understaffing, requiring dispatched workers during peak season
• Turnover rate: 30% per year, mainly due to low pay and heavy workload

Step 2: Draw up a labor-saving plan

Do not buy equipment blindly—be targeted:

• Problem analysis: kitchen understaffing → purchase automatic cooking machines and automatic skewer-cutting machines (can reduce the need for 1–2 cooks)
• Front-of-house bottleneck: slow order processing → upgrade to a self-order system + cloud POS system
• Labor costs: monthly wage expenditure too high → equipment investment can reduce the need for low-skill employees, leaving room to raise pay for high-skill employees

Expected investment: 2 automatic cooking machines (JPY 1.2 million) + 3 self-order kiosks (JPY 900,000) + POS system upgrade (JPY 400,000) = JPY 2.5 million

Step 3: Human resource optimization plan

Plan employee structure adjustments in parallel:

• Reductions: 2–3 low-efficiency dispatched employees
• Regularization: convert 3 core members among current part-timers into regular employees, raising each one's monthly wage by 10–15%
• Training: provide management or specialized skills training for retained technical staff

Phase 2: Subsidy Application (2–3 months)

Application milestones:

| Subsidy program | Application deadline | Best time to apply | |---------|-------------|-----------| | Labor-saving investment subsidy | Usually June–September | The earlier the better; limited quota | | Human resource securing support | Usually April–October | Stagger from the labor-saving application; apply for labor-saving first | | Local government subsidies | Various times year-round | Consult your local chamber of commerce and industry |

Concrete procedure:

1. Prepare documents (1 week)

   • Copy of the commercial register
   • Financial statements for the previous 3 years (settlement reports)
   • Investment quotations (price quotes for equipment purchases)
   • Business plan (why labor-saving is needed and what results are expected)
   • Employee roster and payroll ledger

2. Consultation and revision (1–2 weeks)

   • Consult via the chamber of commerce and industry or an SME Management Consultant, and revise the plan
   • Many subsidy reviews are strict; the quality of the plan directly affects the approval rate
   • It is advisable to seek help from a professional consultant; fees are typically JPY 20,000–50,000, but they can substantially raise the approval rate

3. Formal application (1 week)

   • Submit through the online system or by mail to the designated department
   • Confirm the application number and keep all receipts

4. Review period (4–8 weeks)

   • Supplementary explanations may be required
   • The government department will confirm the project details by phone
   • Be prepared to receive an on-site inspection (a visit to your store)

5. Obtaining adoption

   • Receive the notice of adoption
   • Note: you may only make the actual investment after adoption is obtained; investment made in advance is not eligible for subsidy
   • Carry out procurement and renovation in accordance with the adopted content

6. Post-completion reporting and reimbursement (3–6 months)

   • Submit purchase invoices and proof of payment
   • Bank transfer records and other supporting evidence
   • After the review is passed, the subsidy is returned to your account within about 1–2 months

Frequently Asked Questions (FAQ)

Q1: My restaurant is a sole proprietorship—can I apply for a subsidy?

A: Yes. Both sole proprietors and corporations are eligible to apply, but you must meet the minimum employee count requirement. The Labor-Saving Subsidy generally requires 5 or more employees (including the business owner), while human resource securing support requires only 3 or more. If you currently do not have enough employees, you can first convert to corporate form, which is itself a form of formalization. Note that a sole proprietor must provide personal tax filings (final tax returns) rather than corporate financial statements when applying, and the review requirements are equally strict. We recommend consulting a tax accountant to confirm your specific eligibility so as not to waste effort. Many local chambers of commerce and industry also offer free consultations—make use of that.

Q2: I've already purchased equipment and only now learned about the subsidy—can I still apply?

A: Unfortunately, generally no. Almost all Japanese government subsidies follow the principle that "procurement before adoption is prohibited." That is, you must first obtain the "notice of adoption" for the subsidy before you can make the purchase. If you have already spent money buying equipment, you usually cannot apply for the subsidy. There are, however, a few exceptions: some local government subsidies allow "after-the-fact application," but this requires you to already have the original invoices and proof of payment. We strongly recommend immediately consulting your local chamber of commerce and industry or SME support center to see whether any remedy exists. If you truly cannot apply for the Labor-Saving Subsidy, you may consider applying for human resource securing support, which has looser restrictions on procurement timing.

