
Japan's dynamic economy, rich in tradition and innovation, makes it an attractive destination for entrepreneurs and investors worldwide. However, starting a business in Japan requires more than just registering a company; it demands a thorough understanding of its intricate licensing system. Many mistakenly believe that a business visa is enough to operate legally. Still, Japan enforces strict licensing regulations across various industries to ensure consumer safety, fair competition, and adherence to industry standards. This guide provides the most comprehensive and authoritative resource on business licenses in Japan, detailing the types of licenses and permits required, the application process, industry-specific regulations, and the serious consequences of non-compliance.
Table of Contents

Pre-License Essentials: Setting the Stage
1. Company Registration
Before obtaining a business license, you must legally register your company in Japan. This process involves selecting an appropriate business structure and following legal formalities:
Business Structures:
Kabushiki Kaisha (KK): Similar to a corporation, suitable for medium to large businesses.
Godo Kaisha (GK): Similar to a limited liability company, ideal for startups and small businesses.
Required Documentation:
Articles of Incorporation (定款)
Company seal (印鑑)
Notification of incorporation to the Legal Affairs Bureau
Considerations for Foreign Entrepreneurs:
A registered office address in Japan
A minimum of one resident director for a KK
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2. Visa Acquisition
Foreign entrepreneurs must secure a proper visa to conduct business in Japan. The Investor/Business Manager Visa is the most common and requires:
Proof of a physical office in Japan.
A solid business plan.
Capital investment.
Check Ulpa's recent blog on Business Visas in Japan for all the details.
3. Foundational Setup
Opening a Corporate Bank Account: Essential for managing finances and business transactions.
Office Space and Infrastructure: Required for most license applications.
Tax Registration: Registration with tax authorities for consumption tax, corporate tax, and social insurance.
The History of Business Licenses in Japan
The framework of business licensing in Japan has evolved significantly over the centuries, reflecting the country's dynamic economic and social transformations. Rooted in traditional regulatory practices, Japan's business licensing system has adapted to modern economic demands while emphasising consumer protection, industry regulation, and fair competition.

Feudal Era Regulations
During the Edo period (1603-1868), Japan operated under a feudal system where commerce was tightly regulated by local feudal lords (daimyos) and the Tokugawa shogunate. Merchant guilds, known as "za," were established to control specific trades and crafts. These guilds were granted exclusive rights to operate certain businesses in exchange for taxes and adherence to strict operational guidelines. This early form of business regulation ensured that commercial activities aligned with societal needs and moral standards of the time.

Meiji Restoration and Industrialization
The Meiji Restoration in 1868 marked a turning point in Japan's economic structure, leading to the abolition of the feudal system and the modernization of the economy. Japan introduced Western legal and administrative systems during this period, including formalized business regulations. The Commercial Code of 1899 laid the groundwork for corporate governance and business operations, introducing licensing requirements to regulate emerging industries and protect public welfare.

Post-World War II Economic Boom
Following World War II, Japan experienced rapid economic growth, necessitating a more structured approach to business regulation. The government implemented comprehensive licensing systems to oversee industries critical to the nation's recovery and growth. Sectors such as finance, healthcare, and food services came under stricter regulatory oversight to ensure quality, safety, and compliance with international standards. This period also established industry-specific regulatory agencies to manage licensing and enforcement.

Contemporary Licensing Framework
Today, Japan's business licensing system is characterized by a complex web of national, prefectural, and municipal regulations. Various industries require specific licenses or permits, particularly in the food and beverage, healthcare, finance, and construction sectors. The Ministry of Economy, Trade and Industry and other relevant agencies oversee the issuance and enforcement of licenses, ensuring that businesses comply with safety, environmental, and operational standards. Moreover, Japan has streamlined many licensing procedures to encourage entrepreneurship and foreign investment, introducing online application systems and reducing bureaucratic hurdles. However, stringent compliance requirements remain to uphold consumer protection, fair competition, and ethical business practices.
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Impact on Modern Businesses
Understanding the historical evolution of business licenses in Japan is crucial for entrepreneurs and companies seeking to enter the Japanese market. The system's foundation in consumer protection, industry regulation, and fair competition continues to shape how businesses operate today. Compliance with licensing regulations avoids legal repercussions and builds trust with consumers and industry partners, reinforcing a company's reputation and long-term success in Japan.
Deep Dive into Business Licenses
Why Business Licenses Are Necessary
Obtaining a business license in Japan is crucial for entrepreneurs and companies aiming to operate legally and sustainably. These licenses are not merely bureaucratic formalities but vital in shaping a fair, safe, and well-regulated business environment. Here’s why business licenses are essential:

