Minpaku business in Japan
Short-term rental business (called minpaku — 民泊) is actually quite popular in Japan, especially in places such as Hokkaido and other tourists spots throughout Japan.
If you are interested in starting a hosting business here in Japan, here what you should know.
As some of you may have heard in 2018 the New Minpaku Law (民泊法) that came into effect in Japan, tightened the regulations, making it quite hard to rent out apartments through services such as Airbnb or Booking.com In this article we will take look at the main features.
Remember: if you need any legal advice concerning the small-scale accommodation business, let us know, here at Tomohiko Akiyama Legal Services, we are always ready to help foreigners set up their own business in Japan.
But first things first.
Do i need a special Minpaku license?
Quick answer: yes. You do need a license to run a short-term rental business in Japan.
And this is important: anyone, who wants to operate a Minpaku-type of business in Japan must obtain the appropriate Minpaku license.
Where’s the catch? Well, a Minpaku business can be operated for up to 180 days a year. It means that you cannot run your short-term rental business 365/365.
But if it’s not a problem, you may obtain the necessary license, however you should remember, that it can be quite a lengthy process. Unfortunately the number of required documents tend to be quite long.
You will have to present the city hall with the information regarding the company that will be handling the trash your business is gonna to produce.
Do not forget that your will have to have a designated administrator on-site if the owner doesn’t live on the premises. And if the number of lodging rooms exceeds 5 or more — the administrator overseeing the business must be present at all times, regardless of the owner’s status.
Similarly to other business, lighting equipments must be regularly checked, evacuation routes clearly displayed, along with other emergency & fire safety equipment.
It may seem quite obvious but in Japan laws (especially concerning short-term rentals) are very strict.
Once everything is in order, your application will be accepted by the city hall and you will receive your license number. You must give your neighbours your license number (if needed), and signs informing of the building purpose must be clearly visible (at all times).
Collecting’s lodgers’ information
Collecting your lodger’s personal information is mandatory and must be stored and reported to the authorities. A guestbook must be kept with the information regarding your business’s all lodgers.
- If your guest is a Japanese citizen, he or she will have to be present a photo ID (driver’s license or another form of photo identification).
- If your guest is a foreign national — the person’s passport must be collected and stored instead.
You are obligated to collect and store all your guests’ names, dates of birth, occupations, addresses, and the respective dates when they stayed at your inn.
You must provide this information to the authorities every 2 months, this report must contain information on:
- current number of lodgers;
- total number of lodgers in the previous 2 months;
- the number of days hosting in the previous 2 months;
- breakdown of the number of lodgers per nationality (again in the past 2 months).
This information must be submitted on the 15th day of February, April, June, August, October, and December. The information in your guestbooks must be at least kept for 3 years.
Setting up a minpaku business in Tokyo
Well, Minpaku is a tourist-oriented type of business, so the obvious question is ‘Can you run a short-term rental business in Tokyo’?
While being one of the most prominent tourist spots in Japan filled with people, it’s not actually that easy to run a short-term rental business in Tokyo in some wards. Here’s why.
Tokyo is a metropolis divided into special wards*. Each ward decides how to enforce the new Minpaku law on its own, so there is no common standard that applies throughout Japan. Actually, there isn’t even a single standard in Tokyo.
*or cities, as the word ‘city’ is usually preferred these days for marketing reasons.
For instance Shibuya-ku (渋谷区) — one of the prominent places in Tokyo, filled with tourists.
Unfortunately for those wanting to set up a Minpaku business, it is prohibited as of 2020 to operate such businesses in exclusively residential zones, and school zones, unless you are operating this business during school (winter, summer, spring) holidays.
This regulation (called ‘regulation 1’ in Japan) does not apply however to the so-called ‘special operators’, that have to be members of neighboring associations, operate the business within 100 meters vicinity of their residence, and some other requirements. Provided, that they inform all the neighbors.
Do i have to inform all the neighbors?
In accordance with the new law, you will have to inform your neighbors regarding your plan 7 (seven) days prior to registration. The number of people you would have to inform vastly depends on the location of your business.
So if you are planning on running a Minpaku business in an apartment building, you would have to inform all residents and owners (if they are not currently residing in the said building).
If there are some problems contacting the neighbors, you can present the city hall with that information as well — and they can eventually decide, whether to proceed with your registration process.
What about other wards in Tokyo?
Rules in other wards may vary, in Ota-ku (大田区) no Minpaku may operate in residential districts, in Chuo-ku (中央区) weekday rentals are forbidden completely.
If you are looking for a place with fewer requirements, you can always take a look at Hokkaido (北海道), as we mentioned above the northernmost region of Japan tend to be quite popular among tourists.
We had some experience in setting up a Minpaku business in Hokkaido, so if you need any help, contact us and, so you know what awaits you should you decide to go with that sort of business.
You can also check our article — Registering a minpaku business in Hokkaido — for more information.
Here at Tomohiko Akiyama Legal Services, we are ready to arrange everything beforehand, and look into potential problems you may have encounter.
We are always eager to help our clients.