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With the very minor exceptions, in order to engage in a construction or the real estate business in Japan you will have to obtain a license called Construction Business License (kensetsugyou). Even though the real estate business and construction have more differences than common points, they fall under the same regulations in Japan.

Below you will find a generalized outline of business license for the real estate/construction business. Because there are many types of activities within this type of business that may require several different licenses. Make sure to always check the latest information from the Ministry of Land, Infrastructure, Transport and Tourism (hereinafter referred to as MLIT).

What kinds of works require a license?

Real estate

If you are operating in a real estate business and plan to buy, sell, exchange or rent a property, you need a license that covers all the areas of work and all kinds of services that your company aims to perform.


There are nearly 30 types of activities in the construction business that need licensing, both for private and public works. All the types of work mentioned in a list below should be covered by the valid license from an appropriate institution. You can get separate licenses for each and every type of work you need to carry out. Or it is also possible to get a license that covers several areas of work at the same time. The number of licenses per contractor is not limited.

Fields requiring licensing (in an alphabetic order):

  • Carpentry
  • Dredging
  • Electrical
  • Fire Protection Facilities
  • Fittings
  • Water and Sewerage
  • General Building
  • General Civil Engineering
  • Glazing
  • Heat Insulation
  • Interior Finishing
  • Landscaping and Gardening
  • Machine and Equipment Installation
  • Masonry
  • Painting
  • Paving
  • Plastering
  • Plumbing
  • Reinforcement Steel
  • Roofing
  • Sanitation Facilities
  • Scaffolding, Earthwork and Concrete
  • Sheet Metal
  • Steel Structure
  • Telecommunication
  • Tile, Brick and Block,
  • Waterproofing
  • Well Drilling

This MLIT guide can help you to learn more about the examples of works that can be performed under each of the above-mentioned categories.

What kind of works does not require a license?

Real Estate

The only activity that does not require the license is rental of your own property.


The so-called “minor works” do not require a license. Construction is considered to be minor when:

  • General building works cost less than 15 million yen, or it is a construction of a wooden house with the total floor area of less than 150 m2
  • The work costs are less than 5 million (excluding the abovementioned point)

Duration of license validity

The license is issued for 5 years and must be reissued on a regular basis.

Types of the license

By the issuer (for establishments of offices):

  • License by the Governor of the municipal government if you need to establish an office or several offices within one prefecture.
  • License by MLIT, if you need to establish offices in more than one prefecture.

By the scope of action (for hiring contractors and subcontractors):

  • Ordinary Construction Business License
  • Specific (or Special) Construction Business License

Where to apply

For an Ordinary Construction License: at the prefectural government.

For a Special Construction Business License: at the Ministry of Land, Infrastructure and Transport.

You can find the list of places where you can apply for the licenses from here (in English).

Need more information ?

For more information fill in the form or call us and we connect you to our client servicing team directly.

Requirements for the Construction Business License

The set of requirements for the license will significantly depend on many factors. Namely, the type of work, number and location of the offices, availability of contractors and subcontractors, and many others. All of these will affect the procedure and the set of documents you need to prepare. It is always a wise choice to consult the Ministry of Land, Infrastructure, Transport and Tourism, or the local representatives to receive the latest and fullest information about the requirements.

Below you will find general guidelines that are applicable to all construction works. Please note that each of the four main requirements has its own set of prerequisites. Thus, for example, it is not enough to find a full-time engineer. The engineer should meet the own set of criteria to qualify as the right type of professional that works with the applicant.

There are four main requirements to get a Construction Business License:

  • Assigning the person responsible for management and operation
  • A full-time engineer present at every office
  • Reliability
  • Financial considerations

Let us go through them one by one.

Assigning the person responsible for management and operation

The person responsible for management and operation is called PRMO for short. PRMO can be a physical entity (an individual) or a legal entity (a corporation, etc.).

When applying for the license one of the applicants, or their manager, or one of the corporation directors should comply with the following requirements:

  1. A contractor should have at the site at least one person with the relevant experience and expertise in the works to be performed to ensure the quality of the management.
  2. A candidate for the PRMO position should have experience in being PRMO (one of the following statements should be followed):
    1. at least 5 years of the relevant, if the applicant has the working background and has been involved in the same type of work activities as the license they apply for.
    2. at least 7 years of relevant experience, if the applicant has the working background and has been involved in the different type of work activities as the license they apply for.
    3. PRMO should have experience in accordance with one of the following conditions:
      • 5 or more years of a comprehensive administrative experience as an executive director in a construction company, etc. Such an authority has been delegated to him or her by the board of directors or a senior director by the decision of the board of directors about the execution of the business management.
      • 7 or more years of experience in assisting in all of the tasks specified below.

If the person hiring PRMO (also known as the user or an applicant) is an individual, PRMO position should be right below the user.