Q3: When applying for a subsidy, is the distinction between dispatched workers and regular employees important?

A: Very important. It directly affects two types of subsidy. First, in the human resource securing support application, "regularization" (dispatched worker → regular employee) is itself a subsidy target, and you can receive JPY 30,000–50,000 per person per month. Second, employees of different statuses are also assessed differently for "base pay increases"—some subsidies require that an employee be a regular employee to qualify for the pay-raise subsidy. Therefore, even if you are currently short-staffed, you should consider converting core dispatched workers into regular employees, so you can both obtain the regularization subsidy and benefit from the pay-raise subsidy. Although the additional costs of regularization, such as social insurance, will increase, they are often fully covered by the subsidy, or even more. We recommend consulting a human resources advisor to draw up a reasonable regularization plan.

Q4: From application to finally receiving the funds, how long does it usually take? Starting now, how soon can I receive the money?

A: The entire cycle is usually 6–12 months, broken down as follows: the application preparation phase takes 1–2 months; after submitting the online application, waiting for adoption usually takes 4–8 weeks; only after receiving the notice of adoption can you make purchases (the procurement cycle depends on the equipment, usually 1–3 months); finally, after submitting the post-completion reporting materials, the final funds are returned in 1–2 months. If you start preparing documents now, you could receive the notice of adoption in as little as 3–4 months, and adding procurement and post-completion reporting, the whole process may take 6–9 months. This means that if you want to receive the subsidy before the end of this year, you must act immediately. Do not wait and do not hesitate, because each subsidy program has a total budget limit every year, on a first-come, first-served basis. We recommend arranging a meeting with a subsidy advisor at your local chamber of commerce and industry right away.

Q5: Will applying for a subsidy trigger a review by the tax authorities or affect my tax credibility?

A: This is a worry for many Chinese owners, but the answer is basically no. The documents involved in a subsidy application (financial statements, employee rosters, etc.) and tax audits are two separate systems. Applying for a subsidy only requires that your relevant materials be complete and truthful, and it has no necessary connection to whether you have evaded taxes. On the flip side, however, if your books themselves have problems (e.g., incomplete cash transaction records, or reported employee wages that don't match reality), the document review during the subsidy application may inadvertently expose these issues. Therefore, applying for a subsidy is actually a mechanism that forces you toward compliance. We recommend consulting a tax accountant before applying to ensure that your books, social insurance filings, and tax filings all meet requirements. Doing so not only raises the approval rate of your subsidy application but, over the long term, also lowers your tax risk—a win-win.

Real-World Cases of Chinese-Owned Restaurants Securing Subsidies

Case: A Malatang Chain in Shibuya, Tokyo

Background: The restaurant had 12 employees (including the store manager) and a monthly wage expenditure of JPY 3.4 million. It was in difficulty due to kitchen understaffing and a high turnover rate (45% per year).

Application strategy:

1. Invested JPY 3.5 million to purchase 3 automatic cooking machines, a self-order system, and inventory management software
2. Converted 5 dispatched workers into regular employees and raised base pay by 8%
3. Provided cooking and management training for 3 technical staff

Results:

• Labor-saving subsidy: received JPY 2 million (57% of the investment)
• Human resource securing support: received JPY 2.4 million (5 people × JPY 40,000 × 12 months)
• Total subsidy: JPY 4.4 million, with an actual outlay of only JPY 2.5 million
• One year later: the kitchen's staffing need dropped from 4 to 3, but skilled employees' monthly wages rose to JPY 220,000, and the retention rate climbed to 95%
• ROI: an investment of JPY 2.5 million saved about JPY 800,000 in labor costs per year, recovering the principal in two years

Case: A Chinese Hot Pot Restaurant in Nagoya

Background: A sole proprietorship with 6 employees; the main problems were a lack of systematic management and serious food waste.

