A Subsidy Application Guide for Chinese-Owned Travel Agencies and Tourism Businesses in Japan

An Overview of the Tourism Subsidy System

The Main Sources of Tourism Subsidies in Japan

In Japan, tourism subsidies come mainly from three tiers: national (Cabinet Office, Ministry of Land, Infrastructure, Transport and Tourism), prefectural, and municipal (city/ward/town/village).

National subsidies are administered directly by the Japanese government. The subsidy amounts are usually larger, but the competition is also the fiercest. For example, the Japan Tourism Agency, which falls under the Ministry of Land, Infrastructure, Transport and Tourism, launches a Tourism Region Support Subsidy every year that can reach several tens of millions of yen. This type of subsidy is usually aimed at projects with a certain scale and level of innovation.

Prefectural subsidies are most abundant in major tourist destinations such as Tokyo, Osaka, and Kyoto. Take Tokyo as an example: it invests about 5 billion yen each year in tourism-related subsidies. These subsidies have relatively low thresholds, though the level of competition is second only to national ones.

Municipal subsidies are the closest to the grassroots and have the lowest thresholds. For example, tourist hotspots such as Taito Ward and Shinjuku Ward launch support subsidies for small and medium-sized tourism businesses every year, ranging from several hundred thousand to several million yen. Chinese travel agencies find it easiest to obtain support from this tier.

The Difference Between Tourism Grants and Subsidies

Many applicants confuse "subsidies" and "grants." Strictly speaking, grants are mainly used for employment and labor policies, while subsidies have a broader scope, including equipment investment, project innovation, and internationalization initiatives.

For example, if you plan to hire employees and provide them with training, you can apply for the Employment Adjustment Grant; if you want to purchase a multilingual guide system or upgrade office equipment, you should apply for a tourism-promotion subsidy. The two differ markedly in application process, conditions, and permitted uses of the funds.

The Main Subsidy Categories Chinese Travel Agencies Can Apply For

Internationalization and Regional Revitalization Subsidies

To attract more overseas visitors, the Japanese government has specifically launched subsidy programs aimed at "promoting visits to Japan." The core of these subsidies is to encourage travel agencies to develop distinctive tour routes and to drive local economic activity.

Application case: A certain Chinese travel agency planned to develop a "Japan–China premium study-tour route," involving exchange and cooperation programs with five Japanese universities. The agency applied to the Cabinet Office for the Regional Revitalization Promotion Grant and ultimately obtained 8 million yen in funding support. This money was used to produce bilingual promotional materials, organize a trial-operation team, and build a reservation system.

Similar subsidy programs include:

• Grant for Improving the Reception Environment for Visitors to Japan
• JNTO (Japan National Tourism Organization) Promotion Project Subsidy
• Regional Revitalization Promotion Grant (tourism portion)

Digitalization and Online Platform Subsidies

With the recovery of tourism after the pandemic, the Japanese government is strongly supporting the digital transformation of the tourism industry. These subsidies are mainly used to develop reservation systems, multilingual websites, online guide services, and the like.

Subsidy scale: This type of subsidy usually ranges from 2 million to 15 million yen. Applicants need to prove that the digital investment can directly improve service quality or customer experience.

Specific programs include:

• Tourism DX Subsidy
• SME Digitalization Infrastructure Support Subsidy
• The IT-infrastructure portion of the Tourism Region Support Subsidy

Equipment Investment and Repair Subsidies

Many tourism businesses make large investments in office equipment, vehicles, and guide equipment. The good news is that this portion of investment may also qualify for subsidy support.

Common programs:

• Purchase of multilingual simultaneous-interpretation equipment: subsidy rate 50–67%, up to 5 million yen
• Improving tour buses or chartered-vehicle fleets: subsidy rate 1/2–2/3, up to 10 million yen
• Building a visitor reception center or renovating office premises: subsidy rate 1/3–1/2, up to 20 million yen

For example, a certain Chinese travel agency invested 3 million yen to purchase 20 sets of Chinese–Japanese simultaneous-interpretation equipment and applied for an SME equipment-investment subsidy, ultimately being approved for 1.5 million yen (a 50% subsidy rate), effectively lowering the investment cost.

