By Shingo Hattori — Founder & Managing Partner, Hattori Law
Tel: +81 3 6447 5586
Japan’s hospitality business sector is open to foreign investment. There are no nationality-based ownership restrictions on hotels or restaurants. However, operating a lodging facility requires a government license. Under the Hotel Business Act, any facility offering accommodation to fee-paying guests must obtain a hotel or inn license from the local health/amenity department. Standards cover safety, hygiene and staffing ratios.
Short-term rentals (so-called “minpaku” in Japanese, Airbnb-type lodgings) fall under the 2018 Private Lodging Business Act; hosts must register their property and may only rent it for a limited number of days per year (commonly 180). Foodservice businesses require food hygiene permits, and any on-premises alcohol service needs a liquor license. Labor regulations (strict overtime limits, weekend pay) and taxes (consumption tax, local lodging tax) also apply. In summary, while foreign investors can freely enter the market, they must secure all required operational permits and abide by Japanese hospitality norms.
FAQs:
No. Japan welcomes foreign capital in the hospitality industry. Foreign hotels must follow the same licensing, safety and zoning regulations as domestic operators.
A Hotel Business License (or similar for inns, guesthouses) is mandatory under the Hotel Business Act. Operating without it can incur fines or closure.
The Private Lodging Business Act requires hosts to register with the municipality and meet minimum standards. They are limited to renting out properties for usually up to 180 nights per calendar year under ordinary rules.
Restaurants and bars must pass health inspections and display hygiene certificates. Fire safety standards (e.g., egress, extinguishers) must be met for public venues. Authorities routinely audit hotels and eateries for compliance with these regulations.