Updates on COVID-19 in Japan: New Subsidies Available for SMEs including Subsidiaries of Non-Japanese Companies

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On April 30, 2020, Japan's Diet passed a 25.69 trillion yen (US$ 240-billion) supplemental budget for fiscal year 2020 to finance an emergency package aimed at aiding the economy and people hit hard by the novel coronavirus pandemic. Among the measures announced, as we reported in our earlier client alert here, the Japanese government will provide subsidies of up to 2 million yen to all companies that: (i) have paid-in-capital (shihonkin) of less than 1 billion yen, (ii) generated revenue in 2019 and (iii) meet other requirements, if such companies’ operating revenue in any given month falls more than 50% compared to the same month of the preceding year. Japanese subsidiaries of international companies can apply for this subsidy if they meet the requirements above. Companies can apply online through a special website at https://www.jizokuka-kyufu.jp/, but the information and application materials are available only in Japanese. Further, the government has set aside special subsidies worth 1 trillion yen to local governments to enable them to financially support companies that comply with authorities' requests to suspend operations under the state of emergency. In fact, among the local municipalities, Tokyo has led with its own program to provide subsidies of up to 500,000 yen to those companies. Companies can apply for Tokyo’s program online through their website at https://www.tokyo-kyugyo.com/.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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