Startup Funding in Japan: Government Grants and VC Options for Foreigners
Japan is putting serious money into startups, including those led by foreign founders. This guide explains how funding in Japan works, which government grants and subsidies you can apply for, and how to approach venture capital as a non-Japanese entrepreneur.
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Japan’s New Startup Boom
Japan has decided that startups are a national priority. The government’s Startup Development Five-year Plan aims to increase the number of startups tenfold and grow investment in startups to ¥10 trillion by 2027.
There are also ambitious ecosystem targets:
- Around 10,000 startups and 100 unicorns by 2027
- Tokyo now ranks in the global top 10 startup ecosystems according to the Global Startup Ecosystem Report 2024
For foreign founders, the key message is simple:
If you build a real business in Japan (with a local company, local jobs and real activity), you can usually access the same grants, loans and VC as Japanese founders – plus some special options just for foreign-led companies.
If you are still at the planning stage, it also helps to read Start a business in Japan and Startup visa and business manager visa in Japan.
How Startup Funding Works In Japan
Before we dive into specific schemes, it helps to see the big picture. Most startups in Japan combine several types of funding:
- Bootstrapping and friends/family
- Government grants and subsidies (national and local)
- Government-backed loans (mainly via Japan Finance Corporation)
- Venture capital and angel investors
- Corporate venture capital (CVC) and strategic partners
Japan’s VC market has grown quickly. In 2022, VCs in Japan raised roughly ¥600+ billion, and assets under management have been rising steadily.
For foreign founders, the smart way is often:
Incorporate in Japan → use grants/subsidies and JFC loans for early runway → then raise seed/Series A from VC once you have traction.
We will walk through each layer.
Government Grants and Subsidies for Startups
There is no single “big startup grant” that everyone gets. Instead, Japan has many small and medium size programs, often targeted at:
- Innovation (AI, deep tech, green, healthcare, tourism)
- Regional revitalization outside Tokyo
- Foreign companies entering Japan or setting up R&D bases
1. National-level startup support (METI, JETRO, SME Agency)
Key players at the national level:
- METI (Ministry of Economy, Trade and Industry) – runs the Startup Development Five-year Plan, J-Startup program, and various innovation subsidies.
- SME Agency and SME Support Japan – administer many of the practical subsidy schemes for small and medium businesses.
- JETRO – supports foreign companies entering Japan and Japanese startups going global, with acceleration programs and information on incentives.
Typical types of support include:
- R&D and innovation subsidies (for tech, green, digital projects)
- Support for PoC / demonstration projects with Japanese partners
- Tax incentives and local tax reductions in some zones for certified companies
Many of these programs do not care about your nationality – they care that you:
- Have a Japanese entity (KK or GK)
- Are actually operating in Japan
- Fit the sector and size requirements
2. Tokyo Metropolitan Government programs (very friendly to foreigners)
Tokyo is currently the most aggressive local government when it comes to attracting startups and foreign entrepreneurs. TMG and its Invest Tokyo initiative offer:
- Subsidies for foreign companies setting up in Tokyo (office rent, initial costs, sometimes staff costs)
- GX-related foreign company subsidies for green-tech startups entering Tokyo (FY 2024–2025 programs)
- Overseas Financial Corporation Establishment Subsidy and similar schemes for fintech and financial startups
- Program to Increase Foreign Entrepreneurs – supports foreign founders to prepare a business and then change to a startup-related visa category
There are also support centers such as:
- Business Development Center Tokyo (BDC Tokyo) – one-stop advisory desk for foreign companies (funding, partners, lifestyle).
- Tokyo One-Stop Business Establishment Center (TOSBEC) – helps you complete incorporation, tax, and social insurance procedures in one place, with multilingual support.
3. Other local governments (Fukuoka, Osaka, regional cities)
Beyond Tokyo, many cities actively compete for startups by offering:
- Subsidies for office rent
- Employment subsidies for local hires
- Grants or low-interest loans for startups under a certain age (often < 5 years)
- Extra benefits specifically for foreign entrepreneurs
For example:
- Fukuoka City’s Startup Package for Foreign Entrepreneurs offers reduced-interest loans (around 1.3%) up to ¥25 million for startups established within the last two years in Fukuoka.
Other prefectures (Aichi, Osaka, Hokkaido, Okinawa, etc.) also run their own schemes, especially if you are in priority sectors like tourism, robotics, or agriculture-tech. Local details change often, so always check your city hall website or ask JETRO’s local office.
If you are still deciding where to base your startup, our guide Cost of Living in Japan: Tokyo vs Osaka can help.
