To learn more about financial aid for employees and individuals in Japan, check our list here.
While not legally binding, the Japanese government’s request for people to stay at home during the coronavirus outbreak has propelled the economy into an “extremely severe situation,” according to the Cabinet Office.
Economists expect a 25 percent decrease in consumer spending, as well as a 60 percent drop in exports this quarter. Small businesses have endured a particularly strong hit as sales plunge, and global travel restrictions have devastated the country’s tourism industry.
To help curb the financial crisis, the government has implemented several measures that support employers and small to mid-sized enterprises (SMEs). The Japan External Trade Organization (JETRO) has also launched a multilingual helpline for foreign companies and foreign affiliated companies, in need of support and information concerning economic measures, labor affairs, status of residence and other related matters. Here’s an outline of available resources, which companies are eligible and how to apply:
The Emergency Economic Package
In early April, the Cabinet approved an emergency economic package now worth over ¥117 trillion. Its policies offer larger subsidies for firms that keep workers on their payroll. Companies hit by the virus will be able to defer income and regional tax payments for a year. Some smaller businesses will see their property taxes cut back as far as zero.
SMEs will receive cash payments of ¥2 million each and individual business owners, including freelancers who own businesses, will receive ¥1 million each.
The government has also secured a new loaning system as follows:
- Interest-free unsecured loans
- Improved loan conditions by allowing recurring debts to be refinanced as interest-free loans.
- Deferment of payments of national taxes and social security premiums without collateral and penalties (amounting to ¥26 trillion)
Keep in mind that payments from the packages will differ depending on whether the business is insured by employment insurance.
Who’s eligible: SMEs whose sales have decreased by more than half compared to the previous year due to the coronavirus.
How to apply: Contact SMEs Business Counseling Service: 0570-783183 (Japanese) or fill out these application forms for employment subsidies request (Japanese).
Subsidies for office space rental fee
Businesses whose sales have been affected due to COVID-19 pandemic and who rent out office space could be eligible for a special office space rental fee subsidy (特別家賃支援給付金.）
Who’s eligible: Businesses whose sales amount in May to December 2020 decreases by 50 percent or more compared to same month of 2019, or if the sales amount in three consecutive months in 2020 decreases by 30 percent or more compared to same months of 2019.
How to apply: Applications are accepted from 14 July, 2020 to 15 Jan., 2021. Full details here.
COVID-19 School Closure Subsidy
Employers granting paid leave to employees caring for children attending elementary schools that are temporarily closed (or children who have or may have COVID-19) will receive financial assistance of ¥8,330 per person per day.
Who’s eligible: Companies whose employees are parents or guardians of minors, including foster parents (those who have custody over the minor) and those who are temporarily caring for them, and are granting paid leave due to elementary school closures caused by the coronavirus.
— Tokyo Gov (@Tokyo_gov) April 20, 2020
Support from the TMG
The Tokyo Metropolitan Government (TMG) has rolled out various loans and incentives for SMEs affected by the coronavirus outbreak and subsequent stay-at-home orders.
Emergency loans for small to medium-sized companies
The loan limit is ¥280 million (unsecured for up to ¥80 million) and the TMG will subsidize the credit guarantee fees (if principal is not paid back within one year, the government will only subsidize two thirds of the fee).
The financing term is up to ten years with interest rates between 1.7 and 2.2 percent, depending on the financing term, and 1.5 to 2 percent for companies outside the scope of the shared burden system (責任共有制度).
Who’s eligible: SMEs with at least a 5 percent drop in revenue over the last three months due to the coronavirus (or in the coming three months) compared to last year. Companies must also have a guaranteed loan from the Credit Guarantee Association of Tokyo (東京信用保証協会) and submit a business plan to ensure stability in the future.
Subsidies for suspended business during the state of emergency
Businesses that suspend operations during the state of emergency (April 16 to May 6) in cooperation with Tokyo Governor Koike Yuriko’s requests will receive ¥500,000 (or ¥1 million if a company owns more than two shops).
Who’s eligible: Businesses and facilities that have closed according to the TMG’s requests, including schools, shops and entertainment facilities. Check TMG’s full list here (Japanese). Essential businesses such as supermarkets are not eligible.
Businesses must have been operating before April 10 and must have closed or shortened operating hours from at least April 16 until May 6.
How to apply: Apply online here (the portal is currently in Japanese only). The application deadline is July 15.
Subsidies for teleworking expenses
The TMG is offering up to ¥2.5 million in financial aid to SMEs and other companies based in Tokyo who have shifted to teleworking to prevent further spread of the virus. The subsidy will help cover the cost of softwares and other equipment necessary for telecommuting.
Who is eligible: SMEs with headquarters in Japan who have more than one employee but less than 1,000 employees total. Staff must be employed for more than six months, and the company must have no outstanding tax payment. Full list of requirements here (Japanese).
How to apply: Follow the steps in this checklist and fill out the forms in the application section (申請様式) of this page. Applications are accepted by post only. The deadline is May 12.
In addition to these programs, the Tokyo Metropolitan Small and Medium Enterprise Support Center is offering free consultations by experts on cash flow and business management. Companies can have up to four free consultations.
Call 03-3251-7881 or check this page for more information. Keep in mind that advice may only be available in Japanese.
Due to the increasing cases of domestic violence in households due to the coronavirus situation, DV Soudan+ is offering a hotline service (available in 10 languages from May 1) as well as other forms of support such as professional counseling.