With Japan on the path to becoming the number one hub for start-ups, it is the perfect location for foreign and local entrepreneurs. The country has a diverse economic landscape, with various cities offering unique advantages for different industries. Whether you’re interested in technology, manufacturing, or renewable energy, Japan has a city that can complement your business. In this article, we dive into the best cities to incorporate in Japan, that provide exceptional support and opportunities for startups, helping you choose the ideal location for your entrepreneurial journey.
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Tokyo: Prime City for all Startups in Japan
Tokyo:
Tokyo is a global financial hub and a prime location for startups. It has the most developed ecosystem in the country that supports innovation and growth, making it an attractive destination for entrepreneurs. It was ranked the 14th best startup hub globally in 2023. There are over 9,000 startup companies in the metropolitan area of Tokyo. Making up about 70% of the country’s total number of start-ups.
Tokyo has a highly varied ecosystem of startups across technology, e-commerce, fintech, healthcare, and AI sectors. This rich landscape is strengthened by extensive networks, events, and collaborative workspaces to nurture creativity and partnership. The Tokyo Metropolitan Government has established the “Special Zone for Asian Headquarters” to attract foreign entrepreneurs and investors. Through the Startup Visa initiative, foreign entrepreneurs can obtain a business manager visa with relaxed requirements, including a 6-month preparation period before the formal application.
The Tokyo Metropolitan Government has established the “Special Zone for Asian Headquarters” to attract foreign entrepreneurs and investors. Through the Startup Visa initiative, foreign entrepreneurs can obtain a business manager visa with relaxed requirements, including a 6-month preparation period before the formal application.
To qualify, entrepreneurs must :
Submit a business plan, proof of funding, and evidence of office space to the Tokyo One-Stop Business Establishment Center (TOSBEC). TOSBEC provides consultation services to guide entrepreneurs through the application process, offering assistance with documentation and legal requirements. This initiative aims to support innovative startups, particularly in technology, life sciences, and other high-growth sectors.
The Tokyo Metropolitan Government supports foreign entrepreneurs with comprehensive services, including company registration, visa applications, and tax procedures. Various subsidies and grants, such as the “Tokyo Strategic Innovation Promotion Business” and the “Foreign Patent Application Fee subsidy,” are available to encourage business establishment and international expansion. Additional resources are provided through companies like the “Tokyo One-Stop Business Establishment Center” and “Japan External Trade Organization” (JETRO) to provide essential resources for startups looking to scale. Read more on active subsidies provided in Tokyo.
When registering their businesses through TOSBEC, foreign entrepreneurs benefit from streamlined processes and multilingual support. The center also assists with regulatory compliance and tax registration, offering incentives such as corporate tax reductions and R&D tax credits to lower taxable income. Small businesses may also qualify for exemptions from Japan’s 10% consumption tax based on annual sales thresholds. By leveraging these vital support structures and programs, entrepreneurs can establish and grow their businesses in Tokyo’s vibrant startup ecosystem.
Shinjuku:
Shinjuku City is increasingly recognized as a hub for startups and entrepreneurial activity. Shinjuku also has the busiest train station the the world with around 3.6 million passengers a day. This leads to lots of businesses in this area thriving due to the absurd amount of foot traffic concentrated in one city.
Shinjuku offers an array of incentives and support programs for startups and businesses. The Startup Visa Program eases the immigration process for foreign entrepreneurs. Financial subsidies and grants are available, including urgent funds for businesses affected by the pandemic and support for technology and business innovation. Sector-specific initiatives such as the Loan Program for Supporting Start-ups, the Utilization of Vacant Storefronts in Shopping Streets, and the Technology and Business Innovation Loan Program provide low-interest loans and subsidies for interest and guarantee fees. Tax incentives and institutional financing are available, offering low-interest loans to small and medium-sized enterprises (SMEs). The Takadanobaba Business Incubation Support Center offers office space, consulting, and information dissemination for new and aspiring businesses. To access these programs, businesses must meet specific criteria and complete a series of interviews and applications through the Industry Promotion Division.
Shibuya:
Shibuya is gaining recognition as a hub for startups and innovation. The district’s youthful demographic and trendsetting atmosphere create an ideal environment for entrepreneurial startups. Some well known companies that share and add to this atmosphere are Tokyu Corporation, Casio and Niwango. Located at the heart of Tokyo’s transportation network, Shibuya enjoys excellent connectivity, making it accessible to commuters and visitors alike. This accessibility translates into significant foot traffic and consumer engagement, which fuels the growth of local businesses and startups in the area.
The Shibuya City government, has launched several projects to support foreign entrepreneurs. These include the Shibuya Startup Support for international business starters, the Shibuya Startup Deck consortium to promote and support new businesses, and the Shibuya Startup University for entrepreneurship education. Other initiatives like Blackbox, a media outlet reporting on Japan’s startup scene, and the Shibuya Co-Creation Hub, which provides workspaces from repurposed city spaces, further bolster the ecosystem. Additionally, the government has introduced a special visa to facilitate business startups for foreigners.