The Specific Process for Applying for a Travel Agency Subsidy

Step 1: Confirm Your Eligibility

Basic conditions include:

1. Having completed corporate registration in Japan (gōdō gaisha, kabushiki gaisha, NPO corporation, etc.)
2. Having all travel-business licenses in order (Certified Travel Services Manager qualification certificate, travel insurance)
3. Having paid taxes and social insurance normally for at least 2 years
4. Having no major legal violations or administrative penalties

Key review points: Applicants need to prove that their business is in a normal operating state. This means that tax filings, accounting statements, and bank transaction records for the past two years must be complete. If your business has been established for less than two years, you may not be able to apply for most national subsidies, but you can still try municipal ones.

Step 2: Project Planning and Budget Preparation

This is the most critical part of the entire application process. The application must clearly state:

Project objectives (quantified):

• Expected increase in visitors to Japan: from 5,000 to 8,000 per year (a 60% increase)
• Expected increase in revenue: from 20 million yen to 32 million yen per year
• Job creation: 3–5 new positions

Implementation details (made concrete):

• Don't vaguely say "improve services"—say "develop 3 new premium cultural-experience routes, including a tea-ceremony experience, traditional-craft making, and visits to ancient temples, each route staffed with Chinese–Japanese bilingual guides"
• Don't say "enhance online promotion"—say "produce a trilingual website in English, Chinese, and Japanese, optimize SEO, and run ads on Chinese platforms such as Weibo, Xiaohongshu, and Douyin, with the budget allocation accounting for 25% of the total budget"

Budget breakdown: You must list specific amounts. For example:

• Multilingual guide training: 800,000 yen
• Website production and maintenance: 1.2 million yen
• Printing of promotional materials: 400,000 yen
• Vehicle refitting: 5 million yen
• Management fee (Japan usually allows 5–10%): 500,000 yen
• Total: 7.9 million yen

When applying for a subsidy amount, applicants need to be reasonable; the subsidy rate is usually 50%–2/3. For a 7.9-million-yen project, the subsidy amount should fall between 3.95 million and 5.27 million yen.

Step 3: Choose the Right Subsidy Program and Application Channel

National applications: Materials must be submitted to the Cabinet Office's Regional Revitalization Promotion Secretariat or the Japan Tourism Agency. There are usually fixed application periods each year (March–May, September–October).

Prefectural applications: Consult the tourism division (Kankōka) or the Bureau of Industrial and Labor Affairs of the prefecture where your business is registered. Tokyo's application period is usually in March–April.

Municipal applications: Apply to the Industrial Promotion Division (Sangyō Shinkōka) or an equivalent department in your ward. The process is usually the simplest and the review cycle the shortest (1–3 months).

Step 4: Prepare the Application Materials

Required documents:

1. Application form (each subsidy program has a standard format)
2. Certified copy of the corporate registration
3. Articles of incorporation or statement of purpose of establishment
4. Financial statements for the past 2 years (income statement, balance sheet)
5. Copies of tax returns for the past 2 years
6. Travel-business registration certificate or license
7. Project plan (5–10 A4 pages, including the objectives, implementation details, budget, etc. described above)
8. Representative's résumé or company profile

Supplementary materials (depending on the program):

• Lease agreement or ownership certificate for the premises used
• Consent letter from partner companies (if a joint application is involved)
• Market-research data or competitive analysis
• A concrete presentation of the promotion plan

Step 5: Submit and Follow Up

Submission methods:

• Most national and prefectural subsidies use an online application system (such as the e-Gov system)
• Municipal ones usually accept in-person or mailed submissions
• We recommend keeping all evidence of submission (screenshots, receipts, mailing records)

Review cycle:

• National: usually 3–6 months
• Prefectural: usually 1–3 months
• Municipal: usually 1–2 months

During the review: You may receive requests for supplementary explanations or an on-site investigation, so be sure to respond promptly. Some programs invite applicants to give a defense or presentation.

Frequently Asked Questions (FAQ)

Q1: My travel agency has been established for less than 2 years. Am I completely unable to apply for subsidies?

