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Overview of Innovative Technology Grant Program (Monozukuri Hojokin)

The 11th round of applications for Innovative Technology Grant Program (Monozukuri Hojokin “Mono Hojo”) started on May 26, 2022.  The deadline for applications is  August 18, 2022.  Here is an overview of Mono Hojo (Innovative Technology Grant Program).

What is Mono Hojo (Innovative Technology Grant Program)?

Mono Hojo is awarded to small and medium-sized enterprises (SMEs) and sole proprietors who make investment in facilities for innovative service development, prototype development, production process improvement and productivity improvement.

How Much Would I Receive?

The grant rate (the percentage of expense amount that will be covered) is 1/2 or 2/3. The award ceiling is from JPY 1 million to JPY 30 million.  The grant rate and the award ceiling vary depending on the number of employees and the types of the grant category for which you will apply.

For example, if a manufacturer with JPY 50 million in capital stock and 100 employees purchases a machine of JPY 30 million, they will receive a grant of JPY 12.5 million, because, for this case, the grant rate is 2/3 and the grant ceiling is JPY 12.5 million.

In What Cases Can I Use Mono Hojo (Innovative Technology Grant Program)?

For example, the following are some of the projects awarded in the past. (From the “Examples of Awarded Projects” of the website of Mono Hojo)

  • A land surveying company introduced a drone for laser surveying to improve the accuracy and efficiency of 3D measurement.
  • A geological survey company built an integrated borehole measurement system to enable the measurement of more diverse information in boreholes.
  • A dental clinic introduced a computed tomography (CT) system to improve the efficiency of dental stone removal and implant treatment.
  • A computer analysis and software development company combined computer analysis with AR/VR technology to develop software products enables virtual display.

Who is Eligible for Mono Hojo (Innovative Technology Grant Program)?

Mono Hojo (Innovative Technology Grant Program) is available to small and medium-sized enterprises (SMEs) with headquarters in Japan and sole proprietors with a place of business in Japan.

 

Criteria for determining whether or not a corporation or sole proprietor falls under the category of SME varies depending on the industry.  For a manufacturer, the threshold is the capital stock of JPY 300 million or the number of employees of 300.  For a service provider, the threshold is the capital stock of JPY 50 million or the number of employees of 100.

Please note that a corporation more than 50% owned by a large corporation or had taxable income of JPY1.5 billion or more in average in recent three years is not eligible for Business Restructuring Grant Program.

Please also note that, even though a company exceeds the threshold of SME, such a company is still eligible for Mono Hojo if its capital stock is less than JPY 1 billion and the number of employees is below a certain number.

What’s the Timeline of Mono Hojo (Innovative Technology Grant Program)?

Your application for the grant and business plan of your project will be reviewed by the grant operation office, and the awarded projects are announced one or two months after the deadline of application.  After that you have to complete the project within approximately one year and submit the implementation report to the grant operation office.  At that time evidence documents such as quotes, invoices and receipts relevant to the project are required to be submitted together.  The grant operation office will check those evidence and will grant money only for those expenses that are approved to be necessary for the project.  Therefore, even if the project that you applied has win the grant, it does not mean that you will receive the full amount written on the application.  Furthermore, you have to submit the project status report every year for 5 years.

As written above, you will receive the grant money only after the project has been completed.  Therefore, you have to pay the expenses with your own money or loan.  You can, however, get funded by a bank immediately after you have passed the review, which is called PO Finance.  We can also advise on financing.

The passing rate of Mono Hojo (Innovative Technology Grant Program) for the 9th round was approximately 62%.

We assist to apply for Mono Hojo (Innovative Technology Grant Program).  Please feel free to contact us. (We provide this service in English only to corporate clients.)

Author: Eri Mizukami, CPA

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