The Tokyo Metropolitan Government (TMG) and the Financial Services Agency, Japan (JFSA) both offer subsidy programs to aid in your initial business setup costs. TMG provides the Overseas Financial Corporation Business Establishment Subsidy Program and JFSA provides the Financial Start-up Support Program (for the period of April 2024-March 2025). The JFSA program applies to asset management companies that aim to register specific financial licenses, while the TMG program applies to both asset management and FinTech companies. Asset management companies may apply to both programs concurrently. The following guide provides information on subsidies from both programs.
Generally, ābusiness setupā costs refer to the costs paid to service providers when setting up your business (i.e. company incorporation, hiring, office search, licensing, legal/tax services, etc.).
The TMG and JFSA subsidy programs are not eligible for registration taxes, fees paid to the government or public agencies, employee wages, or office rent.
Application Window
For an expense to be eligible for a subsidy program, it must have been paid within the same fiscal year. It is important to note that the Japanese government fiscal year is April-March. For TMG subsidies, you must apply for the program before company registration, while JFSA allows you to apply even after the company registration.
If a financial license is required for your core business to start, ābusiness setupā would therefore include license registration.
TMG subsidizes expenses paid within the fiscal year of business setup completion; however, the business setup can be completed in a different year than the program application.
The JFSA program is only eligible for companies that aim to complete business setup in the same fiscal year as application. Additionally, JFSA only pays subsidies for expenses paid within the program for the fiscal year*. Therefore, if you plan to complete business setup by the end of this Japanese government fiscal year and would like to apply for the JFSA program, sooner is better.
*Please check JFSA/weConnect (JFSAās agent) for the latest information..
Subsidy Program Overlap (Asset Management Companies)
For asset management companies, some of the expenses covered by the programs overlap. If you are applying for both programs, note that overlapped expenses are paid by one of the programs, not both (i.e. If JFSA program pays the subsidy for company service provider fees, TMG program will not pay it). A good strategy for an asset management company is to apply for different expenses from each program.
Compared to the TMG program, the expense subsidy rate are greater with the JFSA program (TMG: 50% vs JFSA: 70%, in FY2024). The JFSA program also provides a coordinated, free English support service which includes subsidy application support.
General Process of Subsidy Program
- Submit application form for the program.
- Interview by the government agency (and/or their agent).
- Government agency approval of eligibility for the program.
- Setup business.
- Pay service provider fees for company setup and licensing (if license is required for your core business to start).
- Submit application form for the subsidy.
- Government agency approval of eligibility for subsidy.
- Government agency pays the subsidy by reimbursement.
- Submit required post-subsidy regular reports (usually for 2 years after the subsidy payment).
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Overview of TMG/JFSA Program Comparison
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¤ | TMG | JFSA |
Eligible Companies | Asset Managers who aim to register the licenses (same as the right) and/or to start the specific license exempted business & FinTech companies | Asset Managers who aim to register the following license:
- Investment Management Business
- Investment Advisory and Agency Business
- Type II Financial Instruments Business |
Purpose | Subsidy | Subsidy and other supports in English. |
Total Subsidy Amount | AM with license required: Up to JPY 12,500,000.
AM with the specific license exempted business & FinTech: Up to JPY 7,500,000. | (Up to JPY 14,000,000.) |
Expense Subsidy Rate | Up to 50% | Up to 70% |
Expenses Eligible for Subsidy (Fees to service providers only). | - Consultation fees with experts for services such as registration and acquisition of license for engaging in the financial instruments business, and consultation on legal and tax matters. (i.e. incorporation support, visa application support)
- Permanent personnel recruitment costs (not limited to compliance officer) paid to the licensed hiring agents.
- Initial office costs (refundable fees paid when moving into an office, such as an admission fee, Key money, etc.).
- Association admission/annual membership fee
- AM: Outsourcing compliance work
- AM: Outsourcing middle and back office work | Initial set-up support as below:
- Incorporation
- Financial License Application
- Bank Account Opening
- Visa Applications (Including acquisition of residency status for family members)
- Agent fees for a permanent compliance officer recruitment. |
Program Application | Prior to Tokyo entity registration. | Within the same fiscal year of business setup (before or after Japan entity registration). |
Subsidy Application (as far as each of TMG/JFSAās budget for the applicable fiscal year is left) | One time application after business setup (must be within the same fiscal year of the business setup). By the end of February in the fiscal year. | After business setup within the same fiscal year of the program application. (weConnect, the agent of JFSA handles it for the eligible AMs.) |
Criteria for Business Setup | To meet all of the below criteria:
- Entity registration completion
- Securing dedicated office spaceļ¼a dedicated desk in co-working space is applicableļ¼
- Employment insurance application completion for minimum one "full-time" worker employed by the Tokyo entity
- AM: License registration completion (acceptance by JFSA on their receipt of the finalized license registration application documents), or starting the specific business exempted from license registration
- FinTech: License registration completion, if required to launch business | License registration completion |
Note | ć
¤ | Based on the FY2024 program. |
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