Kanagawa & Yokohama Subsidy Guide: A Must-Read for Chinese Business Owners in Japan

Overview of the Kanagawa Subsidy System

Main Sources and Features of Kanagawa Subsidies

As Japan's second-largest prefectural economy, Kanagawa has a fairly comprehensive business support system. Kanagawa subsidies fall mainly into the following categories:

1. Subsidies for Small and Medium Enterprises Aimed at companies with fewer than 1,000 employees, Kanagawa Prefecture invests several billion yen each year to encourage innovation, transformation, and internationalization. In the FY2024 budget, SME support programs account for more than 30%.

2. Startup and Second-Career Founding Support Aimed at startups and career-changing founders, the maximum subsidy amount can reach JPY 1.5 million. For newly registered Chinese business owners who meet the requirements, this is a fast route to seed funding.

3. Employment Promotion Subsidy If you plan to expand your team, Kanagawa Prefecture offers subsidies for hiring new employees, providing up to JPY 600,000 in support per new hire.

4. Equipment Investment and IT Adoption Subsidy Available to companies pursuing modernization and digital transformation, with a subsidy rate of one-third to one-half of the investment amount, up to JPY 10 million.

Why Chinese Business Owners Should Pay Special Attention

Among Chinese-owned businesses in Japan, micro-enterprises and service industries make up the majority. These companies often face funding pressure, high personnel costs, and difficulty expanding into the market. With the support of Kanagawa subsidies, you can:

• Lower initial investment costs and quickly establish a local business foundation
• Legally obtain government funds that do not need to be repaid (not a loan)
• Strengthen your company's competitiveness and gain government recognition

An In-Depth Look at Yokohama Grant Programs

Yokohama's Advantage as a Major Subsidy Provider

As the political and economic center of Kanagawa Prefecture, Yokohama City leads the nation in both the number and the size of its grant (subsidy) programs. Yokohama's annual subsidy total exceeds JPY 10 billion, of which no less than JPY 4 billion goes to supporting SMEs.

Major Yokohama Grant Programs

1. SME Innovation Support Program

• Eligible recipients: companies with a place of business in Yokohama City and 150 or fewer employees
• Coverage: innovative activities such as new product development, market development, and process improvement
• Maximum subsidy: JPY 3 million (up to JPY 5 million for some programs)
• What it means for Chinese business owners: if you are in manufacturing, food processing, trade, or similar industries, this program can support product upgrades or brand building

2. Yokohama Business Establishment Expansion Grant

• For companies establishing or expanding a place of business in Yokohama City
• Office rent subsidy: up to one-half of the monthly rent, but no more than JPY 200,000 per month, for a subsidy period of 2–3 years
• This is very helpful for Chinese businesses expanding branch offices or relocating to Yokohama from another city

3. Human Resource Development Grant

• Subsidizes staff training costs, including external training courses and support for obtaining qualifications
• Subsidy rate of 50–100%, up to JPY 1 million per year
• If your company needs to upgrade employees' professional skills, this program can reduce training costs

4. Eco-Friendly and Energy-Saving Equipment Investment Grant

• Applies to companies installing solar panels, LED lighting, water-saving equipment, and the like
• Subsidy rate of 30–50%, up to JPY 5 million
• More and more Chinese-owned food and manufacturing companies are prioritizing sustainability, and can obtain support through this program

5. Trade Financing Interest Subsidy

• Subsidizes part of the financing interest for international trading companies
• Subsidy rate of 2–3%, effectively lowering financing costs for import-export companies
• Especially advantageous for Chinese businesses engaged in Japan-China trade

Basic Requirements You Must Understand Before Applying

General Application Requirements

No matter which Kanagawa subsidy or Yokohama grant you apply for, the following conditions must usually be met:

Business Registration Requirements

• A corporation or sole proprietor formally registered in Japan (some programs are limited to corporations)
• Complete tax registration with no major legal violations in the past three years
• For Chinese business owners: hold a valid residence status, and the company representative must be able to file Japanese tax returns

