2. Policy Shift: From Conservatism to Nurturing Innovation

In 2022, the Japanese government unveiled the Five-Year Startup Development Plan (スタートアップ育成5か年計画), designating 2022 as the “First Year of Startups.” The goal is to expand startup investment tenfold to ¥10 trillion by 2027, sparking a “second entrepreneurial boom” comparable to the postwar era.

• Expanding capital supply: Government-backed funds now target Deep Tech, IT, biotech, agriculture, and healthcare, with a record ¥1 trillion budget. The Japan Investment Corporation (JIC) increased allocations to digital and Deep Tech ventures; Nomura Securities launched the Sustainable Innovation Investment Scheme, focusing on environment, energy, healthcare, and education; and the Ministry of the Environment committed ¥60 billion to decarbonization and green-tech commercialization.
• Promoting open innovation: Policies encourage large corporations to collaborate with or acquire startups, creating momentum for technological adoption and business renewal. To support this, the government introduced the “Open Innovation Tax Incentive” and expanded R&D tax benefits for collaborations with startups, lowering costs and risks for cross-sector cooperation.
• Regulatory and institutional reforms: Measures include extending stock option exercise periods, simplifying equity crowdfunding rules, easing startup visa and banking investment restrictions, and promoting IFRS standards to facilitate M&A. The government has also established testbeds for Deep Tech fields, enabling startups to trial and validate technologies more efficiently.

• Prime Market: Designed for large, globally competitive companies, with a focus on strong governance and liquidity.
• Standard Market: Targeted at mid-sized firms, emphasizing stable scale and track records.
• Growth Market: Established for startups with high growth potential, allowing innovative firms to access capital markets at earlier stages under more flexible requirements.

3. Regional Hotspots: Venture Stages Beyond Tokyo

Fukuoka City has actively positioned itself as “Japan’s startup hub.” Its status as a National Strategic Special Zone grants regulatory flexibility in employment, visas, and taxation, while the municipal government has mobilized policy resources to build a startup-friendly environment aimed at igniting a “second entrepreneurial boom” since the postwar period.

Fukuoka enjoys multiple advantages. It is Japan’s fastest-growing city, with the highest population and foreign resident growth rates nationwide, as well as the largest share of young people. Despite rising population, living costs remain relatively low, providing a solid base for entrepreneurship. Its strategic location in East Asia offers direct flight connections to major hubs, facilitating global business. The city also combines talent and livability: numerous universities and research centers attract skilled professionals, while short commutes and high quality of life have earned Fukuoka the top spot as Japan’s most livable city.

To attract entrepreneurs, Fukuoka introduced the Startup Package, which includes a one-year Startup Visa, up to five years of corporate tax exemptions, and targeted support for sectors such as healthcare, IoT, and advanced IT. Financial measures include housing and office rent subsidies, low-interest loans, and startup competition grants. The city also established the Global Business Support (GBS) one-stop service to assist with visas, housing, bank accounts, and talent matching, and operates the incubation facility Fukuoka Growth Next, offering co-working space, professional advisors, and growth acceleration resources.

At the same time, Fukuoka has expanded its global networks, forging partnerships with Taiwan, Singapore, Israel, the U.S., and other regions to promote international entrepreneur exchange and business collaboration.

Overall, Fukuoka has not only created a strong hardware foundation through policies and funding, but also built a comprehensive ecosystem of soft services and global networks—making it an ideal base for entrepreneurs to establish and grow their ventures.

4. Emerging Investors and New Funds: Rising Investment Forces

Beyond government policies and local initiatives, new sources of capital and investment directions are emerging in Japan’s venture landscape.

First, the community of angel investors is steadily expanding. Many young entrepreneurs, after successfully founding or exiting businesses, are reinvesting their capital and experience into the market, becoming a new generation of backers. Concentrated in Tokyo and regional startup hubs, they are increasingly active in supporting early-stage ventures.

Second, new types of funds are on the rise. In recent years, investment vehicles focused on ESG, technological innovation, and digital transformation have gained visibility. For example, the Japan Investment Corporation (JIC) has increased allocations to funds targeting digital and new technologies, while Nomura Holdings launched the Sustainable Innovation Investment Scheme, dedicated to innovative technologies in environment, energy, healthcare, and education. These funds are channeling more capital toward startups and frontier industries.

In addition, the Japanese government itself has stepped in, with the Ministry of the Environment and other public funds investing in climate tech and green startups, further expanding funding opportunities. Taken together, these emerging forces—from angel investors to thematic funds and public initiatives—may still be smaller in scale than major banks, but they are already forming new pillars within Japan’s venture ecosystem.

5. The New Role of Professional Services: Amplifying Emerging Forces

The rise of new investment forces has also transformed the role of professional service providers. In the past, accountants, lawyers, and consultants primarily served as back-office support, handling audits or legal compliance. In the startup ecosystem, however, their importance is growing significantly:

• Connecting startups to global standards: With IFRS S1/S2, ISSB, and ESG disclosure requirements advancing, Japanese startups seeking cross-border investment must provide transparent, verifiable data. Professional advisors help design financial systems and disclosure frameworks, making startups more attractive to overseas funds.
• Designing structures and tax strategies for new funds: Cross-border investment involves complex tax planning and governance choices—such as subsidiaries, joint ventures, or holding companies. Professional services reduce legal and tax risks while improving capital efficiency.
• Enhancing credibility through ESG and data verification: As ESG investing becomes mainstream, self-reported information is no longer sufficient. Accountants and consultants provide third-party assurance and validation, giving investors greater confidence—especially critical for early-stage startups.
• Acting as ecosystem architects: Beyond compliance, professionals are increasingly bridging local governments, funds, and startups. In incubation centers in cities like Fukuoka or Osaka, they provide on-site legal, financial, IP, and cross-border business advice, strengthening the overall ecosystem.

6. Japan in Transition

For decades, Japan’s financial market has been synonymous with conservatism. Yet from the launch of the Five-Year Startup Development Plan, to the rapid growth of regional ecosystems such as Fukuoka, to the rise of angel investors, new funds, and public capital, we are now witnessing a Japan in transition.

These emerging forces may still be small in scale, but like streams converging into a river, they are gradually reshaping the flow of capital. If this momentum continues, Japan’s venture landscape will no longer be dominated solely by banking conglomerates, but will evolve into a diverse ecosystem composed of policies, regional initiatives, next-generation capital, and professional services.

For Taiwan and the rest of Asia, this transformation carries significant meaning. It signals that cross-border investment and innovation will increasingly engage with a Japan that is not static or conservative, but more dynamic and open to experimentation. This “emerging Japan” could well become a pivotal player in Asia’s startup ecosystem.