You can start Guest house business without hotel license in Japan
Assumed that you want to operate Minpaku business (airbnb business, Guest house Business).
However in order to engage in such business, Generally you need to obtain hotel inn license.
In this situation, Minpaku Shinpou (New Minpaku Law) has been adopted.
If you can satisfy several requirements, you can operate hotel similar business (“New Minpaku Business”) without hotel inn license.
Now in order to list your real estate at website of airbnb, you need to notify registration number issued by authority.
If you can register your real estate based on New Minpaku Law, you can obtain this registration number.
This new law (New Minpaku Law) became effective in mid of June, 2018.
As of now, in the case you operate hotel inn business in one unit of apartment or detached house, there is a possibility that you can obtain hotel inn business license or budget hotel business license ( 簡易宿所免許 ).
However in order to obtain this license, you need to obtain permit from authority ( health authority ), fire department (It still applies to new Minpaku law, depending on situation) etc.
And you can not obtain this Hotel inn license if the premise is located in exclusive district for residential use ( Jukyo senyo chiiki ).
And if in apartment association rule stipulates that your apartment is residential purpose, you can not obtain hotel license. ( It still applies to new Minpaku law, though ).
You need to prepare necessary fire prevention equipment, including automatic fire alarm (It still applies to new Minpaku law, depending on situation).
On the other hand, in the case of new Minpaku law, there are some deregulation as below.
You can operate this business without permit, but by registration with Prefectural government or chief of ward.
In the case you stay in your new minpaku Hotel (precisely speaking, it is residence) with your guest or you stay at close place to your Minpaku hotel, you can start new minpaku business with notification to authority.
(this is called “Operator staying type”)
For example, you accommodate guests in your residence and receive hotel charge, as far as you submit (to prefectural government office or ward office) notification to authority, you can operate this new minpaku business.
You can operate your new minpaku business for 180 days or less per one year.
(this number is maximum number stipulated by New Minpaku law. Then, some ward have reduced this amount, even if it is zero day. In the case of Karuizawa town, it is zero day)
Even if your guest stays in your new minpaku hotel for one day, it is acceptable.
Your new minpaku Hotel does not need to equip with reception desk.
You can operate your new minpaku hotel business in exclusive district for residential use ( Jukyo senyo chiiki. However some wards restrict it).
Administrator of new minpaku business
When you operate new minpaku hotel business (based on new minpaku law), you need to hire a administrator company called Kanrigyosha.
However in the case of Owner staying type (yanushi taizaigata), you do not need to hire Administrator company.
This administrator is a company registered with Ministry.
So, you are required to pay fee for it.
Your Kanrigyosha needs to be located in close place (30 minutes distance) to your Minpaku hotel.
If administrator company assists illegal New minpaku business operator ( ex. Person who operates new Minpaku business more than 180 days per a year ), authority can remove this company from registration.
So, this company will not assist illegal operation unless the company is operated by Minpaku business operator itself.
This administrator needs to engage in following activity.
1 It needs to solve problem caused by new minpaku hotel business.
2 It needs to prepare hotel register, insurance, keep sanitation, conduct explanation of rule of neighborhood ( how to discard garbage etc. ).
3 It needs to inspect content of apartment association rule and confirm if there is not rule that prohibit operation of new minpaku hotel business.
So, if in apartment association rule stipulates that owner of apartment can not operate New minpaku hotel business in the apartment, you can not operate new minpaku hotel business.
In the case you are renting an apartment and operate new Minpaku hotel business, you need to get permit from owner of your room and apartment owner’s association (all owners constitute apartment owner’s association)
In the case, you are renting the real estate and plan to operate new minpaku hotel business, administrator needs to inspect content of lease contract between owner of real estate and you.
So, if lease contract stipulates that you can not rent out the real estate to subtenant ( In most of cases, it should be stipulated ), you can not operate new minpaku hotel business.
It also needs to make report to relevant authority, including police department, health authority, tax office.
Like this you need to hire administrator and it will examine date of operation and payment of tax.
So, in the case of new minpaku law, you need to pay tax properly.
If you do not want to pay fee for administrator, you may be able to become administrator. If you have work experience in real estate company for 2 year or more or have registered as takuchi tatemono torihikishi or Kanri gyoumu shuninsha or Chintai hufousan keiei kanrishi, you may be registered as administrator. (government fee is 90,000 yen).
Fee for administrator company
In the case of new minpaku law, you need to hire administrator company ( In the case of operator staying type and scale of your operation is not big= less than 5 rooms and 5 building, administrator company is not necessary. But if each building is far from each other, you need to hire administrator company).
These companies charge 20%, 25%, 30%, 35% of hotel charge.
Intermediator of new Minapaku business
In the case a person or company engages in intermediary of new minpaku hotel business, he/she needs to register with Ministry of sightseeing.
So, Airbnb company may need to register with minister.
And in that case Airbnb company needs to abide by following regulation.
1 It needs to clarify your business is new minpaku hotel business..
2 Authority can order Airbnb company to remove information of illegal hotel business operator.
3 If Airbnb company does not follow regulation, authority can prohibit Airbnb company from operation.
Airbnb company has already sent operator of hotel business an order to obtain hotel inn license or registration number based on new minpaku law.
Then, if illegal operator does not perform his/her duty, Airbnb company may remove information of your real estate from its list.
Subsequently there are possibilities that the number of illegal hotel operator will decrease.
Though, new minpaku law stipulates 180 days, it is maximum number of days. So, each prefectural government can reduce this 180 days.
Moreover, each local authority can designate specific area and prohibit from operation of new Minpaku hotel business.
In the case of Tokku minpaku (hotel business in specially designated area), you can not operate Minpaku business in exclusive residential zone.
However in the case of new minpaku business, your hotel is deemed as “residence”.
So, such regulation is not applied. On the other hand, in the case of apartment, you need to confirm if you can operate new minpaku business with apartment association in advance.
On site inspection
In the case authority thinks a person engages in illegal hotel business, it can conduct on site inspection without consent of business operator.
As for your real estate
In order to use your real estate for new Minpaku hotel business, it should be residence that you are using as “Residence” as of now.
1 you are living in the real estate or
2 You are trying to find resident for the real estate or
3 You or other persons are sometimes using it as residence
So, if you build new apartment in order to operate new Minpaku business, your real estate is not included in this “Residence”.
And your real estate should be residential real estate. If you use your real estate for office space other than duration of operation of hotel business, your real estate is not “Residence”.
In order to engage in new Minpaku business, you need to inform neighboring persons of your operation.
You need to put plate that indicates your operation. So, you can not operate your business secretly.
Necessary fire prevention facility in the case of new Minpaku law
Necessary fire prevention facility differs depending on each city and your situation.
Generally, even if it is detached house or building, you need to prepare Automatic fire alarm (Jidou kasai houchiki. it may cost 100 thousand yen or several 100 thousand yen) and Emergency exit light (Yuudoutou).
Even if it is detached house or building, in the case room area is 150 ㎡ or more, you need to prepare Fire extinguisher.
Thus, in the case of detached house (less than 150 square meters), you need to prepare ONLY automatic fire alarm and Emergency exit light.
(Though there are exceptions. Depending on situation, even automatic fire alarm is not necessary)
If you use a part of your residence (you are actually living there) as new Minpaku hotel and room area for business is 50 ㎡ and it is less than 50% of total room area, you do not need to prepare additional fire prevention facility.
Because it is deemed you residence. (every house needs to prepare residential purpose fire alarm, though)