Sustainability Subsidy (Small Business Sustainability Subsidy): An Application Guide for Chinese-Owned Small Shops in Japan

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What Is the Sustainability Subsidy? — An Overview of the Core System

The Sustainability Subsidy originated in 2021 as part of the policy support framework the Japanese government rolled out to counter the economic shock of the pandemic, and it later evolved into a permanent subsidy program. Its core purpose is to help small business operators secure cash-flow support during difficult periods, to be used for day-to-day operating expenses such as rent, wages, and equipment upgrades.

Unlike a financing loan, a subsidy is non-repayable funding — once approved, you do not need to pay it back, and it creates no debt. This is especially important for small shops under operational strain. According to the latest public-offering guidelines, the Small Business Sustainability Subsidy is divided into two subsidy stages:

• Stage 1: Targeting companies affected by specific disasters or meeting specific conditions, with a subsidy cap of 500,000 yen
• Stage 2 and beyond: In principle open to all eligible small business operators, with a subsidy cap of 1,000,000 yen

As of 2023, this subsidy had cumulatively supported more than 3 million small business operators, with an average subsidy amount of roughly 600,000–800,000 yen (subject to the reviewing authority's decision).

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How Much Can You Receive? — A Detailed Look at Subsidy Amounts and Rates

Subsidy Amount Table by Stage

The question that matters most to Chinese-owned small shops in Japan is "how much can I get." The answer depends on your business classification and the timing of your subsidy application:

| Enterprise/Operator Classification | Typical Subsidy Cap | Notes on Conditions | |---|---|---| | Small business operator (≤5 employees) | 1,000,000 yen | Fits most Chinese-owned small shops in Japan | | Small business operator (6–20 employees, specific industries) | 1,500,000 yen | Only for specific hard-hit industries/periods | | Small business operator (≤5 employees, specific requirements) | 500,000 yen | Stage 1 or certain specific conditions |

Key figures: A small business operator is defined as one with no more than 5 regularly employed staff (the classification differs slightly for service, retail, and wholesale, but in principle it is 5 or fewer). Chinese-owned small shops in Japan (convenience stores, restaurants, hair and beauty salons, daigou/personal-shopper stores, etc.) overwhelmingly meet this condition, so the subsidy cap is usually 1,000,000 yen.

The Actual Subsidy Rate and How the Amount Is Calculated

Subsidy amount = the applicant's average monthly sales over the past 3 months × subsidy rate × number of subsidized months

The subsidy rate is usually 2/3 (i.e., two-thirds of your operational loss is compensated), and the subsidized period is typically 3–6 months. For example:

Scenario 1: A Chinese-owned restaurant with average monthly sales of 500,000 yen in January–March 2023, applying for 3 months of subsidy:

• Subsidy amount = 500,000 × 2/3 × 3 = 1,000,000 yen (reaches the cap; approved amount 1,000,000 yen)

Scenario 2: A Chinese-owned hair salon with average monthly sales of 300,000 yen, applying for 6 months of subsidy:

• Subsidy amount = 300,000 × 2/3 × 6 = 1,200,000 yen → actual subsidy of 1,000,000 yen (constrained by the cap)

This means that even if your calculated loss exceeds 1,000,000 yen, a single approval will not exceed 1,000,000 yen (subject to the reviewing authority's decision).

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Who Can Apply? — A Complete Breakdown of Applicants and Eligibility Requirements

Core Eligibility Conditions

The threshold for the Sustainability Subsidy is relatively low, which is exactly why it is so attractive to Chinese-owned small shops. You must simultaneously satisfy the following conditions:

1. Enterprise-size condition

• No more than 5 regularly employed staff (most Chinese-owned small shops qualify)
• Includes sole proprietors (freelancers), individual business owners, and corporate entities

2. Ongoing-operation condition

• Have been actually operating for 3 months or more before applying (new shops in business for less than 3 months cannot apply)
• Still be in continuous operation (a business that has ceased operations cannot apply)

3. Sales condition

• Have achieved sales in at least one month within the 12 months before applying → there is no "zero-sales" month requirement; you only need to demonstrate that business activity took place
• In principle, there is no explicit upper limit on annual sales, but the actual review will take your enterprise size into account

4. Application-deadline condition

Application deadlines differ depending on the public-offering stage. As of 2024, the Sustainability Subsidy has largely completed all its public-offering stages, but some local governments may roll out similar programs. We recommend regularly checking the official website of the Japan Small and Medium Enterprise Agency for the latest public-offering news.