Quick Comparison: Main Public Funding Options
| Type of support | Who runs it | Typical size | Best timing | Good for foreigners? |
|---|---|---|---|---|
| National innovation subsidies | METI / SME Agency | From hundreds of thousands to several million yen | After you incorporate and have a clear project plan | Yes, if you have a Japanese entity and Japanese-language support |
| Local startup subsidies | City/prefecture (e.g., Tokyo, Fukuoka) | Often ¥1–4 million equivalent, sometimes more | Early stage (0–5 years after incorporation) | Very often targeted to foreign-led companies as well |
| Entry support for foreign firms | JETRO, TMG, FSA | Advice, free office space, subsidized PoC projects | Before or just after entering Japan | Specifically designed for foreign entrepreneurs and foreign corporations |
| Government-backed startup loans | Japan Finance Corporation (JFC) and similar | Up to tens of millions of yen | Very early, even pre-revenue | Available to foreign residents with a solid business plan and status of residence |
Government-Backed Loans: Japan Finance Corporation (JFC)
In practice, loans from Japan Finance Corporation (JFC) are one of the most important early-stage funding tools in Japan. JFC is a government-owned policy bank that supports micro-businesses and SMEs across the country.
Key points about JFC loans:
- Designed for startups and small businesses, including those run by foreign residents
- Can cover both equipment and operating capital (staff, rent, marketing, etc.)
- Often cheaper and more flexible than commercial bank loans
- JFC’s “Micro Business and Individual Unit” offers startup-related financing plus seminars and business support.
Guides for foreign founders note:
- Foreign nationals are eligible if they have lawful residence and a clear business plan, but screening can be stricter and all documents must be in Japanese.
Typical documentation includes:
- Detailed business plan and financial projections
- Personal ID and residence card
- Company registration documents (if already incorporated)
- Quotes for equipment and initial costs
If you want to go down this route, it is worth reading Business taxes in Japan.
Startup Support Centers for Foreigners
Japan has built a network of startup support centers specifically to help foreign entrepreneurs navigate bureaucracy, funding and networking.
Important names:
- JETRO – market research, partner matching, access to incentives and grants
- Tokyo One-Stop Business Establishment Center (TOSBEC) – incorporation, tax, social insurance, visas in one place
- Business Development Center Tokyo (BDC Tokyo) – fundraising support, introduction to banks and VCs, information on subsidies
- Various startup hubs and incubators in Tokyo, Osaka, Fukuoka and Nagoya
These centers usually offer:
- Free consultation in English or other languages
- Referrals to subsidy programs, banks, JFC, and private accelerators
- Support letters that can help with startup visa or Business Manager visa applications
You will get more value from these centers if you arrive with:
- A one-page summary of your business
- A draft 12–24 month plan for Japan
- Questions about funding you want to ask
For a broader overview, see Crowdfunding the entrepreneurs in Japan and Top funding options for foreign entrepreneurs in Japan.
Venture Capital in Japan: What Foreign Founders Should Know
Alongside government support, Japan’s VC market has expanded. Japan now hosts:
- More than 10,000 startups and around US$6 billion in annual VC investment, by some 2025 estimates
- Active participation from foreign funds who feel there is less competition than in Silicon Valley or Berlin
Types of VCs you will meet
- Independent Japanese VCs
- Examples: Global Brain, East Ventures, DNX Ventures, Coral Capital, INCJ, Samurai Incubate, SBI Investment
- Invest from seed to growth, mostly in Japan-based companies
- Some funds invest heavily in B2B SaaS, deep tech, fintech, climate tech and mobility
- Corporate Venture Capital (CVC)
- Examples: Sony Innovation Fund, various CVCs of large Japanese groups (telecom, trading houses, manufacturers)
- Often more strategic: they want technology or partnerships that match their core business
- Foreign and cross-border funds
- US and Asian funds increasingly co-invest in Japanese startups or create Japan-focused vehicles
- New funds like the Geodesic Alliance Fund raise capital partly from Japanese LPs to invest in startups relevant to Japan (national security, AI, space).
A recent IMF paper and ecosystem studies all say the same thing:
Japan’s startup ecosystem is growing, but competition for good deals is still lower than in the US or Europe – which can be attractive for founders who can execute well.
Example VC segments
| Segment | Example funds | Typical stage | Check size (rough) | Notes for foreign founders |
|---|---|---|---|---|
| Seed / pre-seed | Samurai Incubate, Coral Capital, East Ventures | Pre-seed, Seed | ¥10–100 million | Often open to first-time founders, sometimes accept English decks |
| Early / Series A | Global Brain, DNX Ventures, SBI, INCJ | Seed–Series B | ¥50–500 million | Look for product-market fit and early traction in Japan or Asia |
| Growth / later stage | Corporate VC arms, bank-backed funds, new MUFG fund | Series B+ | ¥500M+ | Want clear scaling path; easier if you already have revenue and local partners |
How Foreign Founders Can Access VC In Japan
VC money in Japan is available to foreigners, but you need to show that you are serious about Japan, not just using it as a side market.
