Why Should Beauty Salons Apply for Subsidies? A Practical Analysis
To support the development of SMEs—especially during the post-pandemic economic recovery—the Japanese government has introduced a variety of subsidy programs. As a labor-intensive service industry, the beauty sector faces several core challenges:
Cost pressure: Beauty salons' rent, labor costs, and equipment renewal investments rise every year. Take Tokyo as an example: a mid-sized beauty salon (3–5 employees) has a monthly rent of JPY 600,000–1,200,000 and annual labor costs of JPY 3,000,000–6,000,000.
Equipment renewal needs: Investment in advanced beauty devices and skincare product equipment requires JPY 2,000,000–5,000,000, which is very burdensome for startups or businesses undergoing transformation and upgrading.
Skills training investment: Employee skills training and the introduction of new techniques are also a significant expense.
By applying for Japanese government subsidies, beauty salons can obtain a subsidy rate of 30%–70%, which means that if you invest JPY 5,000,000 in new equipment, the government may subsidize JPY 1,500,000–3,500,000.
Main Types of Subsidies Available to Beauty Salons
Sustainability Subsidy for Small-Scale Operators (小規模事業者持続化補助金)
This is currently the most suitable subsidy program for beauty salons to apply for, managed by Japan's SME Agency.
Subsidy amount:
- Basic tier: up to JPY 500,000
- Low infection-risk tier: up to JPY 1,000,000
- Graduation tier: up to JPY 2,000,000 (for businesses that have previously received subsidies)
Application conditions:
- Fewer than 20 employees (beauty industry)
- A decline in sales in the fiscal year before application, or business difficulties due to the pandemic or other causes
- At least 1 year of operation (conditions may be relaxed in some application years)
Eligible expenses:
- Labor costs (employee wages)
- Rent (store rent)
- Equipment costs (beauty devices, furniture)
- Advertising and promotion costs
- Travel expenses
- Outsourcing costs
Subsidy rate: 2/3 (i.e., the government subsidizes 2/3, the business pays 1/3)
Monozukuri Subsidy (ものづくり補助金)
This subsidy mainly applies to beauty businesses with product development or production innovation needs.
Use cases:
- Independently developing a skincare product line
- Beauty technology innovation (e.g., introducing new beauty treatments)
- Building an online beauty consultation platform
Subsidy amount: up to JPY 10,000,000
Subsidy rate: 1/2
AI / IT Adoption Subsidy (IT導入補助金)
A subsidy program suitable for the digital transformation of beauty salons.
Subsidy targets:
- Building a reservation system
- Customer management system (CRM)
- Point-of-sale system (POS)
- Online store construction
Subsidy amount: up to JPY 3,500,000
Subsidy rate: up to 1/2
Employment Adjustment Subsidy (雇用調整助成金)
When a beauty salon needs to temporarily adjust employees' working hours due to seasonal factors or business difficulties, it can apply for this subsidy.
Subsidy content:
- Part of the leave-of-absence compensation
- Subsidy for employee training costs
Subsidy rate: usually 50–80%
The Specific Process for Beauty Salon Subsidy Applications
Step 1: Advance Preparation
1. Confirm company eligibility
First, confirm whether your company meets the application conditions. For Chinese business owners in Japan running beauty businesses, pay special attention to:
- Holding Japanese corporate status or sole-proprietor registration
- If a sole proprietor, ensuring a complete tax filing record (at least 1 year)
- Checking whether the company has overdue taxes or legal issues
2. Prepare the required documents
- Corporate registration certificate (for corporations) or Individual Number Card (for individuals)
- Tax returns and financial statements for the past 3 years
- Copies of bank passbook (the past 6 months of records)
- Lease agreement for the business premises
- Employee roster and payroll ledger
3. Formulate a management innovation plan or subsidy project plan
This is the core document of the subsidy application. It needs to explain:
- Analysis of the current business situation
- Why you need this subsidy
- The specific investment plan and expected results
- A detailed budget for fund usage
Step 2: Preparing the Application Form
The core parts of the application form include:
Management Plan You need to explain in detail in Japanese:
- The company's current status: number of employees, annual revenue, main service offerings
- Existing problems: competitive pressure, skill shortages, aging equipment, etc.
- Improvement plan: specific investments and improvement measures
- Expected results: how to increase revenue or reduce costs
Business Plan Table
- Investment breakdown (which equipment to purchase, unit price, total amount)
- Explanation of fund sources (how much you invest yourself, how much subsidy you apply for)
- Expected sales growth or cost savings figures
Step 3: Document Submission
- Online submission: Most subsidy programs support online application via the "jGrants" system
- Submission deadlines: Each program usually has 2–3 application periods per year; you need to watch announcements in advance
- Review period: Usually requires 1–3 months
Step 4: Review and Adoption
The government department reviews the application, with evaluation criteria including:
- Feasibility of the business plan (30% weight)
- Potential for management improvement (30% weight)
- Contribution to the local economy (20% weight)
- Soundness of financial condition (20% weight)
Step 5: Receiving the Subsidy
After adoption, the business must execute according to plan and then submit to the government department:
- Monthly expenditure reports
- Payment certificates (e.g., purchase invoices)
- Interim and final results reports
After the government confirms everything is in order, the subsidy is transferred to the company's designated bank account in installments.