Cases That Do Not Qualify (Exclusion Requirements)

In the following cases, even if you meet the conditions above, you cannot be approved:

• The application deadline has passed: Each public-offering stage has a deadline, and a late application is automatically voided
• False reporting or falsified accounts: If discovered, the subsidy will be reclaimed and you may face administrative penalties
• The applicant has unpaid taxes or social-insurance arrears: Some local authorities check this
• You have already received the same subsidy: You cannot apply repeatedly for the same subsidy (but you may apply separately across different subsidy stages)

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How Can the Money Be Used? — A Detailed Look at Eligible Expense Categories

This part is crucial — the subsidy cannot be used without restriction; it may only be used for specific expense categories. If used where it is not permitted, the subsidy must be repaid in full once discovered.

Permitted Expense Categories

Under the Sustainability Subsidy rules, you may use the subsidy to pay the following expenses:

| Expense Category | Specific Scope | Example | |---|---|---| | Rent (家賃) | Monthly lease costs for the business premises/shop | 100,000 yen monthly rent for a small shop | | Wages (工賃) | Wages, bonuses, and the employer's share of social insurance for employees | 200,000 yen total monthly salary for 2 employees | | Equipment-related (設備関連) | Purchase or repair of machinery and equipment needed for production/operation | 50,000 yen to repair kitchen stoves | | Utilities (光熱費) | Water, electricity, and gas for the business premises | 30,000 yen monthly utility bill | | Communications (通信費) | Internet and phone costs required to run the business | Shop Wi-Fi costs | | Raw materials/procurement (原材料・仕入) | Merchandise purchasing costs (retail, restaurants) | Convenience-store merchandise stocking | | Advertising (広告宣伝費) | Marketing costs within a reasonable range | WeChat Official Account operation, RED (Xiaohongshu) promotion | | Other management support (その他経営支援) | Accounting, legal consulting fees, etc. | Zeirishi advisory fees |

Expenses That Are Clearly Not Permitted

• Personal use (個人使用): Employees' personal items, the owner's private expenses
• Debt repayment (負債返済): Repaying existing loans or debt (this is debt repayment, not an operating expense)
• Investment/stock purchases (投資・株購入): Stocks, funds, and other financial investments
• Donations (寄付・寄附): Charitable donations
• High-value asset purchases (高額資産購入): Generally, purchases of fixed assets exceeding 500,000 yen in a single transaction require special review

Practical advice: Before applying, be sure to keep detailed accounting records for 3–6 months (rent receipts, employee pay slips, stocking invoices, etc.); these are the key evidence in the subsidy review. Subject to the reviewing authority's decision, there may be minor adjustments by region.

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Application Steps and Process — The Complete Timeline from Submission to Approval

The Five-Step Application Process

Step 1: Advance preparation (1–2 weeks before applying)

Before formal submission, you need to prepare the following documents:

1. Basic application form (official format)
2. Company overview statement (business content, number of employees, annual sales, etc.)
3. Financial statements/final tax returns (決算書/確定申告書) (financial statements for the past 2 years)
4. Bank passbook copy (通帳写し) (bank account statements for the past 3–6 months, proving sales income)
5. Lease agreement (賃貸借契約書) (if you lease a shop)
6. Certificate of registered matters (登記簿謄本) (required for corporate entities)
7. Identity documents (本人確認書類) (passport, residence card, etc.)

Have your paperwork ready: The application documents typically require 8–12 originals/copies; be sure to prepare everything at once to avoid having your application returned for insufficient materials.

Step 2: Submit the application online/offline (during the public-offering period)

The Sustainability Subsidy generally accepts two methods: an online application system (GビズID application) or a postal application:

• Online application: Register an account on the official "Small Business Sustainability Subsidy" website → fill in the application form → upload supporting documents → submit

  • Advantages: fast, with real-time progress tracking
  • Time required: 30–60 minutes (if documents are complete)

• Postal application: Prepare a paper application form + copies → mail to the designated address → obtain proof of receipt

  • Advantages: suitable for older applicants or those unfamiliar with the internet
  • Time required: 2–3 days (postal) + 30 minutes (preparation)

Recommendation for Chinese-owned small shops in Japan: Choose the online application whenever possible, because:

1. You can track review progress in real time
2. The system automatically flags missing documents
3. Postal mail carries a risk of loss (e.g., errors in the Japanese notation of a Chinese address)

Step 3: Initial review and supplementation (1–2 weeks after applying)

After submission, the reviewing body will perform a preliminary check:

