Cash Handout Japan 2021 for Businesses Affected by 2nd Lockdown

Cash Handout Japan 2021 for Businesses Affected by 2nd Lockdown

On February 11, 2021, the Ministry of Economy, Trade and Industry (METI) rolled out an overview of their latest government support targeting businesses affected by the second state-of-emergency order. 

This article covers the eligible businesses, the criteria for meeting eligibility, the pre-screening and application process, and what to prepare to apply for this cash handout Japan 2021 program. 

The official name of this subsidy program is: "Temporary aid for mitigating the impact of the state of emergency" (緊急事態宣言の影響緩和に係わる一時支援金 = kinkyujitaisengen no eikyokanwa nikakawaru ichijishienkin). 

The information that follows is an English summary of a notice published (Japanese PDF) by METI and an explanatory NHK News article (Japanese), both published on February 11, 2021. 

Overview of cash handout

The targets of this cash handout are (1) bars and restaurants with shortened business hours due to the state-of-emergency notice issued in 10 prefectures,* (2) those businesses negatively impacted by the shortened business hours of bars and restaurants, (3) and other businesses affected by the second state-of-emergency notice. (*Saitama, Chiba, Tokyo, Kanagawa, Gifu, Aichi, Kyoto, Osaka, Hyogo, and Fukuoka.)

For businesses who fall under any of the above conditions, further criteria to prove the negative impact of the state-of-emergency notice are as follows: 

  • Small to medium-sized businesses with sales down by 50% compared to figures from 2020 or 2019

  • Sole proprietors and freelancers with sales down by 50% compared to figures from 2020 or 2019

However, businesses in areas that are not under a state of emergency can still apply for the program so long as they can prove they were affected by the declaration and other prerequisites are fulfilled. 

The benefit amount is up to ¥600,000 for qualifying SMEs and up to ¥300,000 for qualifying sole proprietors and freelancers. 

Need help translating notices from City Office? 🤔
Get all your Japanese mail handled with Japan's #1 bilingual virtual mail service.
By signing up, you agree to our Terms of Service, Privacy Policy, and Handling of Personal Information.

What business types are eligible for this government support?

Here are examples, provided by METI, of eligible businesses and industries affected by the second soft lockdown. 

  • manufacturers of delicacies and prepared foods 

  • liquor makers 

  • businesses selling tableware and cooking utensils 

  • cleaning businesses

  • commercial supermarkets and wholesalers 

  • distribution-related businesses, such as agricultural cooperatives and fishery cooperatives

  • farming and fishing businesses that deliver foodstuffs to supermarkets and restaurants 

  • companies that offer taxis, buses, and other chauffeur services

  • hotels, ryokans, and other inns

  • souvenir shops, general (retail) stores, and apparel stores 

  • travel agencies, event businesses

  • movie theaters, karaoke facilities

  • cultural facilities, public baths

The summary from METI also makes a note of "businesses that deliver goods and services to individuals mainly through face-to-face interactions" along with businesses that provide "interpersonal services," which includes: 

  • event planners

  • entertainers

  • barbers

  • beauty salons 

  • dry cleaners 

  • laundry services

  • massage parlors

If your business is among the business types listed above, the second thing to confirm is whether the second state-of-emergency notice has adversely affected your sales. 

To be eligible for this government aid, your sales must have experienced a 50% drop during the months of January, February, or March of 2021, compared to sales in 2019 or 2020.

For example, if your sole proprietor business registered ¥500,000 in February of 2019 and your business income dropped to ¥249,000 in January 2021, you will be eligible for this cash handout. 

Spend more time enjoying Japan 🍺
...And less time struggling with your Japanese mail. Get all your Japanese mail handled and conbini bills paid with Japan's #1 bilingual virtual mail service.
By signing up, you agree to our Terms of Service, Privacy Policy, and Handling of Personal Information.

Who is not eligible?

The summary from METI also outlines ineligible businesses that will not be able to apply for the cash handout. These include the following: 

  • Bars and restaurants that are already receiving a subsidy for temporary closure (kyoryokukin

  • Businesses outside of the 10 prefectures in a state of emergency that are unaffected by the second state-of-emergency notice

  • Businesses and services that fall within the sex industry

  • Religious institutions

  • Political organizations

On page 8 of the summary PDF published by METI, a Q&A covers potential frequently asked questions. One of which gets to the heart of the matter: How will I know if my business qualifies for this governmental support?

