​How Foreign Startups Can Raise Funds in Japan
​

Foreign life science startups encounter substantial barriers to Japanese government grants. Domestic VC funding remains scarce for overseas firms.
This document highlights actionable grants and subsidies accessible to foreign firms.


Fundamentals of Fundraising

• Currently, it is challenging for foreign startups in the life science field to obtain grants and similar support from Japanese public institutions, especially if they do not yet have a presence in Japan. For this reason, fundraising without establishing a legal entity in Japan is in practice largely limited to funding from venture capital (VC) investors or to participation in collaboration programs and acceleration schemes. However, VC-based fundraising is also difficult because the fund sizes of Japanese VCs are generally smaller than those in Europe and the U.S., and many VCs tend to prioritize investment in domestic startups.
• Establishing a legal entity in Japan increases the possibility of applying for grants from organizations such as AMED and other public funding schemes. That said, competition remains intense, and foreign-capital companies often face additional practical hurdles compared to purely domestic companies, such as the need to build local networks and to meet Japan-specific eligibility and documentation requirements. While programs like AMED’s “Strengthening Program for Pharmaceutical Startup Ecosystem” explicitly allow Japanese subsidiaries of foreign corporations to apply, public Japanese grants still tend to be geared primarily toward nurturing startups rooted in Japan.
• Therefore, from a pure fundraising efficiency perspective, Japan is generally not the easiest location for foreign life science startups to secure large-scale capital compared to major hubs in the U.S. or Europe. A basic approach for many foreign companies is to seek core equity and grant funding in their home country or in global hubs (e.g., the U.S. or Europe), while using Japanese schemes more selectively for co-development, proof-of-concept, or market access–oriented projects.
• On the other hand, similar to other countries, there are national agencies and local governments in Japan that actively seek to attract foreign-capital companies from the perspective of investment promotion and regional economic development.

Perspective of Investment in Japan
From the perspective of investment promotion, several national and local programs support foreign companies that establish a presence in Japan or collaborate with Japanese partners. These programs can partially offset the difficulty of securing large pure cash grants by providing subsidies for establishment costs, office rent, equipment, and collaborative projects.
Below is a non-exhaustive list of representative programs that foreign life science and related startups can consider.


1. JETRO: Investment Opportunities in Japan's Regions

• Operating Organization: Japan External Trade Organization (JETRO)
• URL:
  https://www.jetro.go.jp/en/invest/region/
• Overview:
  Online tool for foreign companies to search and compare investment environments, incentives, and support measures across Japan's regions.
• Target Sectors:
  All industries, with specific focus areas varying by region (e.g., life sciences, advanced manufacturing, green tech, digital industries, etc.).

2. JETRO: Direct Investment Promotion Project Expense Subsidy

• Operating Organization: Japan External Trade Organization (JETRO)
• URL:
  https://www.jetro.go.jp/invest/support_programs/incentive/tainaitoushi_koubo.html
• Overview:
  Subsidizes collaborative projects between foreign/in-house foreign companies and Japanese firms or institutions for the introduction and verification of technologies and business models in Japan.
• Target Sectors (examples):
  • Manufacturing
  • Healthcare and life sciences
  • Green sectors and decarbonization technologies
  • Digital-related fields (e.g., mobility, Fintech, wholesale/retail, logistics)
• Applicant Requirements (examples):
  • Foreign companies, in-house foreign companies, or Japanese corporations forming collaborative projects.
  • Must have concrete projects leading to investment, business expansion, or collaboration in Japan.
  • Must establish collaboration with Japanese companies, research institutions, or other Japanese entities.
  • Foreign companies must meet certain foreign ownership ratio requirements as defined in each call.
• Subsidy Amount / Support Content (typical recent examples):
  • SMEs: Up to around one-half of eligible project expenses, with an upper limit on the order of tens of millions of yen (e.g., around 20 million yen in recent calls).
  • Large companies: Up to around one-third of eligible project expenses, with a similar upper limit.
  • Target expenses (examples): Machinery and equipment costs, outsourcing/commission costs, personnel costs, travel expenses, and advertising costs.
• Note: Exact subsidy rates and upper limits may change by fiscal year and call; applicants should always confirm the latest guidelines.

3. Osaka Prefecture: Corporate Location Promotion Subsidy (Foreign Company Entry Promotion Subsidy)

• Operating Organization: Osaka Prefecture
• URL:
  Japanese: https://www.pref.osaka.lg.jp/o110030/ritchi/treatment/hojogaiyou_gaishi.html
  Related English information (via O-BIC, Osaka Business and Investment Center):
  https://o-bic.net/e/incentive/
• Overview:
  Subsidizes part of building acquisition and/or rental costs for foreign companies establishing head office functions or equivalent business bases in Osaka Prefecture.
• Target Sectors:
  Head office functions across all sectors, including manufacturing, services, life sciences, and R&D activities.
• Applicant Requirements (examples):
  • Foreign companies newly establishing head office functions or equivalent bases in Osaka Prefecture.
  • Certain foreign ownership ratio (e.g., one-third or more foreign capital) as defined in the program guidelines.
  • Must include head office functions such as planning, R&D, or management departments.
  • Requirements for minimum floor area and regular employees (e.g., thresholds for office space and number of employees).
• Subsidy Amount / Support Content (typical examples):
  • Building acquisition: A certain percentage of eligible fixed-asset investment costs (for example, around 5% of the investment amount), with an upper limit on the order of 100 million yen.
  • Building rental: A certain percentage of rent and common service charges (for example, approximately one-third of rent for up to 24 months), with an upper limit on the order of several tens of millions of yen (e.g., up to around 60 million yen in some schemes).
• ​Note: Conditions such as exact percentages, upper limits, required floor area, and employee numbers may change; check the latest official summary guide and detailed guidelines.