A: Not completely. Although most national and prefectural subsidies require a business to have been established for at least 2 years, you still have the following options:

• Apply for municipal subsidies: Many ward-level subsidies have more lenient requirements on years of establishment, some requiring only 6 months or more. For example, Taito Ward's start-up support subsidy is open to businesses established for 1 year or more.
• Apply as a partner company: If you partner with a travel agency or tourism business that has been established for 2 years or more, you can participate as a joint applicant, with the lead applicant bearing legal responsibility while your company receives funding support.
• Convert to an NPO corporation: Some subsidy programs are specifically aimed at NPO corporations, and their application conditions are sometimes more flexible.
• Prepare a long-term plan: Even if you can't apply now, we recommend starting now to prepare complete tax filings and accounting records, in preparation for applying two years from now. Generally, we recommend beginning to prepare application materials in the 8th month after establishment.

Q2: If actual project spending is less than the subsidy amount, do I need to return the difference?

A: This is one of the most common misunderstandings. The answer is that some cases require it and some do not, depending on the type and terms of the subsidy:

• Fixed-amount subsidy: If the subsidy is a fixed amount (such as 2 million yen), you usually do not need to return anything even if you spend only 1.5 million yen, because the subsidy has already been determined. However, you must submit complete spending receipts to account for how the funds were used.
• Proportional subsidy: If it takes the form of "a subsidy of 50% of total investment," and the total investment drops from the originally planned 5 million yen to 3 million yen, then the subsidy amount will correspondingly drop from 2.5 million yen to 1.5 million yen. You will need to return the overpaid portion.
• Annual subsidy: If funds are disbursed annually, the unused portion usually needs to be explained with a plan for use in the following year's budget, or returned at the time of the final report.

Recommended strategies are:

1. Execute strictly according to the original plan; don't arbitrarily cut back on investment
2. Be sure to keep original vouchers and invoices (ryōshūsho) for all spending
3. Report progress regularly to the granting authority, and if adjustments are needed, apply for changes promptly
4. Submit a complete fund-usage report and audit materials at the time of the final report

Q3: Will a Chinese-owned travel agency be rejected over nationality issues?

A: It will absolutely never be rejected directly because of nationality. Japan's subsidy system places no restrictions on the nationality of the applicant company or its operator; it requires only that the company be a Japanese corporation operating legally. This is a fundamental principle of the anti-discrimination framework (Japan's anti-discrimination legal framework).

However, indirect challenges that may arise in practice include:

• Language barriers: Some complex application forms are written in Japanese; we recommend hiring a translator or consultant to assist. Many prefectures provide free consultation services in Chinese.
• Differences in cultural and business understanding: Reviewers may not fully understand Chinese or Chinese-community business models. We recommend clearly explaining in your application how your business plan aligns with Japan's tourism-policy goals (such as attracting visitors to Japan and promoting regional revitalization).
• Credit assessment: If your company has limited credit information (such as a new business or a multinational one), you may need to provide more supplementary proof (such as a bank recommendation letter or partner-company certification).

Recommended approach: Proactively highlight your company's internationalization advantages. For example, emphasize your ability to attract Chinese-speaking travelers, build Japan–China tourism exchange, and advance the internationalization of local tourism—these are precisely the policy directions the government values.

Q4: If problems arise during the implementation of a subsidized project and it can't be completed on time, what are the consequences?

A: This depends on the severity of the problem and your response:

Minor delays (1–3 months):

• Immediately submit a "change application" (henkō shinseisho) to the granting authority, explaining the reason (such as supplier delays or pandemic impact) and the new completion timeline
• In most cases, as long as the reason is sound and your measures are appropriate, the department will approve the extension
• A return of the subsidy is generally not required in this case

Serious delays or inability to complete:

• You will need to return all or part of the unused subsidy
• You may be placed on a "list of dishonest companies," affecting your subsidy-application eligibility for the next 3–5 years
• In extreme cases (such as fraud), legal liability may be triggered

Preventive measures:

1. Build in a 20–30% time buffer when planning the project (e.g., if the original plan is 12 months, actually plan for 16 months)
2. Ensure that suppliers and partners have genuine performance capabilities and backup options
3. Communicate progress with the granting authority regularly (monthly), and report risks immediately when they arise
4. Keep all communication records, change applications, and approval documents

Q5: Do I need to pay tax after receiving the subsidy? Is it subject to corporate income tax?