Key Success Factors for Beauty Salon Subsidy Applications
Writing a Strong "Management Innovation Plan" Is Core
I have seen many Chinese-owned beauty businesses in Japan fail in their applications, mainly because the plan was not specific enough and lacked data support. A good plan should include:
Specific figures and facts
- Wrong example: "We need to upgrade our equipment to improve competitiveness"
- Right example: "The RF beauty device we currently use has been in service for 8 years, with a failure rate reaching 15%, leading to an increase in customer complaints on average each month. A new RF device requires an investment of JPY 3,500,000, expected to improve service efficiency by 25% and increase annual revenue by 15–20% (from the current JPY 25,000,000 to JPY 29,000,000)"
Clear investment details
- The specific equipment name, brand, and price to be purchased
- If multiple investments, rank them by priority
- Explain why you chose this brand and model
Credible outcome forecasts
- Don't overstate results; 30%–40% growth is reasonable
- Explain the specific paths of growth (more customers, higher customer spending, improved employee productivity)
Standardization of Financial Data
Among Chinese-owned beauty businesses in Japan, some may have non-standard tax filing. To apply for subsidies smoothly, you need to:
- Ensure that the tax filings (确定申告) for the past 3 years were all submitted on time
- Have clear transaction records in bank accounts
- Avoid large cash transactions and use bank transfers as much as possible
- Keep all business proof (contracts, invoices, customer records, etc.)
Choosing the Right Application Timing
- During the pandemic recovery: In 2023–2024, the beauty industry still had priority support policies
- Seasonal considerations: Avoid choosing your industry's off-season as the application baseline period (because subsidies are often reviewed based on a decline in revenue compared with a reference period)
- Plan ahead: Start preparing 3–6 months before submitting the application to ensure complete documents
Real Beauty Salon Application Cases
Case 1: Equipment Upgrade for a Small Beauty Salon
Company situation:
- Location: Shibuya-ku, Tokyo
- Scale: a small beauty salon with 3 employees
- Annual revenue: about JPY 18,000,000
- Reason for applying: old equipment causing customer loss
Subsidy applied for: Sustainability Subsidy for Small-Scale Operators, Basic Tier
Investment plan:
- New beauty devices (RF, ultrasonic knife): JPY 3,500,000
- Employee training: JPY 500,000
- Promotional material renewal: JPY 300,000
- Total investment: JPY 4,300,000
Application result: Received a subsidy of JPY 2,870,000 (subsidy rate 2/3); the business paid JPY 1,430,000
Results:
- 6 months after the investment, the number of customers increased by 18%
- Average spending per customer rose by 12%
- Annual revenue grew to JPY 21,000,000
Case 2: Digital Transformation of a Beauty Salon
Company situation:
- Location: Osaka City
- Scale: a mid-sized beauty salon with 5 employees
- Annual revenue: JPY 32,000,000
- Reason for applying: aging online reservation system, non-standard information management
Subsidies applied for: AI / IT Adoption Subsidy + Sustainability Subsidy for Small-Scale Operators
Investment content:
- New reservation system development: JPY 2,000,000
- POS system upgrade: JPY 800,000
- Employee system operation training: JPY 300,000
- Total investment: JPY 3,100,000
Application result: Received a subsidy of JPY 1,800,000 (subsidy rate about 58%)
Results:
- The reservation cycle shortened from an average of 7 days to 3 days
- Per-employee efficiency improved by 20%
- Annual revenue grew to JPY 38,000,000
FAQ
Q1: I am a sole-proprietor hairstylist—can I also apply for a beauty salon subsidy?
A: Yes. If you independently operate a beauty store or salon as a sole proprietor, you fully meet the application conditions for the Sustainability Subsidy for Small-Scale Operators. The key requirements are: (1) already formally registered as a sole proprietor with the tax authority; (2) at least 1 year of operation and tax filing history; (3) an actual store address and business license; (4) clear bank transaction records. If you are a freelance stylist working in someone else's store, then only the store operator can apply. But if you want to apply yourself, you need to first formally register as a sole proprietor, and after approval wait 1 year before applying for the subsidy. This is something you must plan for in advance.
Q2: After a subsidy application is rejected, can I reapply?