If the user of a PRMO is a corporation, PRMO position should be right below the director of this corporation.

A full-time engineer present at every office

An applicant must assign a full-time engineer (FTE for short) working on a full-time basis to each of the established offices in order to guarantee the correct performance of such related construction business activities as estimation, bidding and contract conclusions. All of the above-mentioned tasks should be performed by a professional with the appropriate qualifications and experience in a specific type of the construction work that the company wants to perform. Such qualifications may vary depending on the type of work.

There are two categories for the construction business: Ordinary and Specific (also called Special sometimes). The Specific License has extra requirements to protect subcontractors.

Requirements for FTEs for the Ordinary License:

  1. FTE must have completed the study in a so-called “designated subject” (meaning studies relevant to the type of construction work that the company wants to perform) and has 5 or more years of experience after the graduation from high school or at least 3 years of working experience after graduation from a university.
  2. FTE must have at least 10 years of experience in the area of construction that needs to be licensed for a construction business.
  3. FTE may be a National Certificate Holder or have an equivalent qualification of technical knowledge and skill for a construction business that needs a license.
  4. FTE can also be a person that received an approval from the Minister of the MLIT that he or she has the same or higher abilities as stated in items “1” and “2”.

Requirements for FTEs for the Specific License

  1. FTE is a National Certificate Holder.
  2. FTE has experience working as an instructor/supervisor or in a similar position.
  3. FTE can also be a person that received an approval from the Minister of the MLIT that he or she has the same or higher abilities as stated in items “1” and “2”.


No one will be allowed to perform any activities related to the construction business if in the process of contract conclusion or work operations one can presume illegal or unfaithful actions. There are no exceptions to this rule and it is applicable to both the individuals and the corporations as well as the directors who have important positions and roles in transactions of the given construction business.

Financial considerations

Construction works will require investments in a labor force, materials, equipment and all the other aspects of construction works. Thus, the applicant for the construction license should have sufficient financial capabilities to carry out the construction work for which they need a license.

For a Specific License there are additional requirements to make sure that subcontractors will be managed and paid fairly. Subcontractors must be paid within 50 days after the delivery of goods and services even if the contractor has not yet been paid by the original commissioner. The exact requirements can be obtained from the MLIT for your specific case of the construction business.

Ordinary Construction Business

A contractor must comply with one of the following requirements:

  • A net worth of 5 million yen or more.
  • Fundraising abilities of 5 million yen or more.
  • The constructor has been continuously operating during the past 5 years before the application date.

Specific Construction Business

A contractor must comply with all of the following requirements:

  • No more than 20% capital deficits.
  • 75% or more for a current ratio.
  • 20 million yen or more in capital.
  • A net worth of 40 million yen or more.

Application fees

Those who seek the MLIT Minister’s approval will have to pay the following fees:

  • Registration License Tax for approval of a new license: 150 000 yen.
  • Additions within the same license classification or renewal: 50 000 yen.

Those who seek the Prefectural Governor’s approval will have to pay the following fees:

  • Approval of a new license: 90 000 yen.
  • Additions within the same license classification or renewal: 50 000 yen.


License for construction works and real estate operations covers a wide variety of activities. While four main conditions are the same for every company (assigning a responsible manager and a full-time engineer, being reliable and financially stable), each case is considered by the Ministry of Land, Infrastructure, Transport and Tourism. You can always find up-to-date information regarding the application fees and procedures as well as guidelines for your particular case from them. Be sure to obtain your license before the start of operations in order to keep clear of fines and legal consequences for running a business without a license.

Construction Business License FAQ

What will happen if I do not have a Construction Business License?

Always remember that performing any activities in a construction sector without a license can be punished by the fine of 3 million yen or even an imprisonment for up to three years, or both.

Can a working experience from a foreign country be recognized in Japan?

The experience obtained in the foreign country (countries) may be recognized as relevant if it is approved by the Minister of the MLIT.

Can FTEs apply for several categories if they are qualified in several types of work?

They have to take the periods of their working experience into consideration. The same span of time that has been used to apply for one construction category cannot be re-used to apply for a different category. For example, if a person has been working in gardening as well as roofing in 2000-2005, he or she can use it to get the license in only one of those areas, either gardening or roofing. They cannot use that same experience to apply for a license in the second category.

Can FTE resign from the office after the license has been received?

Yes, if he or she wished to do so. However, the new FTE with the appropriate qualifications should be hired. And the changes should be declared to the institution that has issued the license. The office is not allowed to operate without the FTE. It is important to remember that if the FTE is no longer present at the office after the license for the construction work has been obtained, the license may be revoked.

Which laws regulate the real estate and construction business in Japan?

The key law in this sector is called the Construction Business Act (Kensetsu gyou hou).

More information about other regulations is available at the MLIT pages about the compliance with the construction laws and other legal regulations regarding the construction industry.