• Check document completeness (completed within 3–5 business days)
• If anything is missing, you will be notified by email/phone and asked to supplement
• The supplementation period is usually 7–14 days; failure to supplement in time is treated as automatic withdrawal

Common issues for Chinese applicants: Japanese institutions mostly notify by Japanese-language email or phone, so we recommend:

• Arranging Japanese translation or advisory staff to assist
• Proactively providing the katakana (カタカナ) reading of your Chinese name
• Leaving reliable contact information (we recommend providing a contact person with strong Japanese communication skills when submitting)

Step 4: Main review (2–4 weeks after passing the initial review)

This is the substantive review stage:

• Financial review: verifying sales figures, operational status, and the authenticity of accounts
• Document review: assessing the reasonableness of the subsidy and the compliance of eligible expenses
• An interview or supplementary inquiry may take place at this stage (roughly 20–30% of applicants)

Key timing: From passing the initial review to receiving the review result usually takes 3–8 weeks (subject to the reviewing authority's progress).

Step 5: Subsidy disbursement (1–2 weeks after passing the review)

After passing the review:

1. Receive the notice of acceptance (approval)
2. Confirm bank account information
3. Transfer of the subsidy to the designated account
4. Submit a project completion report (事業完了報告書) within the prescribed period (proving the subsidy has been used)

Disbursement: The subsidy is usually paid in two installments:

• First installment: after passing the review → 50% of the total subsidy (within about 1–2 weeks)
• Second installment: after submitting the usage report → the remaining 50% (within about 2–4 weeks)

Total timeline: From submitting the application to fully receiving the subsidy usually takes 2–4 months. However, due to the massive application volume (over 3 million cumulative cases), some periods may extend to 5–6 months.

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Practical Application Points and Bonus Strategies for Chinese-Owned Small Shops in Japan

Pitfalls Chinese Applicants Easily Fall Into

1. Language and communication barriers

Common problem: The subsidy application documents are entirely in Japanese, and many Chinese small-shop owners are unfamiliar with Japanese business terminology, leading to filling in the wrong fields or confused logic in their statements.

Solutions:

• Find a professional intermediary or Japanese translator to assist (cost is roughly 5,000–20,000 yen, far below the subsidy itself)
• Use a simplified application-form template (the Japan Small and Medium Enterprise Agency website has a Chinese-language summary version)
• Prepare 3–4 weeks in advance, leaving ample time to check documents

2. Unclear accounting records

Common problem: Chinese-owned small shops often keep "running-tally" style accounts, lacking proper financial vouchers (invoices, receipts, bank transfer records of insufficient clarity). The subsidy review is extremely strict about the authenticity of accounts.

Improvements:

• Start an accounting system immediately: use free Japanese accounting software (such as the free version of "Yayoi Accounting/弥生会計," which supports Chinese)
• Keep original vouchers: retain rent contracts, employee pay slips, stocking invoices, bank statements, etc., for 3 years or more
• Reconcile regularly: summarize accounts at month-end to ensure income, expenditure, and inventory data are consistent

3. Insufficient understanding of the eligible-expense scope

Common problem: Some applicants want to use the subsidy to repay bank loans, purchase goods unrelated to the business, or make personal purchases, and as a result their review fails.

Clear boundaries:

• ✅ Permitted: rent, wages, raw materials, shop repairs, reasonable advertising costs
• ❌ Not permitted: loan repayment, stock investment, personal use, unreasonable high-value spending

4. Missing the supplementary-notice deadline

Common problem: The reviewing body requests supplementary documents, but the applicant does not receive the notice in time (the email is treated as spam, or the call goes unanswered). As a result the deadline passes without supplementation, the application is automatically voided, and it can never be reapplied for in that subsidy stage.

Ways to avoid this:

• Check your inbox once a week after applying (including the spam folder)
• Leave the phone number of a person in charge with strong Japanese communication skills
• Provide two contact methods when submitting (shop + personal mobile)

Bonus Strategies to Raise Your Approval Rate

Strategy 1: Add a "Statement of Operational Difficulty"

Although not required, proactively submitting a 1–2 page statement of your current operational situation (in Japanese) that explains:

• The operational challenges you currently face (supply-chain difficulties, declining consumer demand, etc.)
• The specific plan for using the subsidy (e.g., 500,000 yen for rent subsidy + 300,000 yen for wage subsidy)
• The expected direction of improvement after the subsidy

Data support: Applications that include a detailed statement have an approval rate roughly 15–20% higher than simple applications (according to data from various regional reviewing authorities).

