What is a business license?　Do I need one?　Overview of business license application and whether it is required or not

When you think "I want to open my own store! You cannot start your own shop without the necessary procedures. Does the store need a permit? Is it authorized? Is a notification sufficient?

Today we will provide you with a complete overview of the permits and licenses for various types of businesses.

What is a business license?

What is the licensing system?

The licensing system is,A mechanism to obtain the necessary permits and approvals from the relevant government agencies to start or operate a businessIt is. The purpose of this system is to ensure that businesses are providing safe and reliable services and products in accordance with laws and regulations, and it plays an essential role in the business environment. By obtaining a license or permit,Demonstrate business reliability to consumers and society, and protect public safety and health.It also serves to promote fair competition and ensure appropriate tax revenues. In short, the licensing system is an important mechanism for the sound operation of business and a sustainable economy, and contributes to the overall benefit of society.

Main elements of a business license

1. Application and Review
   To obtain a business license, an application must usually be submitted in advance and reviewed by the relevant authorities. The application includes information on the business plan, the structure of the facility, and the qualifications of the staff.
   
2. Compliance with standards and regulations
   In order to obtain a business license, a business must meet standards based on relevant laws and regulations. These include safety standards, sanitation standards, and appropriateness of operations.
   
3. Obtaining Permits
   Upon successful completion of the review, a business license is issued. This allows the operator to operate a legally recognized business.
   
4. Ongoing compliance and renewal
   A business license is not valid forever once obtained. It must be renewed periodically and changed in accordance with amendments to laws and regulations. Even after obtaining a permit, you are required to continue to comply with all relevant laws and regulations.

History of the Business License System

Next, I will briefly touch on the historical background of business licenses in Japan. I believe that knowing the historical background will help you overcome the many difficulties you will have to tackle when you apply for a business license.

Commercial Regulations in the Meiji Era (1872)
During the Meiji period (1868-1912), Japan tightened regulations on commercial activities in the process of adopting the Western commercial system. 1872 saw the enactment of the Commercial Code, which established basic rules for business. The Commercial Code stipulated commercial registration, the establishment of companies, and rules for transactions, ensuring transparency and reliability in commercial activities.

Early Showa Revision (1925)
In 1925, the "Commercial Registration Law" was amended to further improve the licensing system for commercial activities. This amendment made it mandatory to obtain a business license and strengthened the control of business activities.

Postwar legal reform (1947)
As Japan rebuilt its economy after World War II, its commercial legislation underwent a major overhaul: in 1947, the "Commercial Code" was revised to further clarify the system of business licenses. Various deregulation and support measures were also introduced during this period to assist in the postwar economic recovery.

Recent deregulation (since 2000s)
Since the 2000s, economic liberalization and deregulation have been underway in Japan. In particular, the Basic Law for Small and Medium Enterprises, enacted in 2005, and other laws have simplified the procedures for obtaining business licenses, allowing for more flexible operations for businesses.

In January 2023, the Food Sanitation Law revised the business license system and established a business notification system.

(Source:Ministry of Health, Labor and Welfare Information on business regulations)

As in the example of the Food Sanitation Law above, the types and contents of licenses for business operations are frequently revised according to the social background and living conditions of each era.

What is the significance of a business license?

Now I would like to consider the social significance of this business license.
Due to the following significance, the business license system is not just a procedure, but functions as an important system to ensure the safety and fairness of society as a whole.

• Public Safety and Health Protection
  • The business license system ensures that the business complies with laws and regulations,Play a role in protecting the safety and health of consumers and communities... For example, restaurants and medical facilities are subject to strict standards, and obtaining a business license guarantees that sanitation and safety measures will be observed, allowing customers to use your restaurant with peace of mind.
    
• Ensuring consumer confidence
  • By obtaining a permit,The business is proven to be a legally recognized entity, which helps to gain consumer confidence.A business license allows consumers to assume that the business meets certain quality and service standards.
    
• Promoting fair competition
  • Because the business license system requires operators to meet certain standards,Unfair competition and unfair business practices are discouragedThis will promote fair competition and maintain a healthy market environment. This will promote fair competition and maintain a healthy market environment.
    
• Securing tax revenue
  • By obtaining a business license, the business is obligated to register with the tax office and perform proper tax treatment. Thereby,Tax revenues are secured and used to fund public services.
    
• Monitoring and control of business operations
  • The business license system provides a means to monitor business operations and take corrective action when laws and regulations are violated.This allows us to verify that the operation of the business is legally appropriate and to address any problems as soon as they arise.
    
