Which Subsidies Can Chinese-Run IT & Software Companies in Japan Obtain?

The Basics of IT Company Subsidies

Three Key Features of Japan's IT Company Subsidies

First, one point must be clear: Japan's IT company subsidies are not loans, and do not need to be repaid. This is "hard cash" support the government provides to advance the development of the digital economy.

First, broad coverage. Whether you do SaaS services, software development, AI applications, cloud computing, or cybersecurity, there is a corresponding subsidy program. According to statistics from Japan's Ministry of Economy, Trade and Industry (METI), the total amount of subsidies for the IT and DX (digital transformation) field in 2023 exceeded 150 billion JPY, more than triple the level of 2020.

Second, clearly tiered amounts. Subsidies range from a few hundred thousand yen to tens of millions of yen, and companies can choose a matching program based on their own project scale. Generally, the subsidy a small or medium-sized IT company can obtain is typically between 1 million and 5 million JPY.

Third, a relatively reasonable application threshold. Compared with traditional financing, subsidy applications place more weight on a project's innovativeness and feasibility than on the company's years in operation or collateral. This is very friendly to newly founded Chinese-run IT companies.

A Detailed Look at Mainstream IT Company Subsidy Programs

AI・IT Adoption Subsidy (SME IT Adoption Support Project / IT導入補助金)

This is the easiest IT company subsidy to apply for, and one of the programs Chinese-owned companies most often get approved for.

Subsidy amount: 500,000–4.5 million JPY/year

Who can apply: SMEs with 2,000 or fewer employees (software and IT-service companies usually qualify)

What it covers:

• Adoption of business software such as accounting software, HR management systems, and customer relationship management (CRM) systems
• Cloud service fees (annual fees)
• Related consulting and implementation guidance fees

Typical case: A 20-person Chinese-run software development company applied for the AI・IT Adoption Subsidy to introduce a project management system (JIRA), a financial management system (freee), and an HR system. The subsidy of 1.5 million JPY covered two years of system usage fees and the initial setup costs.

Application procedure:

1. Prepare the designated software list for the AI・IT Adoption Subsidy
2. Submit application documents (there are usually application windows in April and September)
3. Review period of 3–4 months
4. Execute the project after approval and claim reimbursement

Point to note: You must procure software designated in Japan's AI・IT Adoption Subsidy accreditation catalog. Self-developed systems and overseas software (not registered in Japan) generally do not qualify.

Monozukuri Subsidy (Manufacturing Innovation Subsidy / ものづくり補助金)

Although its name says "manufacturing," this program is equally applicable to IT companies developing industrial software, IoT solutions, and automation systems.

Subsidy amount: 7.5 million–30 million JPY

Subsidy rate: 1/2 for SMEs, 2/3 for small-scale enterprises

Who can apply: Companies developing new products, new services, or new processes; a track record of productivity-improvement initiatives within the 3 years prior to application is required

Typical scenarios:

• A Chinese company's Industry 4.0 management platform was approved for a 15 million JPY subsidy
• An automated inspection system R&D project received 10 million JPY in support
• The development of a supply chain management SaaS received a 7.5 million JPY subsidy

Core parts of the application materials:

• A new product/service development plan
• Productivity-improvement target data (cost reduction ratios, processing efficiency gains, etc.)
• An explanation of technical difficulty
• A fund-usage plan

Review cycle: 4–5 months, with relatively intense competition (adoption rate is usually 30–40%); a high-quality proposal is essential.

Information Processing Promotion Subsidy (情報処理促進費補助金)

This program is fairly targeted, supporting companies in introducing and self-developing information systems.

Subsidy amount: Typically in the range of 1 million–5 million JPY

Applicable scope:

• Digital transformation (DX) of business processes
• R&D of self-developed systems
• System security upgrades
• Modernization of legacy systems

Application scenario for a Chinese-owned company: An IT company building a cross-border e-commerce management system applied for this subsidy to develop multilingual support and internationalization of its payment system, and received 3 million JPY in support.

Cross-ministerial Strategic Innovation Promotion Program (戦略的イノベーション創造プログラム)

This is a subsidy for highly innovative projects, suited to companies with cutting-edge technology.

Subsidy amount: 50 million JPY to over 100 million JPY

Technology directions:

• Artificial intelligence and machine learning applications
• Quantum computing
• Cybersecurity technology
• Bioinformatics
• Distributed technologies such as blockchain

Application difficulty: Relatively high; you need to demonstrate genuine innovativeness and commercialization prospects. But if you succeed, the funding support is very substantial.