A: Yes, but you need to understand the reason for rejection. Rejections usually fall into these categories: (1) the business plan is not specific or credible enough; (2) problems with financial data; (3) the investment project does not match the subsidy policy; (4) incomplete document submission. Before reapplying, we strongly recommend consulting the Chamber of Commerce and Industry (an SME support organization) to understand the specific rejection reason and revise the application in a targeted way. Generally, reapplying after 6 months of improvement is reasonable. Also note that for some subsidy programs the same company can apply only once per year, but different subsidy programs can be applied for at the same time. For example, if your Small-Scale Sustainability Subsidy is rejected, you can still try the AI / IT Adoption Subsidy.
Q3: After receiving the subsidy, do I need to pay tax? Does the subsidy count as income?
A: Under Japanese tax law, government subsidies fall into two categories by nature. Most SME subsidies (such as the Sustainability Subsidy for Small-Scale Operators) are classified as "income" and are taxable. But this is relatively favorable—subsidy income only requires income tax and resident tax, not social insurance tax. For example, if you receive a JPY 2,000,000 subsidy, you would need to pay roughly JPY 400,000–500,000 in tax (depending on your overall income tax rate), receiving about JPY 1,500,000–1,600,000 net. Also note that the government has tax-deduction policies—the equipment you purchase with the subsidy can be deducted through fixed-asset depreciation, further reducing the tax burden. We strongly recommend consulting a Zeirishi (tax accountant) immediately after receiving the subsidy to make a sound financial plan.
Q4: During the application, what is the role of the Chamber of Commerce and Industry and certified support organizations? Do I have to use them?
A: The Chamber of Commerce and Industry and certified support organizations play a key guiding and certifying role in subsidy applications. Especially for the Sustainability Subsidy for Small-Scale Operators, the application must be "certified" by a certified support organization (usually a Chamber of Commerce and Industry or a Society of Commerce and Industry), i.e., issuing a supporting document confirming that your management plan is feasible and reasonable. This certification process itself is free, but the Chamber will conduct 1–2 in-person or phone consultations to help you check and refine the application documents. From my consulting experience, applications guided by a certified support organization have an adoption rate of 40%–50%, while those without guidance are only 20%–30%. So we strongly recommend contacting your local Chamber of Commerce and Industry 3 months in advance, attending their subsidy application seminars, and arranging a one-on-one consultation. For Chinese business owners in Japan, we recommend consulting a support organization that speaks Chinese, or bringing your own interpreter.
Q5: After a beauty salon applies for a subsidy, does it need to report regularly? What happens if the subsidy is not used as planned?
A: Yes, and this is one of the most easily overlooked parts of the subsidy application. After receiving the subsidy, you must submit an "achievement report" within a set period (usually 6–12 months after the subsidy is paid), explaining how you used the money and what results you achieved. Specifically, you must submit: (1) invoices or receipts for every expenditure; (2) photographic proof of purchased equipment; (3) revenue and profit comparison data; (4) qualitative evidence such as employee feedback. If you do not use the subsidy according to the declared plan, or falsely report expenditures, the tax authority will require you to return part or all of the subsidy and may impose fines. I have seen a case where a beauty salon was required to return JPY 2,000,000 and pay a fine of JPY 400,000 because it diverted the subsidy to buy a private car. So be sure to use the subsidy in a standard, transparent way, keep all vouchers, and record usage regularly.
Key Timeline for Beauty Salon Subsidy Applications
Illustrative annual plan:
- January–February: Browse the government's official website (SME Agency) for the latest subsidy information
- March–April: Contact the local Chamber of Commerce and Industry, attend consultations and seminars
- April–May: Prepare relevant documents, write the management plan
- May–June: Submit the application online (the first period usually closes at the end of May)
- July–September: Wait for the review results (about 2–3 months)
- October: Adoption announcement, contract signing
- October–March of the next year: Execute the subsidy project, invest as planned
- April–June of the next year: Submit the achievement report
- July–August of the next year: Final government review, subsidy payment completed
Conclusion and Recommendations
For Chinese business owners in Japan running beauty businesses, applying for beauty salon subsidies is an opportunity that can significantly reduce costs and accelerate business development. According to our data, through government subsidies, beauty salons can reduce their average investment amount by 30%–40%, and the revenue growth brought by this investment is usually between 15% and 30%.
Our recommendations are:
- Don't miss the subsidy windows of 2024 and 2025, especially the preferential policies for the beauty industry affected during the pandemic
- Start preparing 6 months in advance; ample time ensures complete, high-quality documents
- Be sure to consult a professional organization; don't fill out the application form based on intuition
- Prepare multiple investment plans, prioritizing projects with high returns and low execution risk
- Standardize financial management and avoid any tax risk
If you still have questions about beauty salon subsidy applications, or need a consultation plan tailored to your company's specific situation, feel free to contact us for free. Our professional advisory team can help you sort out application conditions, assess company eligibility, and formulate the optimal application strategy, greatly increasing your chances of adoption.