Formulation of support measures such as “Financing schemes, subsidies, and grants” for companies expanding overseas

Need for loans for overseas expansion

When thinking about expanding overseas, the first thing you need is funds. Small and medium enterprises and venture companies, in particular, cannot cover their budgets with their own funds alone, so they will use financing, subsidies, and other programs that can be used to raise funds.

Loans, subsidies and grants are provided mainly by public institutions, and loans for overseas expansion can be used under more favorable conditions. In order to use it, you need to meet various conditions, but if you can use it, it is a very convenient system.

The support system for overseas expansion includes not only financial support but also support for providing information, developing business plans and markets, and issuing letters of credit. You may want to consider such support as a first step.

Loans from the Japan Finance Corporation

Overseas development and business restructuring funds are loans provided by the Japan Finance Corporation. The Ministry of Finance’s fiscal investment and loan program supports SMEs’ overseas expansion and business restructuring.

We lend equipment and working capital in foreign currencies as funds for overseas expansion and business reconstruction. The loan limit is 72 million yen and working capital is 48 million yen.

If certain conditions are met, a special interest rate of up to \400 million will be applied.

Overseas expansion support is a system to support the overseas expansion of SMEs by the Japan Finance Corporation. The standby credit system, which issues letters of credit for purposes similar to debt guarantees, also makes it easier to raise funds in local currencies.

It is also possible to borrow long-term funds from financial institutions affiliated with the Japan Finance Corporation.

Support and loans from ministries and agencies

The Ministry of Health, Labour and Welfare provides a system to subsidize the cost of human resource development for companies planning to expand overseas as a subsidy to support overseas expansion. Up to 1 million yen per year will be subsidized for the expense of employees studying abroad, and up to 750,000 yen per year will be subsidized for the expense of housing and transportation. Companies that have never expanded overseas are eligible.

The Career Development Promotion Subsidy is one of the employment-related subsidies provided by the Ministry of Health, Labour and Welfare. Although it is not specialized in overseas expansion, subsidies such as wage subsidies and actual training costs are available as training expenses for overseas related work.

The Ministry of Economy, Trade and Industry also provides global technical cooperation support services. This is a subsidy program to help prevent the outflow of technologies and to support development and market development for overseas expansion.

This is for small and medium enterprises and universities, and the maximum amount is up to 20 million yen per year for 1 business and up to 50 million yen for 3 years. The Small and Medium Enterprise Agency supports the development of the JAPAN brand in order to develop it into a world-class brand in terms of Japanese materials and technologies.

Support by the Organization for Small & Medium Enterprises and Regional Innovation

The Organization for Small & Medium Enterprises and Regional Innovation, Japan, as an implementing agency of national SME policy, provides support services according to the stage of growth from startup to growth to maturity.

They have a wide range of cooperation such as local governments, support organizations, domestic and overseas organizations, and support that is useful for overseas expansion.

The fund investment business is a fund formation and investment business conducted by the Organization for Small & Medium Enterprises and Regional Innovation to raise funds for SMEs. We will form investment funds with private institutions to facilitate financing for SMEs and provide them with in-depth support for their management.

In addition to venture companies and start-up companies, we support the development of new business of existing small and medium enterprises. Each fund has a different investment target, so in order to use it, you need to go through an examination by the investment company that operates each fund.

SMRJ and the Japan External Trade Organization provide strategic support for the overseas expansion of SMEs. In addition to supporting the formulation of business plans for overseas expansion and the development of sales channels, the government will also subsidize up to ¥1.4 million in the case of direct investment to support the formulation of overseas expansion strategies.

Support by the Shoko Chukin Bank

The Shoko Chukin Bank (Shoko Chukin Bank) is a financial institution for small and medium-sized enterprises. We are also strengthening cooperation with the Japan External Trade Organization in order to strengthen support for overseas expansion by SMEs.

Shoko Chukin provides financing to support overseas business expansion (Overseeds 21) for SMEs to expand overseas and overseas subsidiaries to expand their businesses. Loans include loans from the parent company to overseas subsidiaries in the form of subloans, direct loans to overseas subsidiaries, and loan guarantees through the standby credit system to enable financing by local financial institutions.

In addition to loans, trade settlement for export and import and exchange forward contracts are also available.

Support System by Credit Guarantee Corporations

Credit guarantee corporations have overseas investment guarantee systems and specified letter of credit guarantee systems. This is not a loan system, but a support system to support a loan.

The Overseas Investment Guarantee Program is a support system for SMEs that have established overseas corporations to receive investment funds from financial institutions. Credit guarantee corporations provide debt guarantees to make it easier to obtain loans for overseas direct investment projects.

The specified letter of credit guarantee system is a support system in which overseas subsidiaries receive loans from local financial institutions. Credit guarantee corporations guarantee the parent company’s debt to domestic financial institutions, making it easier for domestic financial institutions to issue letters of credit to local financial institutions.

This will make it easier for overseas subsidiaries to get loans from local financial institutions.

Other Support Services

Various other organizations provide support services. It is necessary to compare the contents of each support group and business, and to make a selection according to the business development and necessary support of the company.

The Japan Content Localization and Promotion Support Subsidy is a subsidy program provided by the Imaging Industry Promotion Organization as its secretariat. We provide assistance for localization and promotion activities.

The Japan Bank for International Cooperation also supports small and medium-sized companies. There are fund procurement support, information provision, and cooperation with governments of emerging countries and overseas local financial institutions.

The Tokyo Metropolitan Government also provides a wide range of support. For example, the Industrial Labor Department responds to the demand for funds from SMEs looking to develop overseas markets through the framework of industrial empowerment loans, and provides loans for overseas expansion. The Tokyo Metropolitan Government also subsidizes credit guarantee fees for small enterprises.

The details of the loan and subsidy systems are as of the time of publication (May 2019). For the latest information on the system, please contact your organization.

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