Financial Requirements

• The business has been operating for 1–3 years (specifics vary by program; startup programs typically require only 3–6 months of operation)
• Submit financial statements and tax filings for the past three years
• No arrears in taxes, social insurance, or employee wages
• A detail many Chinese business owners overlook: you must have an open corporate bank account to receive the subsidy

Industry Restrictions Certain industries are restricted, including:

• Finance and insurance
• Businesses related to adult entertainment
• Industries that violate Japanese law
• Most industries—manufacturing, trade, services, agriculture, and so on—are eligible to apply

Special Notes for Chinese Business Owners

Language and Document Preparation All application documents must be in Japanese. If your Japanese is not sufficiently professional, we recommend:

• Hiring a Japanese accountant or Gyoseishoshi to assist
• Using the free consultation windows offered by Yokohama City (Chinese-language support is limited, but interpretation can be booked in advance)
• Note that many ward offices (ku-yakusho) already have multilingual staff

Residence Status Chinese nationals holding the following residence statuses may apply:

• Business Manager visa (the most common choice)
• Highly Skilled Professional visa
• Permanent Resident or Long-Term Resident status
• Not eligible: Student visa, Technical Intern Training, Short-Term Stay

The Specific Application Process and Key Steps

Step 1: Confirm the Program and Pre-Screen Eligibility (1–2 weeks)

1. Visit the Yokohama City Economic Affairs Bureau website or the Kanagawa Prefecture Industry and Labor Bureau website
2. Confirm the application deadline for your target program (usually divided into spring and autumn cycles, each lasting 1–2 months)
3. Call the implementing agency for an informal eligibility pre-screening (Japanese: jizen sōdan)
4. Prepare: a certified copy of the company registration, tax filings for the past three periods, and a company overview

A Real Case: A Chinese business owner running a Japanese food delivery service discovered that the "SME Innovation Support Program" could subsidize the development of a delivery system, and contacted the implementing agency three months in advance. Although his Japanese was limited, with the help of a professional he ultimately received a JPY 3.5 million development subsidy.

Step 2: Prepare the Application Documents (2–3 weeks)

Key document checklist:

| Document Name | Description | Notes for Chinese Business Owners | |---------|------|-----------------| | Grant Application Form | Standard application form | Be sure to fill it out neatly in Japanese by hand or by computer | | Company Overview Statement | Your business plan | Explain why you need the subsidy, its specific use, and expected outcomes | | Financial Statements | Tax filings and settlement reports for the past three periods | The figures must match what was submitted to the tax office | | Estimate (mitsumorisho) | Quotes for the investment items (if any) | At least 2–3 supplier quotes to demonstrate reasonable pricing | | Written Pledge (seiyakusho) | A pledge signed by the company representative | Must be personally signed and stamped with the company seal | | Certified Copy of Registration | Proof of corporate registration | Must be the latest version, no more than three months old | | Photos | Company exterior, production scenes, etc. (required by some programs) | Clear and professional; a professional photographer is recommended |

A Tip: The document most prone to errors is the business plan. Don't just write "I need money"—clearly explain:

• Your current business situation and challenges
• The specific use of the subsidy funds (down to the individual item)
• Your growth targets over the next three years (sales, headcount, etc.)
• Why this investment is necessary and feasible

Step 3: Formal Submission and Review (4–8 weeks)

• Submit all documents to the designated agency within the specified deadline
• Options: paper submission or online system submission (in recent years this has become fully digital)
• During the review period, the review committee may request additional materials or conduct an on-site inspection (inspecting the business)
• On-site inspections are usually completed within an hour and check that the actual state of the business matches the application

Preparing for the On-Site Inspection:

• Clean the office and production site
• Prepare ledgers, contracts, employee rosters, and other documents for inspection
• It is best for the business owner to be present to explain the situation

Step 4: Approval and Disbursement of Funds (2–4 weeks)