1. Ensure Consumer Protection
Business licenses safeguard public health, safety, and welfare by enforcing compliance with industry-specific standards. For example, restaurants must adhere to hygiene and food safety regulations, while construction firms must follow safety protocols to protect workers and the public. This oversight helps prevent harmful practices and ensures consumers receive quality products and services.
2. Maintain Industry Regulations
Licensing ensures that businesses operate within the legal frameworks of their respective industries. This oversight deters illegal activities such as fraud, money laundering, or exploitation of workers. Strict licensing requirements for the finance, healthcare, and food services sectors uphold ethical standards and protect consumers and the broader economy.
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3. Support Fair Competition
By requiring licenses, the government helps establish a level playing field where all businesses must meet the same standards. This system prevents unlicensed companies from cutting corners and gaining an unfair advantage over compliant competitors. It encourages healthy competition, innovation, and sustainable growth within industries.
4. Enhance Business Credibility
Holding the appropriate licenses signals professionalism and trustworthiness to customers, partners, and investors. A licensed business demonstrates its commitment to legal compliance and industry standards, which can enhance its reputation and build consumer confidence.

5. Access to Business Opportunities
Many commercial opportunities, such as government contracts, partnerships, and funding options, are only available to licensed businesses. Companies may miss out on these growth opportunities and collaborations without the proper licenses.
6. Legal Protection and Risk Mitigation
A valid business license offers legal protection by officially recognizing a company’s operations. It also helps mitigate risks by ensuring safety, labour, and environmental laws compliance. Operating without proper licensing exposes businesses to fines, legal action, and reputational damage.
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Major Types of Japanese Business Licenses and Permits by Industry
Food and Beverage Industry
Restaurant Business License: Required for serving food and beverages.
Food Sanitation Supervisor Appointment: Mandatory under the Food Sanitation Act.
Late-Night Alcohol Service Notification: Required for serving alcohol past midnight.
Alcohol Sales and Distribution
Liquor Sales License: For wholesale or retail sale of alcohol, issued by the Tax Office.
Special Permits for Alcohol Import/Export: Required for international trade.
Construction Industry
General Construction Business License: For contracts over ¥5 million.
Specific Construction License: For specialized or high-value projects.
Real Estate Industry
Real Estate Transaction License: Required for property sales and brokerage.
Building Lots and Buildings Transaction Business License.

Second-Hand Goods Industry
Antique Dealer License: Issued by the Public Safety Commission, mandatory for selling used goods.
Medical and Pharmaceutical Industry
Pharmacy License: For drugstores.
Medical Device Manufacturing License.
Pharmaceutical Manufacturing and Sales License.
Recruitment and Staffing Industry
Paid Employment Placement Business License: Issued by the Ministry of Health, Labour, and Welfare.
Temporary Staffing Agency License.
Financial Services Industry
Financial Instruments Business License: For securities, banking, and fintech companies.
Money Lending Business License.
Cosmetics Industry
Cosmetics Manufacturing and Sales License.
Import Permit for Cosmetics.
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Automotive Maintenance Industry
Automobile Maintenance Business Certification: Required for vehicle repair and inspection services under the Road Transport Vehicle Act.
Designated Automobile Maintenance Business License.
Security Services Industry
Security Services License: Personal and facility security services are required under the Security Business Act.
Machine Security Operations Notification.
Logistics and Transportation Industry
General Freight Vehicle Transportation Business License: Mandatory for transporting goods commercially.
Warehouse Business Registration.