Case: A Chinese-owned AI company developing a Chinese-language natural language processing model received 70 million JPY in support for model training and productization.

Business Continuity Capability Strengthening Training Support Project (事業継続力強化訓練支援事業)

A new program added in 2023, targeting companies' BCP (Business Continuity Planning) and risk-response capabilities.

Subsidy amount: 500,000–2 million JPY

Who it targets: Personnel training, system backup upgrades, disaster-recovery system construction, and the like undertaken to strengthen a company's risk resilience

Applicable scenarios:

• Building remote-work systems and training employees
• Constructing data backup and recovery systems
• Cybersecurity personnel training
• Supply chain resilience assessment and improvement

Local Municipality Subsidy Opportunities

Tokyo's IT Company Subsidy Ecosystem

The Tokyo Metropolitan Government provides the strongest support for IT and startup companies in all of Japan.

Main programs:

• Tokyo SME Monozukuri & Hospitality Subsidy Project (東京都中小企業ものづくり・もてなし補助事業): Subsidies of 1 million–10 million JPY, aimed at strengthening the competitiveness of software development companies
• DX Promotion Subsidy (DX推進補助金): Subsidizes SMEs' digital transformation projects, in amounts of 1.5 million–3 million JPY
• Startup Support Financing (創業支援融資): Combined with subsidies, low-interest financing of up to 5 million JPY

Feature: Tokyo has 3–4 application cycles each year, with a relatively high approval rate (40–50%).

IT Subsidies in Regional Hubs Such as Osaka and Fukuoka

Osaka Prefecture:

• Subsidies from the Kansai Innovation International Strategic Special Zone (関西イノベーション国際戦略特区), aimed at R&D by AI and IoT companies, in amounts of 5 million–20 million JPY
• Digitalization support for small-scale enterprises (小規模企業向けのデジタル化支援), with subsidies up to 1 million JPY

Fukuoka Prefecture:

• Asia Business Incubator Project (アジア・ビジネス・インキュベーター事業), aimed at cross-border, internationalized IT companies, with a subsidy cap of 10 million JPY
• Fukuoka Startup Support Subsidy (福岡スタートアップ支援補助金), providing startups with 500,000–1.5 million JPY

Special note: If a Chinese-run IT company chooses to open an R&D base or branch in these regional hubs, it can usually obtain additional local subsidy support, with cumulative subsidy amounts potentially reaching 150–200% of the national-level subsidy.

How to Efficiently Apply for IT Company Subsidies

Preparation Before Applying

Step 1: Confirm the company meets the conditions

• Confirm whether the company's employee count and capital meet the definition of an "SME"
• Check that it is not a non-profit organization, political group, or other ineligible entity
• Confirm there are no tax violations or other administrative penalty records

Step 2: Choose a matching program Do not blindly apply for every program; instead, base your choice on:

• The company's current specific needs (introducing a system, developing a new product, improving security, etc.)
• The project's start timing (some programs require upfront investment before reimbursement)
• The company's financial situation (some programs require the company to self-fund a certain proportion)

Step 3: Gather the necessary materials

• Company register, tax returns (past 3 years)
• Financial statements and bank account information
• Director register, shareholder register
• A business plan or project plan

Writing a High-Approval-Rate Application Proposal

This is the most critical stage. The review committee's experts will evaluate the project's innovativeness, feasibility, and economic benefits based on your proposal.

5 essential elements of the proposal:

1. Current situation analysis and problem definition (15% weight)

   • Clearly state the specific problem the company currently faces
   • Let the data speak: e.g., "It currently takes 3 days for our system to process an order, which affects delivery times and has raised the customer churn rate by 5%"

2. Solution design (25% weight)

   • Specify what system, technology, or method will be adopted
   • Why this solution was chosen (comparison with other options)
   • Qualifications of the vendor or partner organizations

3. Economic benefit projection (30% weight)

   • Cost reduction after investment (specific figures)
   • Quantified metrics for productivity improvement
   • ROI (return on investment) calculation
   • You usually need to prove that the investment cost will be recovered within 3 years

4. Implementation plan and timeline (20% weight)

   • Monthly implementation steps
   • Milestones and acceptance criteria
   • Risk assessment and countermeasures

5. Social contribution and ripple effects (10% weight)

   • Whether new jobs are created
   • Whether it provides reference value for the industry
   • Whether it promotes local economic development

A case to learn from: One Chinese-owned company's subsidy application proposal used clear data to show that after introducing an ERP system, order processing time was shortened from 3 days to half a day, inventory turnover improved by 40%, and annual costs were reduced by 10 million JPY. It ultimately obtained a 3.5 million JPY subsidy.