• You will usually receive formal notification (saitaku tsūchi) within one month of the review being completed
• After approval, you must sign an agreement (grant award contract)
• Funds are disbursed in installments, typically 2–3: initial (before the project begins), interim (during implementation), and final (after completion)
• From application to receipt of the final subsidy payment, the entire process usually takes 4–6 months

Managing the Use of Funds:

• Once the subsidy arrives, it must be used within the specified deadline for the items designated in the application
• Each purchase or payment must have its original invoices and supporting documents retained
• The Japanese government's oversight of subsidy use is extremely strict; any misappropriation or falsification will result in full clawback plus penalties
• We recommend hiring an accountant specifically to manage the subsidy accounts

Frequently Asked Questions (FAQ)

Q1: I'm a sole proprietor (jieigyo). Can I apply for Kanagawa subsidies?

A: Yes, but your options are limited. The programs available to sole proprietors are mainly startup support funds and some employment promotion subsidies. However, most of the larger programs (such as the SME Innovation Support Program) are limited to registered corporations. I recommend you consider forming a kabushiki kaisha or a godo kaisha—the cost is low (registration fees are about JPY 60,000)—and after registering, the range of programs you can apply for will expand dramatically. Many Chinese business owners in Japan form a corporation and then secure subsidies worth several million yen. For the specific incorporation process, you can consult a Gyoseishoshi, at a cost of about JPY 50,000–80,000.

Q2: My company was only founded six months ago. Can I apply for subsidies?

A: It depends on the type of program. Programs like startup support funds and startup financing subsidies are designed specifically for new businesses and can be applied for within six months of founding; some programs even require that you were founded only just before applying. Other programs, however, usually require 1–3 years of operation. For new businesses, my advice is: in the first year, prioritize startup-related subsidies and financing support, which have shorter review cycles (8–12 weeks). After the second year, once your company has accumulated a full set of financial data, you can apply for larger innovation and investment subsidies. I've seen a Chinese-owned cloud computing company use a startup financing subsidy to obtain JPY 2 million, and a year later, backed by complete financial statements, secure a JPY 5 million IT adoption investment subsidy.

Q3: What if my subsidy application is rejected? Can I request a review?

A: There is usually no formal reconsideration mechanism, but you can take the following actions: First, request a detailed explanation of the reasons for rejection (review comments). Most of the time, the reason for rejection is that the application was unclearly written, the financial data had gaps, or the business plan was not specific enough. Second, you can improve your application in the next cycle—about 50–60% of rejected applications succeed after revision. Third, seek advice from the implementing agency's consultation window, which will point out specific areas for improvement. Finally, check whether there is another similar program better suited to your company. Don't give up—many business owners who were ultimately approved were rejected on their first try. Some programs even recommend that business owners attend a free application briefing (setsumeikai) before applying, which can significantly increase the success rate.

Q4: Once the subsidy arrives, how do I manage and use it correctly to avoid the risk of a refund?

A: This is the most important question, because the government's oversight of subsidy use is extremely strict. The specific rules are as follows: First, set up a dedicated account. It is best to open a bank account used exclusively for the subsidy, with all subsidy-related expenditures made from this account, to facilitate later audits. Second, keep all records. For any purchase of goods or services, you must retain the original invoice (ryoshusho), the quote, the contract, and the payment record, and after scanning digital copies, keep them safely for at least five years. Third, execute strictly according to the application. Subsidy funds may only be used for the items listed in the application; any deviation is illegal. For example, if you said in your application that the funds were for purchasing machinery, you cannot repurpose them for office renovations. Fourth, report regularly. The government will require you to submit periodic usage reports (jisseki hokokusho), usually after the project is completed. Fifth, be prepared for an audit. The government conducts random on-site audits (jitchi kensa) of subsidized companies to check whether the funds were used legally. Only after passing the audit is the subsidy truly yours. We recommend hiring a professional accountant to handle this work, at a cost of about JPY 100,000–200,000—well worth the investment.

