Where we work · Japan
Japan asks the company to do the paperwork so its investors get the relief.
The main deep tech grant covers two thirds of a project and wants a corporate partner committed before it will look at you. The two tax measures that shape a Japanese seed round belong to the investors, and in both cases the company is the party that has to file. We work with Japanese founders remotely from Hyderabad, in English. We have no office and no entity in Japan, and we say so plainly.
The subsidy rate is the one that decides the plan.
Up to two thirds
The subsidy rate across the deep tech fund’s research phases. The company finds the rest, so an award is a fraction of a budget it must already be able to raise. NEDO, DTSU 2026 call notice (Japanese), 26 Jun 2026
JPY 300m or 500m
The subsidy at the seed-stage research phase, over roughly eighteen months to two years, with four years the maximum inside one phase. NEDO, DTSU 2026 call notice (Japanese), 26 Jun 2026
JPY 3 billion, 6 years
The ceiling on one project across every phase, including anything reached through stage-gate review. NEDO, DTSU 2026 call notice (Japanese), 26 Jun 2026
119 projects
Awarded under the deep tech fund through its ninth round, about JPY 68.46 billion in total, as at June 2026. The green-transformation sibling had 19 projects and about JPY 10.06 billion. NEDO, DTSU 2026 call notice (Japanese), 26 Jun 2026
25%, or 20%
The deduction from income for a domestic company or its investment arm taking newly issued shares in a startup; 20% where a minority holding is expected to reach a voting majority within three years. METI, open innovation incentive (Japanese), 28 Jul 2026
Exempt to JPY 2bn
The pre-seed and seed special rule under the angel tax system. Above that ceiling the gain is deferred rather than exempted, and the ministry states the difference explicitly. METI, angel tax measures (Japanese), 12 Jun 2026
Four of these describe money the company can receive and two describe money other people put in — and it is the second pair that creates most of the work. Both of those reliefs belong to the investor and are claimed through the company, which is why a Japanese founder’s administrative year looks unlike an Australian or Singaporean one.
A partner has to commit before the money does.
The deep tech fund is run by the national research and development agency NEDO, and its current parameters are published in Japanese. We read them there.
- Three phases, and you choose the one you are in. Seed-stage research, later-stage commercialisation, and mass-production demonstration, at up to JPY 500 million, JPY 1 billion and JPY 2.5 billion respectively for a project period. Any phase can be applied to directly, and stage-gate review moves a project on. NEDO, DTSU 2026 call notice (Japanese), 26 Jun 2026
- A letter of intent from an operating company, at application. Both research phases expect a letter of intent covering joint research, procurement or sales-channel development; the mass-production phase expects a memorandum of understanding. This is the same shape of test as the committed pilot customer on our Norway page, and it cannot be assembled in the weeks before a deadline. NEDO, DTSU 2026 call notice (Japanese), 26 Jun 2026
- The window may close early, and the agency says so. Future rounds may end sooner than the policy’s stated horizon depending on how much has been awarded, and the tenth round was deferred to late July 2026 while national startup policy was being settled. A plan that assumes a round will be open is assuming something nobody has promised. NEDO, DTSU 2026 call notice (Japanese), 26 Jun 2026
- Applications run through the national grants platform. Submission is through J-Grants, which needs a government business identity account. That is an administrative lead time, not a formality. It is also not the only one: the open innovation incentive below needs the same kind of account again. NEDO, DTSU 2026 call notice (Japanese), 26 Jun 2026
- The international track is separate, smaller, and has a country list. A co-funded international joint research route offers up to JPY 100 million per project within two thirds of cost, for an unlisted Japanese company with its main research base in Japan, under ten years old — or any age if less than five years since it first raised from a venture investor. NEDO, International Joint R&D (English), 9 Sep 2026
One limit is worth stating rather than omitting: the partner countries on that international call include Singapore, the United Kingdom, Germany, France and Switzerland, and they do not include India. A Japanese company pairing with an Indian one has no public co-funding route through that instrument.
Two filings the company owns.
Both measures are written for the investor. Both require something from the company, and a founder who learns that after the round has already lost the benefit it was priced on.
