Types of grants and grants that can be used to start overseas business

Because entering overseas business requires a huge amount of money, you may have to give up because of financial difficulties. In particular, many small and medium enterprises may find it difficult to expand overseas due to their financial resources. However, there is a subsidy system that can be used mainly by small and medium enterprises that are concerned about financing. It is a system that can be used with favorable conditions such as no interest, low interest rate, and no need for repayment for companies seeking to expand overseas. The systems available for each phase are described below.

Subsidies and grants for planning and branding strategies
Subsidies, grants, and loans for the development of overseas businesses
Support system for investments and loans for overseas businesses
Summary

Subsidies and grants for planning and branding strategies

There are grants and grants that can be used from the planning stage and are easy to use at the time of a branding strategy or startup. Preparation is also important in order to aim for overseas expansion, so let’s make use of this system to make up for the lack of funds and create a firm foothold for overseas business.

Japan Brand Development Support Program

This is a project implemented by the Small and Medium Enterprise Agency, and mainly supports the formulation of strategies for developing overseas markets. Support will be provided to associations of commerce and industry, chambers of commerce and industry, associations, nonprofit organizations and collaborators of at least four small and midsize companies. In 2019, applications were submitted on February 18.

The subsidy rate is 2/3 (The maximum subsidy is 2 million yen.) for strategic planning support, 2/3 for brand establishment support in the 1st to 2nd year, and 1/2 (The maximum subsidy is 20 million yen.) for the 3rd year.

Foreign Application Subsidy (Subsidy for Overseas Application and Infringement Countermeasures for SMEs, etc.)

It is a subsidy system implemented by the Patent Office. Applications are accepted through JETRO and prefectural SME support centers. This is a subsidy for promoting overseas applications by SMEs, which subsidizes part of the application costs of SMEs planning to expand overseas. The application period is different between JETRO and prefectural small business support centers. (From June 24, 2019 to July 29 at JETRO.)

The subsidy rate is 1/2 of the cost, and the upper limit of the subsidy is 3 million yen per 1 company. The upper limit for 1 patent application is 1.5 million yen, and 600,000 yen for utility model, design and trademark applications. Expenses covered by the subsidy include application fees, domestic and local agency fees, and translation costs.

Popularization, demonstration, and commercialization projects (SME support type)

This system is operated by the Japan International Cooperation Agency (JICA). We invite proposals from SMEs seeking to commercialize businesses that can contribute to solving issues in developing countries and support the formulation of business plans. The maximum subsidy is 100 million yen per 1 case, and 150 million yen for large-scale and advanced product demonstration. Public recruitment is about twice a year.

Subsidies for projects utilizing technical cooperation and developing markets in emerging countries (countries that solve social issues)

Joint Development Project) Commonly known as Jump to Japan!
Business plans for solving problems in emerging countries such as South Asia and Africa are selected from the public. Subsidies will be provided for part of the costs of developing, demonstrating, and evaluating products and services in collaboration with local universities, research institutions, NGOs, and companies. The subsidy rate is 2/3 and the upper limit of the subsidy is 30 million yen.

Reference
Small and Medium Enterprise Agency “SME Overseas Development Support Measures”

Subsidies, grants, and loans for the development of overseas businesses

Success in overseas business requires not only the preparation and planning stages but also funds for development. Various organizations provide subsidies, grants, and loans that can be used to advance to the next stage. Other support services are provided by local governments and foundations.

Loans to Small and Medium-Sized Enterprises

This is a long-term loan provided by the Japan Bank for International Cooperation (JBIC) under cofinancing with Japanese financial institutions to SMEs that are expanding into developing countries. Companies must be capitalized at less than \1 billion or have 300 or fewer employees.

Reference
Japan Bank for International Cooperation “Small and Medium-Sized Enterprises”

Overseas expansion and business restructuring funds

Loans are provided by the Japan Finance Corporation to provide working capital and equipment funds to companies that need to expand or restructure their overseas operations. The limit is 72 million yen (Operating funds: 48 million yen).

Reference
Japan Finance Corporation “Overseas expansion and business restructuring funds”

Support for exhibiting at overseas fairs and exhibitions (Japan Pavilion)

This is a support system for exhibiting at overseas trade fairs run by the Japan External Trade Organization (JETRO). By exhibiting at JETRO’s Japan booth, we can reduce the burden and costs associated with opening stores.

Reference
Japan External Trade Organization “Support for Exhibits at Exhibitions and Business Meetings”

Support system for investments and loans for overseas businesses

In addition to direct investments and loans to overseas businesses, there is also support to raise funds.

Credit guarantees for financing overseas subsidiaries (standby credit)

This system is operated by Shoko Chukin Bank (Shoko Chukin Bank) and supports overseas subsidiaries to make it easier for them to receive loans from local financial institutions. Shoko Chukin’s credit guarantee facilitates local financing overseas.

specified letter of credit guarantee system

This system is operated by the Credit Guarantee Corporation to support fund raising. Credit guarantee corporations guarantee the debts of domestic financial institutions borne by domestic parent companies to enhance their creditworthiness.

Fund investment business

This is a fund investment business conducted by the Organization for Small & Medium Enterprises and Regional Innovation (Small and Medium Sized Organizations). We invest in investment funds that invest in small and medium enterprises to facilitate financing and management support for them.

Summary

Starting and developing overseas business requires a huge amount of funds. For this reason, I recommend that companies with limited funds actively adopt subsidies and grant programs offered by various organizations. It is necessary to check the information you are concerned about as soon as possible because the period of application, the content of support, and conditions may change every year.