Reduction of National Health Insurance Tax of JapanJune 21, 2020/
Business licenses in Japan
Business license in Japan
Lately, many foreigners are looking for a way to start their own business in Japan. These days it’s certainly easier to enter new markets, compared to twenty years ago. However, we should not forget that certain business activities may require obtaining a business license. Or as it is known in Japanese — 営業許可 (Eigyō kyoka).
Foreigners may run any type of business in Japan even a traditional onsen ryokan or a public bathhouse. Small-scale businesses, such as food trucks (see below for more details), the ever so popular internet cafes, or large-scale businesses such as construction business.
However, you will need to obtain a special permit from the Japanese government to be able to provide certain services. Please do remember, that if a certain type of activity does not require licensing in your home country, it may not be the same in Japan. So, if you are not sure, please consult a Japanese lawyer.
For instance, let’s take a look at the hotel business. As you may know, Japan’s popularity among tourists from China, Korea, Europe and North America has been steadily growing in the last 10 years. So if you have enough funds or if you already own a property in Japan can try running a hospitality business.
We have covered this subject on our blog. So if you are interested in the core principles of running a hotel business in Japan take a look at our article — Starting a hotel business.
It’s not a secret, that these days there is a lot of workforce shortage in Japan. And the country is struggling to find available workforce. The new visa status introduced for foreigners last year for workers who come to work in certain industries isn’t as popular as the government hoped.
Merely 3,987 workers signed up for the program over the previous 12 months, less than 10% percent of the Japanese government’s projections. That is why starting a recruitment company in Japan or perhaps expanding an existing business to the new market may be a good idea.
For example, you can receive a fee by inviting high-skilled workers from outside the country and introducing them to Japanese companies. The introduction fee may be as high as 30% of the employee’s annual salary. If, let’s say, the annual wage of such a worker is ¥10,000,000 your company’s commission may be up to ¥3,000,000.
However in order to start such a recruitment business, you would have to obtain the Eigyō kyoka, we mentioned above i.e. a special permit from the Japanese government to run such a business. The same goes for hiring employees and dispatching them to Japan. You may be entitled to a monthly from the Company, they are providing services for, however you would need a special license.
Those are called Jinzai haken (人材派遣) and Jinzai shōkai (人材紹介) respectively. Check our article: Recruitment and worker dispatching business in Japan for more details.
Selling alcohol in Japan
If you come from a country where wine business is quite popular or you possess experience in wine and spirits industry, you may start a similar business in Japan. Foreign wines may be quite popular here in Japan and you will certainly find your target group.
You import wine or other alcoholic beverages and sell them to restaurants or directly to customers (general public). However, you need to obtain the alcohol seller license beforehand from the Japanese government. The same goes for those wanting to engage in exporting activities and export Japanese made products, such as sake (nihonshuu/日本酒) elsewhere:
Please remember, that providing services without having obtained a proper license is illegal in Japan and may lead to unfortunate consequences.
Food import & Restaurant Business
Similarly how Asian food and cuisines’ popularity has been on the rise in Western countries, European and American products have been gaining recognition here in Japan. You can conduct market research, perhaps you will be able to find a niche on the market, and introduce Japanese customers to your local delicacies.
For the same reason, you can try importing European- or American-made tobacco products such as cigarettes and cigars. In order to do that you will have to obtain the respective licenses — Food importer license and/or Tobacco license in Japan.
Such a business may be run by any foreigner, provided that the person possesses the appropriate license. We will give you an example.
Perhaps you are a famous chef in your home country, and you have vast experience in running an Indian or Turkish restaurant? The latest researches confirm that foreign food is quite popular in huge Japanese “megapoleis” such as Tokyo or Keihanshin (Osaka-Kyoto-Kobe).
So you can use this perfect opportunity and start a restaurant business in Japan, check what sort of permit you will have to obtain — How to open a restaurant in Japan. Be advised, that if you are planning on importing food to use at your restaurant, you will have to get the permit we mentioned above.
If you are not sure if your business is going to succeed, why not start on a smaller scale by running a food truck (often called “kitchen car” business in Japan). Your average young Tokyo salaryman will gladly grab a lunch right out of your food truck. It’s the easier way to validate your business idea.
There are some restrictions however, the Japanese law that regulates such cases does not allow food type mixing. It basically means that you cannot sell fish-and-chips and belgian waffles from the same food truck. If that does not ruin your business idea, you should try reading on How to operate a food truck business in Japan.
Running language schools and nurseries
The number of foreign nationals current residing in Japan is getting higher each year. Some of them, come to work for Japanese companies, that have English-speaking divisions only. For example: designers, IT-specialists, IT-engineers and other foreign employees being employed on similar positions, where basic conversational Japanese (up to N4) may be sufficient.
If they are planning on becoming a permanent resident and/or eventually a naturalized Japanese citizen, they will probably look for a way to improve their Japanese. That is why Japanese language schools are so popular these days. Running such a school may prove to be quite profitable, as students will pay you monthly or annually once they have sign up for the classes.
On the other hand, some Japanese parents hope to send their children to a a nursery school or daycare (called 保育園 — hoikuen in Japanese), where classes are conducted in English, which will help their children to be bilingual. Therefore if you got the experience and manage to find the proper staff, you can set up an International Nursery.
If you are both foreign nationals that have migrated to Japan, perhaps you won’t have to change your career drastically. It is even possible to become a Foreign Lawyer in Japan. You won’t, however, be able to to give legal advice or provide legal counseling as you are not a Japanese lawyer.
Second-hand dealer license
One of the major advantanges of people starting business in Japan is the possibility of using their business connections in their home country. Due to the increasing popularity of Japan and Japan-made goods, their value on the market in the West can be quite high in some instances. Provided of course that you have found the right niche for your product.
Purchasing used items and second-hand goods (in Japanese the term 中古品 — chūkohin is often used), especially pre-owned vehicles and reselling them in your home country can prove to quite profitable. Especially when it comes to exporting used cars (called 中古車 — chūkohsha) made by famous Japanese cars manufacturers (such as Toyta, Nissan or Honda for example).
Average Japanese companies often struggle to enter new markets without any business connections to rely on. However if you are considering setting up a second hand cars dealer in Japan, please do not forget that you will have to obtain the appropriate license — Second-hand dealer license.
Got some additional questions? Perhaps you need some assistance with your visa or your current residence status? Get in touch with us, by using the email address provided below:
Other than articles mentioned above, you can find many articles (I am spending many days to write it down…..You can find it “blog of Japan“)