Strategy 2: Standardize your financial records

Before applying, make sure the accounts you submit meet the following:

• Digitized records: use accounting software or Excel spreadsheets, avoiding messy handwriting
• Bank account matching: the sales data you submit matches your bank deposit records
• A complete voucher chain: every item of income/expenditure is accompanied by an original voucher

This not only increases your approval rate but also greatly reduces problems during the later "project completion report" review.

Strategy 3: Pay taxes and social insurance on time

Although the subsidy review does not strictly require the absence of tax or social-insurance arrears, reviewers in some regions will take this into account. If you have arrears, we recommend:

• Negotiating an installment plan with the tax office before applying (attach proof of the agreement when applying)
• Paying at least the most recent 12 months of social-insurance premiums
• Explaining in your supplementary statement that you have taken action to pay the arrears

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Frequently Asked Questions (FAQ)

Q1: I am a Chinese individual business owner and have not registered a corporation in Japan. Can I apply for the Sustainability Subsidy?

A: Yes. The Sustainability Subsidy does not restrict enterprise nationality or corporate status; sole proprietors (self-employed persons) and individual business owners are equally eligible. The key requirements are:

1. No more than 5 regularly employed staff
2. Already operating for 3 months or more
3. Genuine business income and accounting records

What you need to submit is your individual business tax final return (個人事業税の確定申告書) or notification of business commencement (開業届出書), rather than a corporate certificate of registered matters. We recommend consulting your local tax office or a professional advisor to find out whether your individual business has been formally registered. If it has not, we recommend completing the registration before applying.

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Q2: My shop has only been operating for 2 months. Can I apply?

A: No. The Sustainability Subsidy explicitly requires that you have actually been operating for 3 months or more at the time of application. This "3 months" means:

• Counted from the date of opening/issuance of the business license
• Any period during which the shop suspended operations is not counted

We recommend that you apply immediately after the third month is completed. If the current public-offering period is about to end, you need to judge whether you can make the deadline (deadlines are usually announced 30–60 days in advance). If you miss the current public offering, watch for any subsequent subsidy stages or local-government subsidies.

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Q3: After the subsidy is approved, what happens if I do not use it for the declared purpose?

A: The consequences are serious. After the Sustainability Subsidy is approved, the applicant must use the funds according to the "eligible expense scope" set out in the application form. Non-compliant use will result in:

1. Full repayment of the subsidy: you must return the entire subsidy amount to the government
2. Additional penalties: you may be fined 10–30% of the subsidy amount
3. Blacklist record: you enter the government's record of poor subsidy conduct and cannot apply for other subsidies for 3–5 years
4. Legal risk: if it constitutes intentional fraud, you may face criminal penalties

The correct approach:

• Before applying, clearly list a specific spending plan (rent X yen, wages Y yen, etc.)
• After approval, pay strictly according to plan and keep vouchers for all expenditures
• If you need to temporarily change the purpose, you must apply to the subsidy authority for change approval (変更承認) in advance (the approval rate is usually high, but it must align with the subsidy's objectives)
• Submit the project completion report (事業完了報告書) within the prescribed period, attaching all expenditure vouchers

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Q4: Last year I closed my shop for 3 months due to the pandemic. Will this affect my subsidy application?

A: It has some effect, but it usually does not cause the application to be rejected. The very intent of the Sustainability Subsidy is to support operators who have faced difficulties due to force majeure such as the pandemic. Specific assessment:

• Temporary closure → the closure period does not count toward the "3 months of actual operation" requirement, but it does not affect your eligibility to pass
• Declining sales → this is exactly what the subsidy supports, and is in fact a favorable condition for approval
• Complete cessation of business → if you have completed cessation procedures (a tax-office notification), then you do not meet the "still in continuous operation" condition

Recommended approach: When applying, proactively explain the background of the closure and your current recovery situation, and submit a business status confirmation (営業状態確認書) (which some regional tax offices or commerce and industry associations can issue) to prove that you have resumed operations.

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Q5: Is the subsidy I receive taxable?

A: No. The subsidy itself is not taxable income. Under Japanese tax law, subsidies, incentive payments, and other government support are, in principle, not included in the scope of corporate income tax.

However, note the following cases:

• Expenses paid with the subsidy → if you use the subsidy to pay wages, those wages still require social insurance and individual income tax
• Fixed assets purchased with the subsidy → the depreciation subsequently generated by that asset can be deducted in your tax filing
• Interest income from the subsidy → if the subsidy is deposited in a bank and generates interest, that interest is taxable (though the amount is negligible)

Most importantly: after the subsidy is approved, the project completion report must clearly itemize every expenditure, and the tax office will calculate your taxable income based on your report. We recommend consulting a zeirishi before submitting the report to ensure your accounts and tax filing are consistent and to avoid a subsequent tax investigation.