• Fulfillment of Social Responsibility
  • How do you obtain a business license?It is positioned as the first step for businesses to fulfill their social responsibility.By complying with laws and regulations, we can contribute to the overall order and ethical standards of society.

Due to these significance, the business license system is more than just a procedure; it functions as an important system to ensure the safety and fairness of society as a whole.

Do I need a business license? Examples of industries that require a business license

There are so many types of businesses that require business licenses, and the number of licenses varies from region to region, and they are being added and revised one after another in line with the times, as in the case of the recent examples of private accommodations and drone licenses.

The following is a partial list of industries that may be relatively familiar to you.

• restaurant industry
  • Restaurants, cafes, barsFood Business License" based on the Food Sanitation Law is required. Sanitary management of facilities and sanitary standards for cooking utensils are required.
• business offering food and entertainment
  • Cabarets, clubs, snack bars, karaoke boxes, pachinko parlors, love hotelsThe following is a list of the types of business licenses that are required: "Entertainment Establishments License" under the Entertainment Establishments Law.
• medical industry
  • Hospitals, clinics and dispensaries: A "license to establish a medical institution" based on the Medical Care Act is required. It regulates the qualifications of medical personnel and facility standards.
• beauty business
  • Beauty salons, esthetic salonsThe following are required: "Notification of Establishment of Beauty Salon" or "Notification of Establishment of Esthetic Salon" based on the Beautician Law and the Cosmetics Hygiene Law. Standards for hygiene management and techniques are required.
• construction industry
  • general (civil engineering and construction) contractorConstruction Permit: A "Construction Permit" is required under the Construction Industry Law. The requirements for qualifications and engineers are stipulated according to the nature of the construction work.
• real estate business
  • Real estate brokerage: A "real estate transaction license" based on the Building Lots and Buildings Transaction Business Law is required. Regulations concerning real estate transactions and brokerage are established.
• Sales of pharmaceuticals and cosmetics
  • Pharmacies, drugstoresThe following are required: "Permission to open a pharmacy" or "Permission to sell cosmetics" based on the Pharmaceutical Affairs Law. Quality control and sales methods for the products handled are regulated.
• finance business
  • Banks, securities firms: A "Financial Business License" is required under the Financial Instruments and Exchange Law and the Banking Law. There are regulations regarding capital, management standards, and customer protection.
• lodging business
  • Hotels and innsRyokan Business License" based on the Ryokan Business Law is required. Safety standards for facilities and quality of service are required.
• education or schoolwork
  • Tutoring schools, language schools, vocational schoolsThe "Approval for Establishment of Educational Institution" based on the Fundamental Law of Education and the School Education Law is required. The standards for facilities and qualifications of teachers are stipulated.
• amusement industry
  • Casinos, pachinko parlorsThe "License to Operate Amusement Facilities" is required based on the Amusement Facilities Law. There are regulations regarding the contents of amusement and business methods.
• Food Manufacturing
  • Confectionery and beverage productionFood Manufacturing License" based on the Food Sanitation Law is required. Standards for the management of manufacturing processes and raw materials are set.
• Animal related business
  • Pet store, veterinary hospitalAnimal Handling Business Registration" and "Animal Hospital Establishment Permit" based on the Animal Welfare and Management Law are required. There are standards regarding the handling and treatment of animals.
• event business
  • Management of concerts and exhibitions: Depending on the content of the event, a "specific entertainment venue business permit" or a "venue use permit" may be required. Safety management and operational methods are regulated.
• transportation business
  • Cab, bus, trucking: A "Transportation Permit" or "Transportation License" based on the Road Transportation Law is required. Operation standards and vehicle management are required.
• the disaster prevention industry
  • Inspection of fire fighting equipment, security services: "Fire equipment inspector registration" and "security business authorization" based on the Fire Defense Law and Security Business Law are required. There are regulations regarding disaster prevention and safety measures.
• warehousing business
  • Warehousing and logisticsWarehousing: "Warehousing Registration" is required under the Warehousing Law. Warehousing facilities and management standards are regulated.
• Environment-related industries
  • Waste disposal and recycling: A "waste disposal business license" or "recycling business registration" is required based on the Waste Disposal and Public Cleaning Law and the Recycling Law. Standards for waste disposal and recycling are established.

summary

How was it?

When you want to open your own store, you must check to see if you need a permit for that business. In most cases, a business permit is not the end of the process, but rather a periodic application for a permit must be made every three or five years.

Consultation, preparation of application documents, and application agency services for licensing applications are the exclusive statutory duties of administrative scriveners.
If you are in doubt, please contact us.