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What is a manufacturing subsidy? Introducing application methods and benefits

manufacturing subsidy
manufacturing subsidy

There is a reasonable cost to install the equipment and technology required for system and software development.
Often, you have plans or ideas for a new business, but you can’t afford it and you have to give up.
If you are a person in charge of a company who is having trouble with development costs and outsourcing costs, why not consider using a “manufacturing subsidy”?
This time, we will introduce in detail the outline and benefits of manufacturing subsidies and how to apply them.

 

table of contents

  • 1. What is a manufacturing subsidy?
  • 2. Benefits of receiving support from manufacturing subsidies
  • 3. How can I get a manufacturing subsidy?
  • 4. Transition to 100% electronic application from 2020
  • 5. What is the application period and deadline for manufacturing subsidies?
  • 6. Examples of using manufacturing subsidies
  • 7. You can also apply for system development!

What is a manufacturing subsidy?

Manufacturing subsidy (monozukuri subsidy) is a subsidy system for small and medium-sized enterprises and small businesses. The official name is “Manufacturing / Commercial / Service Productivity Improvement Promotion Subsidy”. Since the purpose is to support capital investment such as purchasing machinery and equipment to provide new products and services and system development, the subsidies are mainly for capital investment costs (mechanical equipment costs).

What is a manufacturing subsidy?
Classification Overview Subsidy amount
General type Supporting investment in equipment and systems necessary for “development of innovative products and services” or “improvement of production processes and service provision methods” by small and medium-sized enterprises 1 million yen to
10 million yen
global
expansion type
Supporting SMEs to invest in equipment and systems necessary for “development of innovative products and services” or “improvement of production processes and service provision methods” to expand and strengthen overseas businesses. 10 million yen to
30 million yen

 

The outline of the system and the number of subsidy areas above. In short, it can be recognized as a system in which subsidies are provided for the equipment and systems necessary for manufacturing. In addition to the general type and the global expansion type, there is also a “business model construction type” that assists in the planning of business plans, but open recruitment is not currently being conducted. Personnel expenses and sales promotion expenses are not covered, but from 2021, a “low infection risk type business frame” will be set up in the general type, and there are cases where advertising and sales promotion expenses are covered. I have.

 

Benefits of receiving support from manufacturing subsidies

● Can be used regardless of industry

Subsidies, unlike loans, have the advantage of not being obliged to repay. So to speak, it may be said that “no repayment is required and a maximum of 10 million yen can be subsidized.” Most small and medium-sized enterprises and small businesses are eligible for manufacturing subsidies, regardless of the type of business.

 

● Higher than regular subsidies

The merit of the manufacturing subsidy is that the target company can receive subsidies of up to 10 million yen. The cost of capital investment is 2/1, and 2/3 is subsidized for small businesses.

Since subsidies are treated as miscellaneous income, they are subject to corporate tax. Also, since the subsidy is postpaid, you need to pay the full amount of the capital investment once. For this reason, it is not good to rely too much on the fact that it has been adopted as a subsidy, but there is no doubt that it is an attractive subsidy system compared to other support and subsidies.

 

● Aggressive capital investment with an eye on the future is possible

Even if you want to make a capital investment, you tend to hesitate when you consider the risk of failure after introduction. If subsidies are available, it is a great advantage to be able to actively consider the introduction of large-scale equipment.

In addition, it is essential to submit a detailed business plan when applying for a manufacturing subsidy. From this point, it leads to an opportunity to think deeply about “what is important to the company,” “what is the problem that the company should solve at an early stage,” and “what kind of results will the capital investment bring?” It can also be said that it is a merit that the really necessary capital investment will be realized after solidifying.

It may not be adopted, but there is no doubt that it will be an opportunity to find out the issues of your company, evaluate the future numerically, and think about a concrete improvement/solution process.

 

How can I get a manufacturing subsidy?

The open call for participants is held every year, but the application period for the manufacturing subsidy system is limited. It is necessary to check the open recruitment start guide of the Small and Medium Business Administration and apply for the application within the application period.

The application procedure and open recruitment procedure are posted on the official website operated by the Manufacturing Subsidy Secretariat (National Federation of Small Business Associations). First, read the application guidelines carefully and keep in mind the application requirements and procedures.

Reference: Open call for participants | Manufacturing subsidy comprehensive site

 

● Documents required to apply for manufacturing subsidies

Documents required for the application can be applied by directly entering them into the electronic application system. Specifically, the following four are required.

Documents required for manufacturing subsidies
document Overview
Business plan This is a plan that describes specific details of efforts, prospects, numerical targets, etc.
(Free-format, about 10 pages in A4)
Statement of wage increase plan It is a document that specifies the latest minimum wage and total salary payment and
shows that the employee has agreed to a plan to raise it.
Financial statements, etc. Balance sheet/income statement for the last two years.
Other documents required for adding points Documents to be submitted voluntarily.
Growth potential addition: Management innovation plan approval
Policy addition: Notification of opening of business or certificate of all history items
Additional points for disasters, etc .: Certificate of the business continuity enhancement plan
Wage increase points: Notification of applicable business establishment

 

Manufacturing subsidies are popular because they are expensive, and the adoption rate is said to be 30-40%. The reason for the low acceptance rate is that it is essential to submit a business plan at the time of application. In other words, it is necessary to understand the current situation of the company, present problems, and solutions, and describe in detail the prospects of capital investment.

It is said that it is difficult to adopt a plan unless it is a plan centered on a vision that is innovative enough to serve as a model for other companies after presenting an objective calculation basis. Conversely, a clear and innovative plan with a clear vision will have higher expectations for adoption.

