Monozukuri Subsidy 2020

One of the most popular subsidy programs starts accepting applications on March 26th.

What is Monozukuri Subsidy?

Monozukuri Subsidy holds one of the biggest budget for about 30,000 Small and Medium Enterprises (SMEs) based in Japan.

Applicants

System developers or Manufacturers trying to develop a new service, prototype and a new production process are eligible to apply for it. Each industry has different criteria, and the below is the eligibility.

• Manufacturers, constructors or transporters with less than 300 million JPY capital and less than 300 employees
• Software and Information Processing Industries with less than 300 million JPY capital and less than 300 employees
• Wholesalers with less than 100 million JPY capital and less than 100 employees
• Travel Agencies with less than 50 million JPY capital and less than 200 employees
• Service Industry (except for Software, IT, Travel agencies) with less than 50 million JPY capital and less then 100 employees
• Retailers with less then 50 million JPY capital and less than 50 employees
• Rubber Industry with less than 300 million JPY capital and 900 employees

<Warning> The following SMEs are not eligible to apply since these are not considered as “SMEs”

• 1/2 of capital or total shares issued in the company is owned by the associated company
• 2/3 of capital or total shares issued in the company is owned by a large corporation
• 1/2 of the board members are from large corporations, etc.

Criteria

1. Amount is from 1 million JPY to 10 million JPY
2. Coverage is 1/2 for SMEs, 2/3 for small business owners
3. Initial equipment investment must be at least 500,000 JPY
4. Submit Business Plan for the next 3 to 5 years and show it to the employee with the following promises
   - Annual 1.5% salary raise for employees
   - Minimum wage in the company must be 30 JPY more than the minimum wage in the area
   - Value addition of the business must be more than 3% per year on average
   (Value addition 付加価値額 = Operating income + HR cost + Depreciation Cost)
5. Must have a factory or a store to execute the subsidy project before applying for the subsidy

Expense

• All expenses must be paid within 10 months after the application is accepted
• All expenses must be proved with documents (Invoices)
• System Development
  - Purchase or Rental of measuring instrument, digital multifunctional printers, inspection tools, digital calculators
  - Purchase or Rental of software to develop the project
• Technical Assistance
  - in order to register Intellectual Property
• Consultation Fee (up to 1/2 of the subsidy)
  - Consulting fee and travel expense for consultants — up to 50,000 JPY per day
  - Fee for University Professor, Lawyers, Patent Lawyers, or Doctors — up to 50,000 JPY per day
  - SME consultants, IT coordinators — up to 40,000 JPY per day
• Transportation Fee
  - for shipping
• Cloud Service
  - Platform fee for cloud services or web platform
  - Server fee
  *Purchase of PCs, tablets, smartphones or Website operation fee are not covered
• Material Cost
  - for developing a prototype
• Outsourcing
  - up to 1/2 of the subsidy
• Intellectual Property
  - up to 1/2 of the subsidy
  - for outsourcing the procedures to Patent Lawyers

<Warning> Except for System Development (Technical Assistance, Consultation Fee, Transportation Fee, Cloud Service, Material Cost, Outsourcing, Intellectual Property), the expense must be up to 5 million JPY (without consumption tax). The following expenses cannot be covered with subsidy

• Office rent, water/gas/electricity bill
• Telephone and Internet
• Office supplies
• Meeting fee (at cafe or restaurant)
• Rental fee for cars
• Consultation fee for tax accountants or CPA to create tax documents or financial statements
• Revenue Stamp or any administrative fee
• Social Insurance
• Purchase or rental of PC, Printers, Software (Word, Excel, Illustrators, Photoshops or some software that will be most likely used for the other purpose aside from the subsidy project)
• Purchase of used products

Submitting proofs of the expense

The subsidy office usually accepts the expense based on the bank transaction. If you use a Credit Card, you should notify the office beforehand.

Don’t forget — Reporting

The crucial part of getting free money from the Government is fulfilling the obligation of reporting the results.

Did you miss this time?

Don’t worry, Monozukuri Subsidy Office is planning to have 4 more application periods in FY 2020. You’ll have chance in probably May, August, November in 2020 and February 2021.

Seems like the budget for Monozukuri Subsidy was increased in 2020. Though the acceptance rate is about 30–40% every year, this subsidy is always the top ones that everyone tries to apply.

If you are interested, research, get prepared and take action!