The Shibuya City Office in Tokyo offers a “Startup Visa” for foreign entrepreneurs aiming to establish scalable businesses in Shibuya. This visa, valid for up to one year, supports necessary administrative procedures and targets businesses in the health, environmental, food, information, culture, and fashion sectors. Eligible startups must introduce innovative products, be scalable, show exponential growth potential, have domestic and global growth plans, and possess an exit strategy. The application process involves contacting the Shibuya City Office, submitting required documents, passing a document screening and interview, and obtaining approval from Immigration. Benefits include administrative support, access to co-working spaces, local partnerships, and integration into Shibuya’s startup ecosystem. While offering significant support and opportunities, the visa requires meeting stringent criteria and undergoing a thorough approval process. Learn more on startups in Shibuya
Osaka : The Business and Commercial Hub
Osaka is known for its rich cultural history and commercial districts, increasingly becoming a hotspot for startups and entrepreneurial ventures. The city is the third largest in all of Japan and home to many tech companies like Sharp and Sansei Tech. It also excels in industries such as manufacturing, healthcare, biotechnology, and commerce. Osaka has the second largest amount of start-ups in Japan behind Tokyo. The city’s strong support ecosystem, including government initiatives and business incubators, plays a crucial role in nurturing entrepreneurial endeavors. Below you will find the support programs Osaka is offering to aspiring entrepreneurs and founders within and without Japan.
The Osaka Innovation Hub
Osaka stands out as a supportive environment for startups, anchored by institutions like the Osaka Innovation Hub (OIH) and the Osaka Business and Investment Support Center (O-BISC).
OIH offers incubation services, co-working spaces, and funding access,. O-BISC provides essential guidance on business setup and regulatory compliance, complemented by networking opportunities to link startups with industry experts and potential partners.
The Osaka Chamber of Commerce and Industry
The Osaka Chamber of Commerce and Industry (OCCI) supports startups through advocacy and business development programs. With additional backing from local government initiatives and Startup Osaka’s community-driven efforts, Osaka provides fertile ground for entrepreneurial endeavors, fostering growth and innovation in its business community.
Kyoto: Innovation in a Historic Setting
Kyoto is known for its important historical presence in Japan. It was the formal Capital of Japan until 1868. It is also home to many innovations and modern business practices such as tourism, traditional crafts, technology, and education. The city’s unique market opportunities attract diverse business leaders.
Kyoto has a very simple process to get a Visa and they are very welcoming to Start up companies looking to start or expand into japan. Kyoto introduced the Startup Visa in April 2020 to attract foreign entrepreneurs, enabling them to reside in Japan for up to a year to prepare for launching their businesses. This initiative, backed by JETRO Kyoto in partnership with Kyoto Prefecture and the City of Kyoto, provides extensive support. Foreign entrepreneurs can receive guidance from certified legal specialists on administrative procedures, consult international lawyers on financing and legal issues, receive assistance in establishing their offices, and receive introductions to local banks for account opening. Visa applications are accepted in Japanese or English, catering to diverse entrepreneurial needs. Kyoto’s proactive approach includes experienced concierges from Silicon Valley who offer expert advice in both languages, ensuring a seamless transition into Japan’s dynamic business environment.
Kyoto Prefecture offers a range of subsidies and support programs aimed at attracting companies, particularly in manufacturing and information-related industries. Businesses establishing a base in Kyoto can benefit from subsidies such as a 10% rebate on invested capital in fixed assets (excluding land), with varying rates for establishments within Kyoto City. Additionally, employment subsidies ranging from 100,000 yen to 500,000 yen are available based on business location and full-time employee numbers. Tax incentives include reductions in real estate acquisition tax by up to 50% for enterprises creating jobs in designated manufacturing clusters. Startup support includes expert guidance on startup visa applications, sector-specific market strategies, and access to free co-working spaces like STC3 and shared offices throughout Kyoto Prefecture. Targeted industries include AI, IoT, environmental technology, life sciences, cultural industries, agriculture, tourism (excluding certain retail sectors), and other sectors approved by the Kyoto Prefectural Governor. These initiatives aim to enhance Kyoto’s global economic presence by fostering innovation, employment growth, and regional economic development.
Fukuoka: The Thriving Innovation Hub
Fukuoka City is known for its innovative sectors such as fintech, health tech, and logistics, making it an ideal environment for startups to thrive. The city’s Startup Visa program ensures entrepreneurs can quickly establish their businesses with streamlined visa processes and access to a dynamic market. Fukuoka’s strategic location allowing it to have easy access to overseas and low business costs creates an ideal setting for fostering innovation and rapid business growth within Japan.
Fukuoka City’s Startup Visa program supports foreign entrepreneurs establishing businesses locally. Applicants must submit a new business implementation plan for evaluation by the city, which assesses its potential to meet Business Manager Visa requirements within a year. Successful applicants receive a New Business Implementation Confirmation Certificate to apply for a Designated Activities Visa at the Fukuoka Immigration Services Agency. Renewal requires submitting a plan update before the initial visa’s six-month expiry. Eligible sectors include fintech, health tech, green energy, logistics, and trade, aiming to boost competitiveness and employment in Fukuoka.