Here is a simple roadmap:
- Set up a Japan story
- Incorporate in Japan (KK or GK) and open a corporate bank account. See Opening a corporate bank account in Japan.
- Clarify how much of your team, IP and revenue will be tied to Japan.
- Show local traction
- Even small wins (a paid pilot with a Japanese client, highly engaged beta users, a joint PoC with a local partner) matter a lot.
- Prepare a Japan-ready pitch deck
- Clear in both English and Japanese where possible.
- Short, concrete, with good financial projections, and realistic timelines.
- Leverage support centers and accelerators
- Ask JETRO, Invest Tokyo, and industry-specific accelerators to introduce you to relevant VCs.
- Join Japanese or Japan-focused programs (J-Startup, Startup Ecosystem Tokyo Consortium, university accelerators).
- Sequence your funding
- Use grants and JFC loans for early validation.
- Approach VCs once you can show that public support plus early traction have reduced the risk.
It often helps to work with a bilingual accountant or legal adviser.
A Step-By-Step Funding Strategy For Foreign Founders
To make all this concrete, here is one possible path for a foreign founder coming to Japan:
- Before arriving or during your first months
- Decide your visa strategy (Startup Visa, Business Manager, or other) and high-level plan. See Startup visa and business manager visa in Japan.
- Talk to JETRO or Invest Tokyo online about incentives in your target city.
- Months 1–6: Incorporation and early proof of concept
- Incorporate a KK or GK, set up bookkeeping, and open a bank account.
- Apply for JFC startup loans and check local subsidy programs that match your sector.
- Use Tokyo One-Stop Business Establishment Center or similar hubs if you are in Tokyo.
- Months 6–18: Grants, pilots, and seed funding
- Use grants/subsidies to fund a PoC with a Japanese customer or partner (for example, a GX-related PoC in Tokyo).
- Start talking to seed VCs and angels; show them early metrics and clear plans to scale in the Japanese market.
- Year 2 and beyond: Scaling and larger VC rounds
- Explore Series A/B funding from Japanese VCs, CVCs, and cross-border funds.
- Consider government-backed large funds or public-private programs that support growth-stage startups, such as new Tokyo impact funds or national co-investment vehicles.
Throughout this journey, do not forget the basics: keep your tax payments and social insurance up to date, as this also matters for later visa renewals and possibly permanent residency. See Startup culture for entrepreneurs in Japan.
Common Challenges For Foreign Founders (And How To Avoid Them)
- Underestimating Japanese-language requirements
- Many subsidy and loan applications are only in Japanese, and your business plan may need to follow a strict format.
- Solution: budget for translation or work with a bilingual consultant early.
- Expecting “free money” without skin in the game
- Public programs rarely fund 100% of costs; you usually need to co-invest and show commitment.
- Ignoring sector focus
- Japan’s most generous programs are in green tech, digital, healthcare, deep-tech and regional revitalization.
- If your startup fits these themes, emphasize that clearly. If not, look more at generic JFC loans and private VC.
- Raising VC too early
- Many Japanese VCs want to see some traction in Japan before investing.
- Use grants and loans to reach those first proof points instead of trying to skip straight to a large seed round.
- Not using free support
- Foreign founders sometimes ignore government support centers, assuming they are slow or bureaucratic.
- In reality, centers like JETRO, BDC Tokyo, and TOSBEC can save you weeks of research and connect you with the right people.
Final Thoughts
If you are a foreign founder, Japan is no longer a “closed” market. The government wants more startups, more foreign entrepreneurs, and more innovation. To make the most of this moment:
- Build a real base in Japan (company, team, customers)
- Mix public funding (grants, subsidies, JFC loans) with private funding (VC and angels)
- Use startup support centers to navigate the system instead of trying to do everything alone
- Align your story with Japan’s priorities: digital, green, health, deep tech and regional revitalization
With the right structure and a patient approach, government grants, subsidies and VC in Japan can provide a strong runway for your startup – whether your dream is to conquer the Japanese market or to use Japan as a high-trust, high-tech base for global expansion.
Disclaimer
This article is for general informational purposes only and does not constitute professional advice. Laws, prices and regulations vary by location and change over time. Consult a qualified professional for guidance on your specific situation.