Their answer is as follows: "Businesses raised as examples in the brief are not guaranteed to receive the benefits. Likewise, businesses that are not included in the examples may still be eligible for this program if the prerequisites are fulfilled. Businesses are asked to send in their questions through an inquiry form. While the inquiries will not be replied to individually, a new FAQ will be published addressing the questions received. Additionally, a call center is expected to be set up soon."

How much is the benefit?

The formula for calculating the benefit amount is different from the formula used for previous subsidy programs. 

The amount is calculated as follows: 3 x (the sales for one of the months from January to March of 2021) minus (the total sales of January through March of 2019 or 2020).

For example, if your business makes ¥1,000,000 from January to March of 2020. However, due to the state-of-emergency notice, your sales for February 2021 dropped to ¥200,000, then the calculation would be as follows: ¥1,000,000x - ¥600,000y = ¥400,000z

x. the total sales of January through March of 2019 or 2020

y. the sales of February 2021 x 3 

z. the benefit amount

In this scenario, if the business is a company, the full ¥400,000 will be deposited. If the business is a sole proprietor type, because the limit for sole proprietors is ¥300,000, the amount received would be ¥300,000 (example provided by Mr. Yamada Shinya, a certified financial accountant).

Pre-screening process + required documents

Hopeful applicants will be screened before the application over the following matters: (1) That their business is legitimate (2) that they correctly understand the program's parameters. A business verification agency will conduct this pre-screening through a video call, in-person interview, or phone call. 

This pre-screening step was added in response to cases where some students and company workers illegally received benefits from the Subsidy Program for Sustaining Businesses (jizokukyufukin). 

Business verification agencies will be made up of certified business innovation support agencies and other agencies and certified individuals, such as the Chamber of Commerce and Commerce and Industry Associations, tax accountants, small and medium-sized enterprise management consultants, etc.

If you already have a tax accountant or an enterprise consultant, ask them if they have been approved as a "business verification agency," as only those who have been pre-approved are permitted to help with the screening process.

During the pre-screening, the business verification agency will ask you to show the following documents: 

  1. Income tax report of 2019 and 2020

  2. Sales ledger of either of the months from January to March of 2021, showing a 50% decrease

  3. Identification documents (My Number Card or Driver's License)

  4. Articles of incorporation (for SMEs)

  5. Bankbook

Note: These are essentially the same documents you will be submitting during the final screening. 

After completing the pre-screening through a business verification agency, a business verification notification (number) will be issued, which the applicant will submit, along with the documents above, initiating the final screening process.

If you have previously applied for the Subsidy Program for Sustaining Businesses (jizokukyufukin), the most significant difference here is this pre-screening step. 

Additional information

You must complete the tax return process for your 2020 income because your kakuteishinkoku will be used as part of the documentary evidence you will be required to submit. 

While the tax return period has been extended this year to April 15, if you wish to apply and receive this benefit as soon as possible, you will need to have filed your tax return this year. 

The timeline for this governmental support is as follows: 

  • Late February: Business verification begins

  • Beginning of March: Application website opens

All the services and businesses must keep documents that prove the negative impact of the state of emergency to one’s business. For example, the following documents can serve as proof: 

  • Customer data and/or customer ledger

  • Invoice, statement of delivery, and/or receipts 

  • Bankbook and/or documents that show business dealings

  • Statistical data and/or pictures of the physical store

  • A list or catalog of products and services

  • Rental lease agreements, etc.

The guidelines provided by METI asks businesses to keep these items on hand in case further verification is needed. However, you will not be required to submit them during pre-screening or final screening. 

Note: There will be exceptions made for businesses that do not fall into the categories mentioned above. Those details will be announced at a later date. 

Additionally, in the past, updates to programs like this one typically expand and redefine the terms for which one can be eligible, so it’s possible new parameters to this program will be instituted as events unfold. 


About MailMate! 📬
Get a virtual office address and all your mail handled (we’ll even pay your bills if you want) risk-free for 30 days with our 30-day moneyback guarantee.
By signing up, you agree to our Terms of Service, Privacy Policy, and Handling of Personal Information.

Spending too long figuring out your Japanese mail?

Virtual mail + translation services start at 3800 per month. 30-day money-back guarantee.

By signing up, you agree to our Terms of Service, Privacy Policy, and Handling of Personal Information.
Mailmate mascot