Fukuoka City provides extensive support for entrepreneurs looking to establish or expand businesses. This includes the Startup Fund, offering loans up to 25,000,000 Yen at a favorable interest rate of 1.3%, and the Step Up Subsidy for winners of business plan contests, ranging from 100,000 Yen to 1,000,000 Yen. Additional subsidies are available based on employee count and office expenses. Networking opportunities with venture capitalists are facilitated through business meetings and Fukuoka Startup Selection events. Tax incentives, such as a 20% reduction in taxable income for innovative businesses in designated zones, are also available. The Startup Cafe offers free consultations with experts in venture capital, legal matters, and government financial institutions, assisting with business planning and regulatory compliance. Financial aid covering up to 50% of rental costs for residential and office spaces, along with priority access to incubation facilities, further supports startup ventures in Fukuoka City. Listen to more on Fukuoka startups
Nagoya: A Strategic Location for Business
Japan’s fourth-largest city, Nagoya, emerges a strong industrial hub with an emerging startup ecosystem, positioning it as an enticing atmosphere for entrepreneurs. Globally recognized for its manufacturing expertise, especially in automotive and aerospace sectors dominated by industry leaders like Toyota. Nagoya provides a great place for startups specializing in advanced manufacturing, robotics, and cutting-edge technologies. Respected institutions such as Nagoya University and Nagoya Institute of Technology, play pivotal roles in fostering innovation and nurturing talent essential for the city’s evolving startup community.
Nagoya, within Aichi Prefecture, offers diverse startup visa programs designed to attract foreign entrepreneurs and international graduates from Japanese universities. These include the National Strategic Special Zone Program, Foreign Entrepreneurship Promotion Program, and Program for International Students, each tailored to different eligibility criteria and business types. Visa options range from Business Manager to Designated Activities, allowing for flexible stays of up to 2 years, with support extended by SME management consultants and university staff. Benefits include income deductions, interest subsidies, and access to registered coworking spaces, all geared towards fostering innovation and facilitating business growth in Nagoya’s dynamic entrepreneurial landscape.
Nagoya has strong government backing through substantial subsidies designed to support businesses established within the last five years and headquartered in the city. These subsidies can cover up to one-third of eligible costs, with a maximum limit of 1 million JPY. Nagoya City aims to nurture its startup ecosystem by providing financial incentives and comprehensive support programs, ensuring new businesses can thrive and innovate in a competitive market environment. Additionally, leveraging these government resources and access to grants can help facilitate a smooth and successful startup here.
Final Verdict
Japan invites entrepreneurs with a variety of cities, each offering unique advantages for startups across different industries. Tokyo stands out as a global financial hub, bustling with innovation in technology, e-commerce, fintech, healthcare, and AI. Its vibrant startup scene, supported by extensive networks and collaborative spaces, provides fertile ground for creative minds and ambitious ventures looking to thrive in a bustling urban environment.
Shinjuku’s lively nightlife and constant flow of people create a vibrant atmosphere ideal for retail and service startups. Meanwhile, Shibuya’s youthful energy and excellent transportation links make it a magnet for tech startups aiming to tap into Tokyo’s vast market. Both districts benefit from Tokyo’s Startup Visa program and financial incentives, ensuring a supportive environment for startups to launch and grow.
Osaka, steeped in rich cultural heritage, shines as a commercial hub with a strong industrial base in manufacturing, healthcare, and biotechnology. Here, startups receive valuable support from incubators like the Osaka Innovation Hub and networking opportunities facilitated by local business chambers—a welcoming ecosystem for entrepreneurs seeking strategic growth opportunities.
Kyoto’s blend of ancient traditions and modern innovation appeals to startups in tourism, traditional crafts, technology, and education. Its straightforward Startup Visa process and generous subsidies attract international talent, complemented by initiatives like JETRO Kyoto, making it an ideal destination for businesses aiming to innovate while respecting Japan’s cultural legacy.
Fukuoka emerges as a rising star in Japan’s startup landscape, particularly in fintech, health tech, and logistics. Entrepreneurs benefit from streamlined visa procedures, low-interest loans, and strategic incentives designed to accelerate business growth within a collaborative community. Its strategic location and supportive ecosystem make Fukuoka an attractive destination for startups looking to establish a presence in Japan and beyond.
Nagoya, renowned for its industrial expertise in automotive and aerospace sectors, offers substantial government support and specialized visa programs aimed at attracting global talent. Startups specializing in advanced manufacturing, robotics, and cutting-edge technologies find a conducive environment supported by prestigious institutions and incentives aimed at accelerating business development.
Each city in Japan offers a unique ecosystem tailored to different business needs and aspirations. Whether you’re drawn to Tokyo’s fast-paced innovation, Osaka’s commercial vibrancy, Kyoto’s cultural charm, Fukuoka’s emerging tech scene, or Nagoya’s industrial prowess, exploring these diverse options empowers entrepreneurs to find their ideal launchpad for success in Japan’s dynamic startup landscape.
