Travelers from the entire world who are looking for their next destination should definitely choose Japan. The country is a trip worth making, no matter whether visitors want to see this amazing country backpacking across it, joining a couple of tours or taking their families to see the amazing sites. Entrepreneurs who want to open a travel agency in Japan can begin by offering visitors a chance to discover this amazing country.
Those who want to open a travel agency in Japan must comply with several requirements under the Travel Agency Law. Our advisors can offer detailed information on the requisites related to the establishment of a travel agency in Japan.
Our company formation consultants in Japan offer a wide variety of company incorporation services and provide assistance in deciding what type of company is most suitable for your business. We can also assist with the registration of the chosen business form when establishing a travel agency.
Table of Contents
The Travel Agency Law in Japan
Those who want to work in the tourism industry, no matter if they want to operate as sole proprietors or by setting up companies as travel agencies, must comply with the requirements of the Japanese Travel Agency Act.
The law provides for the following:
- – the travel agency is required to obtain one of the licenses provided by this act (there are 4 types of licenses);
- – to deposit the amount of money necessary as a guarantee for obtaining the travel agency license;
- – the company’s Articles of Association must specify that the main object of activity of the company is tourism;
- – the company must appoint a certified travel manager or supervisor who must operate at the headquarters of the company.
Foreign investors who want to open travel agencies in Japan must first obtain a residence permit and then can start the registration procedures. All the requirements related to setting up a business as a foreign investor can be explained by our Japanese company formation specialists who can also offer assistance in incorporating any type of company in a chosen business field.
Steps for opening a travel agency in Japan
When setting up a travel agency in Japan, entrepreneurs have to decide first on the type of business entity they want to open.
A popular type of company in this country is the limited liability company, however other business entities are also available.
A company in Japan is subject to the corporate income tax, the consumption tax and other taxes.
Foreign investors sometimes want to avoid setting up a new company and choose instead to open a branch or a subsidiary in Japan. Our Japan company formationagents can offer assistance in opening such a business entity in the country.
Residing in Japan for foreign investors who open a travel agency is possible, however, one will need to observe all of the ongoing requirements for entry and lawful stay, as required by the authorities, namely the Immigration Services Agency of Japan. Our team can give you more information about mid to long-term Japan residence, if you are interested in remaining in the country for business purposes.
Investors who remain in the country for a number of years and comply with a set of criteria (such as having sufficient income, showing good conduct, and other requirements), can apply for permanent residence and, should they wish to renounce their current nationality, even apply for citizenship by naturalization. Our team can give you more details about Japan immigration.
How to obtain a travel agency license in Japan
As mentioned earlier, there are 4 types of licenses which can be obtained when opening a travel agency in Japan. These are:
- – the class 1 travel operator license which is issued by the Japan Association of Travel Agents Commissioner;
- – the class 2 travel operator license which is issued by the municipality of the city in which the company will operate;
- – the class 3 travel operator license which is issued by the municipality in the city the company will operate;
- – the travel agency license which is issued, by the local authority, just like in the case of the class 2 and 3 travel operator licenses;
Those who want to open a company in Japan which will operate as a travel agency should know that under each type of license only specific operations can be completed.
- – Under the class 1 license, a Japanese tour operator can offer both inbound and outbound tourism packages. The company can also organize customized tours and can make travel arrangements for tourists.
- – Under the class 2 license, the travel agency can only offer inbound and customized tourism packages.
- – Under the class 3 license, a Japanese travel agency can only organize inbound tourism activities within the limits of the region it will operate in. These limits will be imposed by the governor of the region when issuing the license.
- – Under the class 4 license, a travel agency is only allowed to subcontract both inbound and outbound packages from the agencies holding any of the 3 licenses mentioned above.
Guarantee requirements for travel agencies in Japan
Under the Travel Agency Act, those who open tour operators in Japan are required to deposit a guarantee or a bond which will ensure the tourism packages they sell are covered in case of any wrongdoing. The guarantee to be deposited depends on the type of license the travel agency has applied for. The only types of tour operators which do not need a bond are the holders of class 4 licenses.
The requirements for the other types of travel agency license holders are as follows:
- – a guarantee of 70,000,000 JPY and the standard share capital of 30,000,000 JPY which can be expressed in cash or kind must be deposited for a class 1 license;
- – a guarantee of 11,000,000 JPY and the standard share capital of 7,000,000 JPY must be deposited for a class 2 license;
- – a security of 3,000,000 JPY and a standard share capital of 3,000,000 JPY is required for a class 3 license.
Another important aspect which needs to be considered is that of the certified travel manager or supervisor who must be hired by travel agencies in Japan. This requirement applies to class 1, 2 and 3 license holders. The manager must be certified by the Japan Association of Travel Agents. In the case of travel agencies with more than 10 employees, 2 certified managers must be appointed.
Those who want to set up sole proprietorships in order to operate as tour operators in Japan must obtain the travel supervisor certification themselves.
The tourism industry in Japan
As an important hub for commerce, technology, popular culture, cuisine and shopping, Japan relies on a strong tourism industry.
The inbound tourism in the country increased by 33% per year from 2011 to 2015. In 2014, Japan was ranked the 22nd among all destinations in the entire world by the number of inbound tourists.
The inbound tourism represents an important element of the local government’s efforts to realize its economic GDP growth target of JPY 600 trillion by 2020.
In the second quarter of 2017, the number of tourists who visited Japan increased to a record high of 7.2 million, most of them coming from the neighboring Asian countries.
From April to July of this year, the tourist numbers increased by 21.1% compared to the same months of last year, as the Japan Tourism Agency declared.
The tourist spending during these months rose 13% year-on-year to a record JPY 1.8 trillion (USD 15.8 billion).
Our company registration agents in Japan can provide assistance related to opening a Japanese travel agency.
Our company formation representatives in Japan can provide you complete information related to starting a company in Japan. Please contact us if you have any questions. We remind foreign entrepreneurs that they can rely on our local specialists for company registration services no matter the industry you are interested in setting up a company in Japan.
We can also give you details about immigration to Japan.