Application Cycles and Time Planning

Application windows vary greatly by program:

• AI・IT Adoption Subsidy: April and September; you need to start preparing 1.5 months in advance
• Monozukuri Subsidy: Applications usually in January, May, and September; you need to start 2 months in advance
• Strategic Innovation: Irregular; requires ongoing attention to public announcements
• Local subsidies: Timing varies by region; we recommend contacting the local Chamber of Commerce and Industry or industrial promotion agency directly

Time-planning suggestions:

• Month 1: Project research, solution design, vendor selection
• Month 2: Proposal writing, internal review
• Week 3 (of the next stage): Final submission
• Following 3–4 months: Review period
• 6–12 months after approval: Project execution and expense reimbursement

Frequently Asked Questions (FAQ)

Q1: If a Chinese founder's Japanese isn't good enough, can they still apply for an IT company subsidy?

A: You can absolutely apply. The Japanese government places no restrictions on an applicant's nationality or native-language background; as long as the company is a corporation formally registered in Japan, it is eligible to apply. But note that application documents, proposals, financial statements, and the like must all be submitted in Japanese—this is a hard requirement. In practice, you have three options: First, hire Japanese employees or a Japanese director to participate in the application work. Second, commission a professional subsidy application agency (fees are usually 5–10% of the subsidy amount). Third, before applying, attend a free subsidy seminar provided by the Chamber of Commerce and Industry or an SME Support Center to systematically learn the application process. We recommend that if a Chinese business owner's Japanese is at N2 or above, they can try applying on their own with the help of professional translation software; if Japanese ability is limited, we recommend investing in a professional agency, because a high-quality proposal can often raise the approval rate by 30–50%, making the return on investment very high.

Q2: Can a company that has already received a subsidy once apply again?

A: Yes. Japan's subsidy policies clearly allow companies to apply multiple times for different programs, and even to apply for the same program in the following fiscal year. But there are three important restrictions to understand: First, within the same fiscal year, you can usually only apply once for the same program, but you can apply for multiple different programs at the same time. Second, some programs explicitly stipulate an interval between applications—for example, the AI・IT Adoption Subsidy requires at least a 2-year gap between two applications. Third, if the subsidy project from your previous application has not yet been completed, you usually cannot apply for a similar new project. In practice, a common success story we see is a company applying for the AI・IT Adoption Subsidy in year one to introduce basic management systems, the Monozukuri Subsidy in year two to develop a new product, and a local subsidy in year three to expand production. Such stacked applications not only comply with the rules but also demonstrate the company's ongoing capacity for innovation, which is welcomed by review committees. We recommend leaving an interval of at least 6 months between applications.

Q3: Is a subsidy money-first or spend-first-then-reimburse? Can it be used for employee salaries, rent, and other daily expenses?

A: Most subsidies use a "invest first, reimburse later" model—they do not give you the money upfront. The specific process is: the company first self-funds the purchase of software, procurement of equipment, or payment of consulting fees, then after the project is completed submits invoices, contracts, acceptance reports, and other supporting documents, and only receives the subsidy after review approval. The entire reimbursement cycle usually takes 6–12 months. So applicant companies must have sufficient self-funding capacity. As for daily expenses, Japan's subsidy policies are strict: employee salaries, office rent, utility bills, and other daily operating costs are usually not included in the subsidy scope. Subsidies must be used for dedicated investments, such as purchasing new systems, developing new products, training employees, or transforming production processes—projects with a clear "investment" character. However, there is one important exception, namely labor costs: if you temporarily hire employees specifically dedicated to completing the subsidy project, that portion of wages can be included in the subsidy scope. We recommend confirming with an accredited advisory organization before applying whether your specific expenditure items meet the requirements.

Q4: My subsidy application was rejected. Can I reapply? How soon can I apply again?