Q5: My company is in arrears on taxes or social insurance. Can I still apply for subsidies?

A: In principle, no. This is a hard requirement of the application. During the review, the Japanese government will investigate your tax and social insurance payment status, and any arrears will result in instant rejection. If you have this problem now, you must address it immediately: First, contact the tax office (zeimusho) and the pension office (nenkin jimusho), explain your difficult situation, and apply for installment payments (bunkatsu nofu). Most of the time, the government will agree to give you a 2–3 month grace period, as long as you show good faith. Second, draw up a repayment plan and clear the arrears as soon as possible. It usually takes 3–6 months to fully clear the record. Third, after paying off the arrears, wait 2–3 months before applying for the subsidy to ensure there is no record risk. I've seen a Chinese-owned restaurant that fell behind on social insurance due to payment difficulties during the pandemic; through installment payments and negotiation with the government, it cleared the arrears within three months and successfully secured an innovation subsidy six months later. The key is proactive communication—the government is more understanding of business difficulties than you might imagine.

Additional Advice and Resources for Applying for Subsidies

Make Use of Free Consultation Services

Both Kanagawa Prefecture and Yokohama City offer free business consultation services—the resource most easily overlooked by Chinese business owners:

Yokohama City SME Support Center

• Provides free management consultation and subsidy application guidance
• Available by phone or in person, Monday to Friday, 9:00–17:00
• Phone: 045-201-1009 (multilingual staff can be booked in advance)

Kanagawa Prefecture SME Agency Consultation Room

• Covers the entire prefecture, with branches in every prefectural district
• Consultation on subsidy programs, review of application documents, and more
• Completely free; we recommend consulting before you formally submit your application

Japan External Trade Organization (JETRO) Yokohama Center

• For foreign businesses in Japan; Chinese interpretation available
• Provides full-spectrum support including market research, financing, and subsidies
• Phone: 045-633-4511

Working with Professionals

If your Japanese or financial capabilities are limited, we recommend seeking professional help:

Gyoseishoshi (Administrative Scrivener)

• Specializes in handling application documents and legal procedures
• Fees: JPY 30,000–80,000 depending on the complexity of the program
• Can significantly increase your application's success rate

Zeirishi / Accountant

• Assists with preparing financial documents and managing subsidies
• Fees: billed by time, about JPY 100–150 per minute
• Especially recommended for the post-approval management of subsidy funds

Chinese-Language Business Consulting Firms

• There are several professional firms in Chinese-populated areas such as Yokohama and Kawasaki
• They understand both Japanese rules and Chinese, making communication smoother
• Can handle the full range of services from company registration to subsidy applications

Summary and Recommended Actions

As a Chinese business owner in Japan, making full use of Kanagawa subsidies and Yokohama grants is a legal, efficient way to accelerate your business's growth. Depending on your company's stage, the action path I recommend is:

Early Startup Stage (0–1 year) Prioritize startup support funds and startup financing subsidies to obtain seed funding as quickly as possible

Growth Stage (1–3 years) Apply for the SME Innovation Support Program, business establishment expansion grants, and similar programs to support business expansion

Stable Stage (3+ years) Apply for high-value equipment investment, IT adoption, and human resource development subsidies to achieve a corporate upgrade

Key Success Factors

• Prepare early; don't leave it to the last minute
• Make full use of free consultation to avoid application mistakes
• Hire professionals—the cost is negligible compared to the returns
• Manage the use of subsidy funds strictly to ensure compliance

Get Professional Help

If you have any questions about a specific program, or need to find out whether your company meets the application requirements, you are welcome to book a free consultation. Our professional team has years of subsidy application experience and has successfully helped more than 200 Chinese-owned businesses in Japan secure subsidies, totaling more than JPY 300 million.

No matter the size of your company, your industry, or your level of Japanese, we can tailor an application plan for you. Booking a consultation is entirely free, with no obligation.

Act now and let the government support your company's growth!