| Measure | What the investor gets | What the company has to do |
|---|---|---|
| Open innovation incentive A domestic operating company or its investment arm deducts 25% of what it paid for newly issued shares above a threshold; 20% on a minority stake expected to become a majority within three years. Extended by the 2026 reform to the end of the 2027 fiscal year. METI, open innovation incentive (Japanese), 28 Jul 2026 | A deduction from income, certified by the Minister and attached to the corporate return. Thresholds and caps exist and this page does not state them, because the ministry’s own documents were not readable to us. | Hold its own government business identity account — both sides need one — and be a party to the application. The ministry warns the account takes about a week even when nothing is wrong with the papers. METI, open innovation incentive (Japanese), 28 Jul 2026 |
| Angel tax system An individual deducts the investment, less a nominal amount, from total income; or deducts the whole of it from share-disposal gains with no ceiling. Under the pre-seed and seed rule, exempt to JPY 2 billion and deferred above it. METI, angel tax measures (Japanese), 12 Jun 2026 | Salary relief for experts and scientists is a separate measure and is not this one. | Apply to its prefecture for confirmation that it is an eligible company and that the investment was made, receive the certificate, and send it to the investor, who files it. A certified partnership or crowdfunding route can issue the certificate instead. METI, angel tax measures (Japanese), 12 Jun 2026 |
Sources: METI, open innovation incentive (Japanese), 28 Jul 2026 · METI, angel tax measures (Japanese), 12 Jun 2026
- The angel conditions constrain the share register and the accounts at once. At least a sixth of the company must be held outside the controlling shareholder group, relaxed to a twentieth where the pre-seed conditions are also met. The company must be unlisted, must not sit inside a large-corporation group, and must meet a condition that varies with its age. METI, angel tax measures (Japanese), 12 Jun 2026
- Some of those age conditions require a loss. Depending on the limb, the company needs two or more researchers or new-business staff at a tenth of full-time headcount, or research-type spending above three or five per cent of revenue, or revenue growth above a quarter, or negative operating cash flow. A company can fail by doing well. METI, angel tax measures (Japanese), 12 Jun 2026
- Eligibility can be established before the round. An advance confirmation regime lets a company settle its status first, and the ministry publishes the names of companies that obtained it. That is a statement about tax status and nothing else, and it should be read that way. METI, angel tax measures (Japanese), 12 Jun 2026
We are not tax advisers and we do not file anything, in Japan or anywhere. What we work on is the sequence: which of these a company is trying to preserve, what that costs in how the round is built, and what has to be in train before the term sheet rather than after it.
Where Japanese seed companies get stuck.
| Problem | What it looks like | What we work on |
|---|---|---|
| The award is treated as the budget | A seed-stage subsidy is planned as the project’s funding. At two thirds, a JPY 500 million award needs JPY 250 million of the company’s own money, and the gap is discovered after the application has been written. | Building the capital plan around the matching requirement first, so the application is made when the other third is actually findable. |
| Hunting for a partner at the deadline | The letter of intent is read as a document rather than a relationship. An operating company does not sign one quickly, and the ones that do sign quickly tend not to mean it. | Treating the corporate partner as the first piece of work rather than the last: who buys, why this year, and what they would be willing to put in writing. |
| Discovering a filing after the round | Corporate money arrives and the deduction is lost because the company has no government business identity account. Or angel money arrives and nobody applied to the prefecture, so the investors get nothing they were told to expect. | Putting both administrative paths on the round timetable at the start, and naming who owns each one. |
| Reading an English summary of a Japanese rule | The current parameters of the deep tech fund are published in Japanese. Elsewhere the opposite is true. And one government page on the angel system is years out of date without saying so, contradicting the current one on both the company age limit and the cap. | Reading the source in whichever language it exists in, saying which language that was, and telling you where two official sources disagree. |
Hours, invoices and what we are not.
- Hours
- Japan is three and a half hours ahead of India all year, with no daylight saving on either side. A 10:00 Tokyo start is early morning in Hyderabad and the Tokyo afternoon is our working day, so the overlap is reliable rather than seasonal.
- Language
- We work in English. We read Japanese sources in Japanese where that is the only place a rule exists, and this page records which language each figure came from. We do not draft in Japanese and will not pretend otherwise.
- Tax
- Japan has a research and development credit against corporate tax, including an enhanced regime for smaller companies. We have not read its rates at source and do not state them; a loss-making seed company cannot use a credit against tax it does not owe in any case.
- Consumption tax
- Services bought from outside Japan can fall within a reverse-charge regime. We did not verify the scope at source, so we state no figure, and your accountant confirms the treatment.
- Data
- The Act on the Protection of Personal Information applies. We act as a data processor under a written agreement, and we will tell you where founders’ work in Founder OS is stored before you put anything in it.
- Invoices
- In JPY or USD, from our Indian company.
Grants, filings and the things we do not do.
Can you get us a corporate partner for the letter of intent?
We do not make introductions as a product and we promise no outcomes. What we do is the work underneath it: which companies have a reason to want this, what the collaboration would actually be, and what they would be willing to sign. Whether anyone signs is theirs to decide.
Which language did you read these rules in?
The deep tech fund’s current parameters in Japanese, because that is the only place they are published. The international joint research track in English, from a page the agency keeps current. The two tax measures in Japanese. Every source on this page carries its date, and the label says when the language matters.
Can you handle our grant application or our tax filings?
No. We are not a grant-writing firm and we are not tax advisers. We work on whether the project is the right shape for the instrument, and on the decisions the instrument forces. Your accountant files, and your lawyer signs.
Do you have an office in Japan?
No. We work with Japanese founders remotely from Hyderabad, in English, and there is no local entity. We would rather say that than imply a presence we do not have.
What on this page could not be verified?
The minimum investment amounts, holding period and deduction caps under the open innovation incentive. The ministry’s own documents refused our requests and its web page does not state the figures, so this page states none of them even though they circulate widely.
Figures on this page were last checked on .
Start with the other third, and the partner.
A 45-minute call with Dineshwara, scheduled in Tokyo time.