A: A rejection is not permanent—you can absolutely reapply. But you should analyze the reason for rejection. From experience, common reasons for rejection include: insufficient economic-benefit projection in the proposal (the most common, accounting for 40% of rejection reasons), insufficient project innovativeness, an implementation plan that is not detailed enough, and poor company finances. We recommend the following steps: First, many programs briefly explain the reason in the rejection notice—read it carefully. Second, you can contact the person in charge at the application window (some programs allow such communication) to ask about the direction for improvement. Third, have an application agency or consultant help you re-examine the proposal; the second application usually requires substantive improvements, such as recalculating economic benefits, adding market research data, and optimizing the technical solution. In terms of timing, if the same program still has an application window that year, you can reapply immediately; if not, you must wait until the next fiscal year. However, many companies choose the strategy of applying for Program A in year one and switching approach to apply for Program B in year two, thus avoiding overlap with the review committee's "historical record," which actually yields a higher approval rate. Statistically, companies that reapply after an initial rejection have a second-time success rate of about 50–60%.

Q5: After an IT company receives a subsidy, must it report financial data, profit growth, and other information to the government? What are the follow-up obligations?

A: Yes. This is an important responsibility to understand when applying for a subsidy. To supervise and evaluate the effectiveness of subsidy use, the Japanese government conducts follow-up tracking of approved companies, usually for 3–5 years. Specific obligations include: First, submitting detailed income-and-expenditure reports, including the invoice, contract, and supporting documents for every expenditure, which government officials will review. Second, reporting on project completion, submitting a project summary report describing the goals achieved, problems encountered, and final results. Third, some programs require companies to submit periodic business-data reports, including key metrics such as sales, profit, and employee count, to verify whether the economic benefits promised at the outset were realized. Fourth, if false reporting, misappropriation, or other violations are found, the company must refund the full amount and may even face penalties and legal action. Another point to note is that if certain companies undergo a merger or acquisition or experience a major change in shareholding within a certain period after receiving the subsidy, they must report to and obtain the consent of the subsidy administration agency. These follow-up obligations may seem cumbersome, but they actually serve to establish a transparent and fair subsidy system. We recommend that companies receiving subsidies maintain complete accounts and document management from the project's launch stage, rather than scrambling to prepare when it is time to report. Some companies also hire a dedicated accountant or auditor to manage these documents—a relatively small investment with a large payoff.

Self-Diagnosis Checklist Before Applying

Before deciding to apply, please self-check the following points:

• [ ] The company is formally registered in Japan and holds a valid corporate registration
• [ ] The financial statements for the past 3 years are complete and compliant with tax law
• [ ] The company's employee count and capital meet the definition of an "SME" (employee count usually 2,000 or fewer)
• [ ] There is a clear, quantifiable project need and objective
• [ ] The project's economic benefits can be proven with specific data (cost reduction, efficiency improvement, sales growth, etc.)
• [ ] The company is able to pay 10–50% of the total project cost (depending on the subsidy rate)
• [ ] The company has employees with relatively strong Japanese ability, or can commission an agency to apply
• [ ] The project implementation period can be completed within the time required by the subsidy (usually 6–18 months)

Summary of Professional Advice

For Chinese-run IT and software companies in Japan, our advice is:

First, scan subsidy information regularly. We recommend checking the following official channels at least once a month: the website of Japan's Small and Medium Enterprise Agency, local industrial promotion agencies, and the subsidy information of the Chamber of Commerce and Industry. Many companies miss opportunities simply because they do not know such programs exist.

Second, choose programs according to your company's development stage. In the startup phase, choose the AI・IT Adoption Subsidy (low threshold, easy to approve); in the growth phase, choose the Monozukuri Subsidy (large amount, drives innovation); in the maturity phase, you can apply for strategic innovation programs (supporting breakthroughs in core competitiveness).

Third, invest in a high-quality proposal. This has the highest return on investment. A professional proposal can raise your approval rate from 20% to over 60%.

Fourth, make full use of local subsidies. Many Chinese-owned companies focus only on national-level subsidies and overlook local ones. In fact, stacking a national subsidy with a local subsidy can often double the subsidy amount.

Next Steps

If your IT or software company is facing investment needs such as system upgrades, product R&D, or team expansion, consider first doing a free subsidy feasibility assessment. Based on your company's actual situation, we can help you:

• Diagnose your company's subsidy application eligibility
• Recommend the 2–3 best-matched programs
• Provide a preliminary proposal framework and funding budget
• Answer specific questions during the application process

Contact us now for a free consultation—our subsidy advisory team has over 10 years of experience with subsidy applications for IT companies in Japan and has helped 200+ Chinese-owned companies successfully obtain subsidies, cumulatively assisting companies in securing over 1 billion JPY in funding. Don't let subsidies slip away—turn the government's support policies into real momentum for your company's growth.