4. Kanagawa Prefecture: Foreign Company Startup Support Program

• Operating Organization: Kanagawa Prefecture (Corporate Attraction and International Business Division)
• URL:
  Japanese (overview): http://www.pref.kanagawa.jp/docs/pw3/mlt/f537035/
  English support menu for non-Japanese companies:
  https://www.pref.kanagawa.jp/osirase/0612/business-location-support/en/support-menu/foreign-companies-support/
• Overview:
  Subsidizes costs for foreign companies making their first entry into Japan by establishing Japanese subsidiaries or branches in Kanagawa Prefecture. The program aims to lower initial setup costs such as incorporation procedures, visa, recruiting, and language support.
• Target Sectors (examples):
  Kanagawa emphasizes several priority fields, such as:
  • Pre-disease and preventive healthcare–related industries
  • Robotics-related industries
  • Decarbonization and green-related industries
  • Advanced medical and life science–related industries
  • IT/Electronics-related industries
  • Transportation machinery and mobility-related industries
  • Tourism and regional revitalization in designated areas
• Applicant Requirements (examples):
  • Foreign companies with a certain foreign ownership ratio (e.g., one-third or more foreign capital).
  • First entry into Japan, establishing a Japanese subsidiary or branch in Kanagawa Prefecture.
  • Belonging to one of the target sectors defined by the prefecture or contributing to regional revitalization.
• Subsidy Amount / Support Content (typical examples):
  • Subsidy rate: Typically around one-half of eligible expenses for the first establishment of a subsidiary or branch.
  • Upper limit: On the order of a few hundred thousand to a few million yen for establishment-related costs (e.g., up to around 2 million yen in recent schemes).
  • Target expenses (examples): Residence status acquisition (visa) costs, incorporation and notification costs, recruitment and advertisement costs, interpretation and translation costs, and other necessary professional services.
  • Separate rent subsidies and other incentives may also be available, such as support covering up to one-third (or, in special zones, up to one-half) of monthly office rent for a limited period.

5. AMED: Strengthening Program for Pharmaceutical Startup Ecosystem

• Operating Organization: Japan Agency for Medical Research and Development (AMED)
• URL (English overview):
  https://www.amed.go.jp/en/program/list/19/02/005.html
• Overview:
  Large-scale funding program for pharmaceutical and biotech startups developing vaccines, therapeutics, and related products to strengthen Japan's drug discovery ecosystem. The scheme combines public funding with mandatory co-investment from certified VCs.
• Target Sectors / Products (examples):
  • Infectious disease vaccines and therapeutics
  • Pharmaceuticals for non-infectious diseases
  • Regenerative medicine product
  • Medical innovation areas such as cancer, rare diseases, lifestyle-related diseases, mental and neurological disorders, and dementia
• Applicant Requirements (examples):
  • Unlisted drug discovery venture companies registered in Japan.
  • SMEs that meet small/medium enterprise criteria and are not deemed large enterprises.
  • Must have business and/or R&D bases in Japan.
  • Must receive (or have confirmed) investment from certified VCs that covers at least one-third of the total eligible project expenses.
  • Japanese subsidiaries of foreign corporations established for fundraising or commercialization in overseas markets can also be eligible, provided they meet the program’s SME and registration criteria.
    • "... thereby raising the foundation of Japan's pharmaceutical startup ecosystem. In particular, we will actively support commercialization plans in overseas markets in addition to Japan in order to achieve sufficient sales and growth."
      "Pharmaceutical startups, which are Japanese subsidiaries of foreign corporations established for fund-raising or commercialization in overseas markets, will also be eligible for support."
    • Based on these descriptions, there is no explicit restriction excluding foreign-funded companies; however, the intent appears to focus on startups and seeds originating in Japan.
• Subsidy Amount / Support Content (typical examples):
  • Total amount per project: From several billion yen up to around 10 billion yen, depending on the call and development stage.
  • Subsidy rate: AMED typically covers up to two-thirds of eligible R&D and development expenses, with the remaining one-third or more covered by certified VC investment.
  • Target expenses (examples): Personnel costs, consumables, outsourcing and commission costs, equipment and facility costs, expert fees, and travel expenses.
• ​ Note
  • While AMED does not publicly disclose detailed statistics on how many selected companies are foreign-capital, publicly available information suggests that only a small number of foreign-capital companies have been selected so far. One such example is AvenCell Japan Co., Ltd., a Japanese subsidiary of AvenCell Therapeutics, which announced that it had been awarded up to approximately 40 million U.S. dollars under the Strengthening Program for Pharmaceutical Startup Ecosystem, with Eight Roads Capital serving as one of the certified VCs.​