 

Transition to 100% electronic application from 2020

The manufacturing subsidy system has made 100% electronic applications from 2020. Since we have moved to the electronic application, we need to obtain a G Biz ID Prime account in advance to apply.

The G Biz ID is an account required to log in to major administrative services such as e-Gov and grants and is an indispensable application for future manufacturing subsidies. If you do not have a G Biz ID, we recommend that you complete the issuance procedure as soon as possible. Please refer to the following official site for an overview of G Biz and how to apply.

Reference: G Biz ID | Home

Since the manufacturing subsidy is a popular system with a high upper limit, it is expected that access will be concentrated near the application deadline and it will be difficult to connect to the site. If you apply at the last minute, you may not be able to meet the deadline, so it is a good idea to complete your application early. In 2021, the demand for electronic applications is particularly increasing due to the effects of the new coronavirus infectious disease, and inquiries and applications are concentrated on the “G Biz ID,” which is indispensable for electronic applications.

Therefore, it is safe to assume that it will take at least 3 weeks to issue the ID and to complete the issuance of the G Biz ID as soon as possible.

For the electronic application of manufacturing subsidies, the “Electronic Application System Operation Manual” is posted on the official website. The manual is updated every time the public offering is repeated, so please read the manual as well.

Reference: Electronic application | Manufacturing subsidy comprehensive site

 

What are the application period and deadline for manufacturing subsidies?

The application deadline is set 2-3 months after the public offering for both “general type / global expansion type” and “business model construction type”. Since the application start date is often set around one month from the deadline, it is wise to proceed with preparations from the start of the open call for participants. According to the “general type / global expansion type” open call for participants (6th deadline), it is announced that the manufacturing subsidy will be open to the public throughout the year and a deadline will be set every 3 months.

Reference: Schedule | Monozukuri Subsidy Comprehensive Site

After the application, the examination will take about one and a half to two months, and if it is adopted, the result will be notified by e-mail. You will also be able to check the adoption results on the official website of the manufacturing subsidy. Please refer to the official website for regulations and guidance regarding the items and procedures to be prepared from the time of adoption until the completion of the subsidy project.

Reference: Guidance of subsidy business | Manufacturing subsidy comprehensive site

 

● Delivery application/delivery decision

Once adopted, we will finally proceed to the grant application. Since the grant application is carried out by “grants” which is one of the administrative services, G Biz ID is required here as well. It takes about one month from the grant application to the decision. Even if you place an order, contract, payment, etc. for equipment before the delivery decision is made, it will not be covered, so be sure to confirm the delivery decision before proceeding with the contract/order.

 

● Implementation of subsidy projects

Upon receiving the notification of the grant decision, we will proceed with the contract and ordering of equipment and equipment, and carry out the subsidy project. The implementation period of the subsidy project is up to 10 months after the grant decision. In other words, it is a requirement to complete the capital investment procedure and submit a performance report within 10 months of the grant decision to receive the subsidy. If you do not complete it within 10 months, you will not be able to receive the subsidy.

 

● Requesting and receiving subsidies

After submitting the performance report and confirming the subsidy amount, you can receive the subsidy. However, the business operator who received the subsidy is required to report the intellectual property rights, etc. and the commercialization status reports every April for 5 years after the end of the subsidy project.

 

Examples of using manufacturing subsidies

There are also cases of receiving subsidies for manufacturing in system development.

For example, Kobayashi Precision Industry Co., Ltd. used a manufacturing subsidy to build a system that “visualizes” the operating status of machinery and equipment in the factory. After introducing the equipment, the company developed an engine exclusively for drones. Originally, the drone was electric, but it could not be air-cooled because it stayed in the same place and flew, and it was said that the cruising time was limited to 8 to 15 minutes. By developing an engine exclusively for drones, we succeeded in developing a drone that can stay in the air for a long time and sold it.

Reference: Developed the world’s first dedicated drone engine and promoted efficiency by visualizing the operating status of factories

 

You can also apply for system development!

This time, we introduced in detail the outline, merits, and application examples of manufacturing subsidies.

The manufacturing subsidy also covers system development. “Mechanical equipment / system construction costs” are listed as expenses that can be subsidized for general type / global expansion type, and it is clearly stated that subsidizing expenses are required for purchasing / constructing and borrowing dedicated software and information systems.

Reference: Open call for participants [general type / global expansion type] (6th deadline) Summary version | Monozukuri subsidy comprehensive site

The point to keep in mind when using “manufacturing subsidies” in system development is that “innovative services” are emphasized as examination items. This is emphasized in the “technical aspect”, which is one of the examination items and points to be added, and new products/services or diversion of existing technology/discovery of hidden value are required. In addition, there is also an item “Do you have the system and technical ability to implement the subsidy project?”, So instead of simply requesting development, a system that creates some synergistic effect with our technology. Development is required.

If simply purchasing the system is sufficient, considering an IT introduction subsidy is one of the means, but if you can expect to achieve the application requirements, please apply for a manufacturing subsidy. recommend.

However, whether or not full-scratch system development proceeds on schedule often depends on the development company that requests it. Therefore, when selecting a development company, it is important to carefully select a company that meets your needs. In ordering navigation, a concierge who is familiar with the IT industry will listen to the conditions required by your company and help you select the most suitable outsourcing. We accept consultations and introductions free of charge, so please feel free to contact us first.

If you ever want to know about similar things, check out the Facebook page Maga Techs

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