Japan’s construction industry is forecast to grow steadily in the coming few years, with significant investment being put into infrastructure and commercial building projects in the run up to 2020’s Tokyo Olympics.
Whether you have an existing construction business overseas which you wish to expand in Japan or whether you are looking to start entirely from scratch, we are here to help you get the permits necessary to get your business moving as soon as possible.
Construction works are divided into 29 different categories in Japan (engineering, carpentry, plastering etc) – each of these categories coming with distinct permits and application procedures.
What Do I Need A Permit For?
A Construction Industry Permit is needed for any work excluding small-scale construction.
Small-scale construction is defined as one of the following types of construction work:
① Construction work in which the contract for one project is worth less than ￥15m (incl. tax) OR the contract is related to a wooden residence with floorspace of less than 150m2.
・”Wooden residence” here refers to residences the main component of which consists of wood. The “main component” is defined in Paragraph 5 Article 2 of Japan’s Building Standards Act.
・A “residence” here refers to a private residence, shared accommodation or a residence less than half the floorspace of which is used jointly as a shop or other establishment.
② Construction work in which the contract for one project is worth less than ￥5m (incl. tax).
Types of Permit
Construction industry permits are first of all divided into the two following categories:
① Prefectural Governor Permits – necessary for construction activities limited to one prefecture.
② Ministerial Permits – necessary for construction activities in more than one prefecture.
Within these two categories, there is the further distinction of Special Permits and General Permits.
Special Permits are necessary for prime contract work in which single contracts undertaken directly from the contractee are worth ￥40m+ (or ￥60m+ in the case of General Construction contracts) including tax.
General Permits are necessary for all work that falls outside the conditions described for Special Permits.
N.B. These are general requirements and do not necessarily reflect the reality of what may be needed for your specific application.
Construction Industry Management Experience
・You must hold 5 years or more of management experience in the construction (depending on your level and area of experience and position).
・This experience must be in handling management for both construction work and overall business operations.
※In the case that the applicant’s work experience, qualifications or educational background were obtained overseas, proof of this must be authenticated by the Ministry of Land, Infrastructure, Transport and Tourism (MILT) before submitting the main permit application. We can handle this procedure as part of our support service.
・A technical expert must be present at each office or workplace.
・This expert must hold a qualification equivalent to a Japanese national certification in the area in which they will work OR have relevant work experience of 3 to 10 years (depending on their level and area of education). In order to gain a Special Permit, the technical expert must also have experience in supervising and directing in the relevant area.
※As described above, in the case that the applicant’s work experience, qualifications or educational background were obtained overseas, proof of this must be authenticated by the Ministry of Land, Infrastructure, Transport and Tourism (MILT) before submitting the main permit application. We can handle this procedure as part of our support service.
You must join the following insurance membership:
・Welfare Pension Insurance
◆ General Permit
・￥5m+ of your company’s capital as shown in the most recent settlement of accounts must be Owner’s Capital (jiko shihon). Alternatively, you must be able to show the ability to raise such funds through evidence of ￥5m+ stored in a bank or similar organ.
◆ Special Permit
・The financial statements issued as a result of your most recent tax return prior to application must show the following:
① Losses amounting to less than 20% of capital
② A current ratio of over 75%
③ Capital of ￥20m+
④ Owner’s Capital (jiko shihon) of ￥40m+
・You must have an office from which you can carry out all work related to your construction business. This cannot be a virtual office.
・If you have more than one office, a representative with the executive powers to conclude contracts and other similar business must be present at the main office.
If either the individual or any of the executives of a company making an application meet any of the following criteria, they will automatically fail the application process.
・Being an adult ward, person under curatorship or person who is bankrupt and not yet rehabilitated.
・Having previously obtained a construction permit through false means and had that permit withdrawn within the last 5 years.
・Having had to cancel business operations due to the withdrawal of a permit within the last 5 years.
・Having caused harm or great risk of harm to the public through the inappropriate execution of construction works.
・Having construction works currently halted due to the violation of the conditions of the contract.
・Having committed a crime resulting in imprisonment or a sentence of similar or greater severity, the sentence of which finished within the last 5 years.
・Having been fined according to the Penal Code within the last 5 years for violation of the Construction Business Act, the Building Standards Act, the Labor Standards Act or other laws relating to the construction industry, or for involvement in organized crime.
Need more info?
For any further questions about Japan’s construction industry or about how to establish your construction business, please do not hesitate to contact us!
*Please be aware that the contents of this site are naturally subject to change, meaning that we cannot guarantee their accuracy at the point of access.* *For up-to-date information, please contact us directly.*