Energy and Fuel Industry
Liquefied Petroleum Gas Sales Business Registration: For LPG sales under the High-Pressure Gas Safety Act.
Dangerous Goods Facility Installation Permit.
Chemical and Hazardous Materials Industry
Poisonous and Deleterious Substances Sales License: Required for handling hazardous chemicals.
Industrial Chemical Sales Registration.
Waste Management Industry
Industrial Waste Collection and Transportation License: Required for handling industrial waste.
Industrial Waste Disposal License.
Cleaning and Sanitation Industry
Cleaning Business Notification: For operating laundromats and cleaning services.
Building Sanitation Management Business Registration.
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IT and Data Management Industry
Information Processing Service Business Registration: Required for system service companies.
Personal Information Handling Business Registration.
Environmental Measurement Industry
Measurement Certification Business Registration: Required for environmental testing services.
Water Quality Inspection Certification.
Shipping and Shipbuilding Industry
Small Ship Construction Business Registration: For shipbuilding activities.
Shipbuilding Business Start Notification.
Pest Control Industry
Pest Control Business Registration: Required for extermination services in buildings.
Japanese Business License and Permit Acquisition Process
Each license type requires navigating a specific process involving different authorities.
1. Main Regulatory Authorities:
Food Industry: Public Health Center
Alcohol Sales: National Tax Agency
Construction: Ministry of Land, Infrastructure, Transport, and Tourism
Financial Services: Financial Services Agency
2. Application Procedure:
Submit an application form with the required documents.
Undergo inspections or examinations if applicable.
Await approval.

3. Eligibility Criteria:
Industry-specific qualifications: e.g., sanitation supervisors and construction managers.
Financial requirements: minimum capital.
Facility standards: health and safety compliance.
Employer standard: employee working conditions, workers rights.
4. Processing Time and Fees:
Typically, 1–3 months, varying by industry.
Application fees can range from ¥10,000 to several hundred thousand yen.
5. Renewal and Reporting:
Many licenses require periodic renewal.
Annual reporting to regulatory authorities may be necessary.
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Comprehensive List of the Most Common Business Licenses and Permits Required in Japan
1. Food and Beverage Industry
Business Type | License/Permit Type | Governing Law | Issuing Authority |
Food Manufacturing | Permit | Food Sanitation Act | Local Health Center |
Food Sales | Permit | Food Sanitation Act | Local Health Center |
Restaurant and Café Operations | Permit | Food Sanitation Act | Local Health Center |
Alcohol Sales | License | Liquor Tax Act | Tax Office |
Rice Retail | Registration | New Food Act | Municipal Office |
2. Construction and Real Estate
Business Type | License/Permit Type | Governing Law | Issuing Authority |
Construction | License | Construction Business Act | Prefectural Government |
Architectural Design Office | Registration | Architects Act | Prefectural Government |
Electrical Contracting | Registration | Act on the Optimization of Work | Prefectural Government |
Real Estate Brokerage | License | Building Lots and Buildings Act | Prefectural Government |

3. Transportation and Logistics
Business Type | License/Permit Type | Governing Law | Issuing Authority |
General Passenger Transport | License | Road Transport Act | Transport Bureau |
Specific Passenger Transport | License | Road Transport Act | Transport Bureau |
General Freight Transport | License | Motor Truck Transport Business Act | Transport Bureau |
Specific Freight Transport | License | Motor Truck Transport Business Act | Transport Bureau |
4. Retail and Trade
Business Type | License/Permit Type | Governing Law | Issuing Authority |
Secondhand Goods Dealer | License | Antique Dealings Act | Police Station |
Pharmaceutical Sales | License | Pharmaceuticals and Medical Devices Act | Prefectural Government |
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5. Hospitality and Tourism
Business Type | License/Permit Type | Governing Law | Issuing Authority |
Hotel and Inn Operations | License | Hotel Business Act | Local Health Center |
Private Lodging Business | Notification | Private Lodging Business Act | Prefectural Government |
Travel Agency | Registration | Travel Agency Act | Japan Tourism Agency/Prefecture |
6. Employment Services
Business Type | License/Permit Type | Governing Law | Issuing Authority |
Fee-Charging Employment Placement | License | Employment Security Act | Public Employment Security Office |
Worker Dispatching Business | License | Worker Dispatching Act | Prefectural Labor Bureau |