A: This is a key question in financial planning. The answer is that it usually does not need to be taxed as ordinary income, but there are important conditions:

Tax-treatment principles:

• The subsidy itself is not counted as taxable income, but only if the subsidy's use is carried out fully according to the plan at the time of application
• If it is used to acquire assets (such as office equipment or vehicles), those assets are depreciated year by year, and the depreciation can be deducted from pre-tax income, indirectly providing a tax benefit
• If it is used for expense outlays (such as employee training or promotion), it is usually deducted directly in the year of the expense and does not need to be included in taxable income

Situations where tax is due:

1. If the subsidy is not used fully according to plan, the surplus portion may be deemed income and taxed
2. If the project generates additional revenue (such as ticket income from a new tour route), this income must be taxed normally
3. If the subsidy is diverted to other uses (such as paying director dividends), it will be deemed illegal income, taxed, and possibly subject to additional penalties

Financial advice:

• Communicate fully with a Zeirishi (tax advisor) to confirm the specific tax implications for your company
• Clearly indicate the use and amount of the subsidy in your accounting statements to facilitate tax review
• Keep all spending vouchers to prove that the subsidy was used entirely for the reported project
• Generally speaking, the tax burden of a subsidy is extremely light and should not be a reason to forgo applying

Common Mistakes in Applications and How to Avoid Them

Mistake 1: A Project Plan That Is Overly Grand and Unrealistic

Many applicants, in order to obtain more subsidy, write extremely grand project plans that are simply impossible to execute. For example, a small travel agency with annual revenue of 20 million yen plans to use an 8-million-yen subsidy to raise revenue to 50 million yen and add 20 employees within one year. The review committee will know at a glance that this is unrealistic.

How to avoid it: The project plan should be aggressive yet achievable. We recommend keeping the growth rate between 30% and 60%, with a time horizon of at least 12–18 months.

Mistake 2: Neglecting Communication with the Local Government

Many applicants submit their applications directly, having never communicated with the local tourism division (Kankōka) or industrial promotion division (Sangyō Shinkōka). What they don't realize is that communicating with government departments can often yield:

• The latest information on subsidy programs
• Guidance on preparing application materials
• A pre-assessment of whether the project plan aligns with policy directions

How to avoid it: Before formally applying, proactively visit or phone the relevant department to introduce your project concept. Many departments have free business-support advisors who can help polish your application.

Mistake 3: Financial Data That Is Unclear or Contradictory

When the budget table an applicant submits is inconsistent with the actual financial-statement data, it severely undermines trust. For example, if a company claims "annual revenue of 20 million yen" but the submitted tax return shows 12 million yen, the review committee will question the authenticity of the data.

How to avoid it: All financial data must be fully consistent with the most recent tax returns and accounting statements. If there is any discrepancy, explain the reason in writing in advance.

Conclusion and Action Recommendations

For Chinese owners of travel agencies and tourism businesses in Japan, applying for tourism grants and travel agency subsidies is an important way to obtain government funding support and accelerate business development. The keys are to:

1. Fully understand the subsidy categories: Different programs have different subsidy directions and support priorities; choosing the right direction achieves twice the result with half the effort
2. Prepare the application materials carefully: Especially the project plan and financial statements, which determine the success or failure of the application
3. Proactively communicate with the government: Use the free consultation mechanisms to obtain feedback and improvement suggestions before applying
4. Continuously monitor subsidy information: New subsidy programs are launched every year; we recommend regularly visiting each department's official website or subscribing to relevant information

If you still have questions about the specific subsidy application process, financial-statement preparation, or project-plan drafting, we welcome you to contact us for a free subsidy application consultation. We have extensive experience with subsidy applications for Chinese-owned businesses and can provide your travel agency with professional guidance, helping you successfully obtain subsidy funds and achieve business growth.