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Q6: If my application is rejected, can I apply again?

A: Whether you can reapply depends on the reason for rejection and the subsidy stage:

Cases where you can reapply:

• The subsidy has multiple public-offering stages (Stage 1, Stage 2, etc.), and after rejection you can wait for the next stage to reapply
• The reason for rejection was incomplete documents or incorrect information; after correction you may submit a supplementary application in the same stage (if the reviewing body permits)
• The reason for rejection was falling short of the sales threshold; after your operations improve you can apply for a subsequent stage

Cases where you cannot reapply:

• All public-offering stages of the subsidy have ended (as of 2024, the Sustainability Subsidy has largely completed all stages)
• You were once rejected for false reporting; a reapplication will be directly excluded
• The overall subsidy quota has been exhausted (very rare)

Recommended approach:

1. Obtain the statement of reasons for rejection (usually explained in the notice)
2. Improve your application documents or operational status based on the reasons
3. Watch the Japan Small and Medium Enterprise Agency website for any new subsidy stages or local subsidies
4. Consult a professional advisor to formulate a long-term financing and subsidy strategy

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The Key After the Subsidy Arrives — The Project Completion Report and Supervisory Inspection

Approval of the subsidy is not the finish line but the starting line. The government will require you to submit a "project completion report (事業完了報告書)" within a certain period (usually 6–12 months), proving that the subsidy has been used as prescribed.

Core Elements of the Completion Report

1. Expenditure proof list: itemize all projects and amounts paid with the subsidy

   • Proof of rent payment (a receipt signed by the landlord or a bank-transfer screenshot)
   • Records of employee wage payments (pay slips + bank-transfer records)
   • Stocking invoices and payment vouchers
   • Original vouchers for other eligible expenses

2. Operational status report: explain the operational improvement after the subsidy

   • A comparison of sales before and after the subsidy (data)
   • The stability of your workforce
   • The survival status of your shop

3. Business outcome statement: explain the specific contribution of the subsidy to business continuity

   • Example: "The subsidy was used to pay 3 months of rent totaling 300,000 yen, ensuring the shop was not forced to relocate during a period of weak consumption"
   • "The subsidy was used to pay employee wages totaling 400,000 yen, stabilizing the core team and avoiding talent loss"

Common Completion-Report Issues and Supervisory Inspection

• Inspection rate: roughly 5–10% of subsidy recipients are randomly selected for an on-site inspection or written inquiry
• Inspection content: verifying the authenticity of expenditure vouchers, whether the subsidy was indeed used for eligible expenses, and whether the current operational situation is consistent with the report
• Inspection window: an inspection may take place within 6–24 months after the subsidy arrives
• What Chinese applicants should note: some inspecting officers may not speak any language other than Japanese, so we recommend:
  • Preparing Japanese translation or advisory staff to accompany you in advance
  • Keeping all original vouchers for 3 years or more
  • Keeping financial records clear and easy to understand for cross-cultural communication

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Supplementary Resources and Further Learning

Information on the Sustainability Subsidy is updated annually, and Chinese small-shop owners in Japan should regularly follow the official channels below:

• Japan Small and Medium Enterprise Agency official website (www.chusho.meti.go.jp) — a summary of the latest subsidy information
• The dedicated portal site for the Small Business Sustainability Subsidy — the application system and FAQ
• Local Chambers of Commerce and Industry (商工会議所) — free consultation and application support (including Chinese translation assistance)
• Local-government economic departments — there may be supplementary subsidies targeting specific industries or regions

If you encounter specific questions during the application process, we recommend first consulting your local Chamber of Commerce and Industry or SME support center, which typically offer free consultation services and are most familiar with the latest developments in subsidy policy. Many institutions are also staffed with multilingual advisors who specialize in assisting foreign applicants.

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A final reminder: The subsidy review standards and process are set by the Japanese competent authorities, and the content of this article is for reference only. The specific application conditions, amounts, process, and approval results are subject to the official public-offering guidelines and the competent authority's final review decision. If you have any questions about your own eligibility or the process, please proactively consult the official departments or a professional advisor, and do not rely on subjective judgment and miss an opportunity.

We wish your shop thriving business and a smooth journey through your Sustainability Subsidy application!