Application strategy:

1. First converted to corporate form (a small joint-stock company) to ensure the employee count met requirements
2. Applied for the Labor-Saving Subsidy, investing in an inventory management system, a POS system upgrade, and refrigerator renovation (JPY 2 million in total)
3. Applied for a local government subsidy (Nagoya City's SME support center offers additional subsidies)

Results:

• Labor-saving subsidy: received JPY 1.2 million
• Nagoya City subsidy: received JPY 500,000
• Actual outlay of only JPY 300,000
• After implementation, food costs fell by 12%, the inventory turnover cycle shortened by 3 days, and annual costs dropped by about JPY 400,000

Common Landmines in the Application and a Guide to Avoiding Them

Landmine 1: An overly simplistic plan

Many Chinese owners think applying is just filling out a form, but in reality the core of a subsidy is "the quality of the plan." The government department needs to see your real difficulties, a reasonable solution, and quantified expected results.

How to avoid it:

• The plan must include three parts: a current-situation analysis (with specific figures), a labor-saving proposal, and expected results (quantifiable)
• It is best to present with charts—don't make it all text
• Invite an SME Management Consultant to help revise it; a fee of JPY 20,000–30,000 substantially raises the approval rate

Landmine 2: Announcing you've secured the subsidy before procurement

Some owners tell employees or friends before procurement that "I've already applied for the subsidy." But in reality, this stage is merely "application" and far from "adoption." If you procure before adoption, the subsidy will be canceled.

How to avoid it:

• Keep a low profile after applying and do not disclose it to others
• Only start procurement after receiving the government's "notice of adoption"
• Keep all original supporting documents (invoices, proof of payment) when procuring

Landmine 3: Mismatched employee information

Some stores overstate their employee count or wages to meet subsidy conditions. This is a serious violation of the law; once discovered, you will be required to return the entire subsidy and face fines.

How to avoid it:

• All employee information must match social insurance and tax filings
• Wage figures must match bank transfer records
• Do not temporarily hire employees to pad the numbers

Landmine 4: Ignoring local government subsidies

Many Chinese owners apply only for central government subsidies, unaware that local governments also have dedicated subsidy programs. Some local subsidies are even more lenient than central ones.

How to avoid it:

• Consult your local chamber of commerce and industry or your prefecture's/city's SME support center
• Many local government subsidies can be applied for in parallel with central subsidies
• Use "subsidy search websites" (such as Mirasapo) to look up all applicable subsidies

Your Next-Step Action Checklist

If you are considering applying for a subsidy for your restaurant, take the following actions immediately:

Week 1: Information gathering

• Visit mirasapo-plus.go.jp or your prefecture's SME support center website
• List all currently applicable subsidy programs and their deadlines
• Download application guides and case documents

Weeks 2–3: Preliminary diagnosis

• Conduct a labor cost analysis (what is your current monthly wage expenditure?)
• Identify your biggest pain point (which position is most short-staffed?)
• Make a preliminary assessment of your labor-saving investment needs (how much do you expect to invest?)

Week 4: Consult experts

• Call your local chamber of commerce and industry hotline and book a free consultation (usually in Japanese; let them know in advance if you need translation)
• Consult an SME Management Consultant or subsidy advisor (Chinese owners may prefer to find an advisor who understands Chinese)
• Have your financial data and employee information ready for the advisor to review

Weeks 5–8: Prepare the application

• Gather the necessary documents (financial statements, employee roster, etc.)
• Work with the advisor to write the plan
• Multiple rounds of revision and refinement

Week 9: Formal submission

• Submit the application before the deadline
• Keep all proof of submission

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Act now, don't procrastinate. Japan's subsidies are the government's support policy for small and medium-sized enterprises; you have both the right and the duty to learn about and apply for them. Rather than worrying every month about labor shortages and high costs, spend 2–3 months of effort applying for a subsidy—you may receive several million yen of support in one go, which can bring a qualitative change to how your restaurant operates.

If you need professional subsidy application consulting and plan-writing services, you are welcome to contact us for a free initial consultation. We have extensive experience with subsidy applications for Chinese-owned restaurants, understand the specific challenges you face, and can help you draw up the most suitable labor-saving and human resource optimization plan. In Japan's fiercely competitive restaurant market, subsidies may be your breakthrough.