7. Personal Care Services
Business Type | License/Permit Type | Governing Law | Issuing Authority |
Beauty Salon | Notification | Beauticians Act | Local Health Center |
Barber Shop | Notification | Barbers Act | Local Health Center |
8. Financial Services
Business Type | License/Permit Type | Governing Law | Issuing Authority |
Funds Transfer Service | License | Payment Services Act | Financial Services Agency |
Prepaid Instrument Issuer | License | Payment Services Act | Financial Services Agency |
Virtual Currency Exchange | License | Payment Services Act | Financial Services Agency |
Type I Financial Instruments Business | License | Financial Instruments and Exchange Act | Financial Services Agency |
Money Lending | License | Money Lending Business Act | Financial Services Agency |
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9. Import and Export
Business Type | License/Permit Type | Governing Law | Issuing Authority |
Importing Food Products | Notification | Food Sanitation Act | Quarantine Station |
Exporting Secondhand Goods | License | Antique Dealings Act | Police Station |
Exporting Cultural Properties | Certification | Act on Protection of Cultural Properties | Agency for Cultural Affairs |
10. Other Services
Business Type | License/Permit Type | Governing Law | Issuing Authority |
Cleaning Services | Notification | Cleaning Business Act | Local Health Center |
General Waste Management | License | Waste Management Act | Prefectural Government |
Entertainment Venue Operations | License | Entertainment Business Act | Police Station |
Security Services | Certification | Security Services Act | Police Station |
Pawnshop Operations | License | Pawnshop Act | Police Station |

Navigating the Complexities: Tips and Best Practices
Seek Professional Guidance
Engaging legal professionals or administrative scriveners, gyosei-shoshi, can help navigate the complex licensing process. Ulpa can also help by pointing you in the right direction to help speed up your search. Contact us for details.
Diligent Documentation
Maintain organized records.
Prepare for regulatory inspections.
Language Barriers
Non-Japanese speakers should hire professional translation services to handle legal documents.
Patience and Persistence
Processing can be time-consuming. Start applications early and follow up diligently.
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Consequences of Non-Compliance
Operating without the appropriate business licenses in Japan can result in severe penalties. Here are some examples of fines and prison terms for non-compliance:
Food and Beverage Industry Violations
Up to 2 years in prison or
Fines up to ¥2 million for operating without a food service license.
Unlicensed Alcohol Sales
Fines up to ¥500,000 for not filing the required notification for late-night alcohol service.
Possible business suspension for repeated violations.

Construction Without License
Up to 3 years in prison or
Fines up to ¥3 million for projects over ¥5 million.
Second-Hand Goods Sales Without License
Up to 3 years in prison or
Fines up to ¥1 million under the Antique Dealings Act.
General Legal Consequences
Business Closure by government order.
Asset Seizure and loss of revenue.
Reputational Damage that can deter customers and partners.
Trouble when it comes to visa renewals for business managers/owners.
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Conclusion
Navigating Japan's business licensing system is complex but essential for long-term success. Every step must be carefully executed, from selecting the appropriate business structure to securing industry-specific permits. Compliance protects your business from legal penalties and builds trust with customers and partners. Entrepreneurs can lay the foundation for a sustainable and prosperous business by thoroughly understanding and fulfilling Japan's licensing requirements.
Useful Resources

FAQ Section
What is required to start a business in Japan?
Starting a business in Japan requires company registration, securing a proper visa, and setting up foundational infrastructure. Entrepreneurs must choose a legal structure, such as a Kabushiki Kaisha (KK) or Godo Kaisha (GK), register with the Legal Affairs Bureau, and obtain a business visa, like the Investor/Business Manager Visa. Additionally, they need to open a corporate bank account, secure office space, and register for taxes.
What types of business licenses are needed in Japan?
Japan requires industry-specific business licenses depending on the sector. Standard licenses include the Restaurant Business License for food services, the Liquor Sales License for alcohol distribution, the General Construction Business License for construction projects, and the Real Estate Transaction License for property sales. Industries like healthcare, finance, and security services also require specialised permits.
How long does it take to obtain a business license in Japan?
The processing time for business licenses in Japan typically ranges from 1 to 3 months, depending on the industry and the license type. Some licenses may require inspections, background checks, or additional documentation, which can extend the timeline.
What are the penalties for operating without a business license in Japan?
Operating without a required business license in Japan can result in severe penalties, including fines, imprisonment, suspension, and reputational damage. For example, unlicensed restaurant operations can lead to up to 2 years in prison or fines up to ¥2 million, while unauthorised construction work can result in up to 3 years in prison or fines up to ¥3 million.
How can foreign entrepreneurs navigate Japan’s licensing system?
Foreign entrepreneurs can navigate Japan's complex licensing system by hiring legal professionals or administrative scriveners (gyosei-shoshi) to assist with applications and compliance. Using translation services for legal documents and maintaining thorough documentation helps ensure smooth communication with regulatory authorities.
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