Construction Business License in Japan: Requirements for Foreign Firms

To operate a construction business in Japan, you need a license under Article 3 of the Construction Business Act (建設業許可) unless you take on only minor construction work. To obtain a license, you must meet requirements on management structure, engineers, social insurance, financial foundation and more. Foreign-owned companies are reviewed against the same requirements, and relying on experience gained overseas requires approval from the Minister of Land, Infrastructure, Transport and Tourism.

Which construction work requires a license

A license is not needed only if you take on nothing but “minor construction work”. The amounts are assessed including consumption tax.

• Splitting a contract to avoid the license requirement does not work; the total amount is what counts.
• If the client supplies materials, their price is included in the contract price for this assessment.
• Even if you take on only work that does not require a license, some provisions of the Construction Business Act still apply, such as the duty to put the terms of a construction contract in writing (Article 19).

Licenses are divided by type of work into 29 categories: two general categories, general civil engineering work and general building work, and 27 specialized categories. You obtain the categories that match the work you will take on.

Governor vs minister licenses, and general vs specified construction business

The licensing authority depends on where your offices are

• Prefectural governor’s license: when all business offices are in a single prefecture
• Minister’s license (Minister of Land, Infrastructure, Transport and Tourism): when there are business offices in two or more prefectures

The category is determined by the location of your business offices. Where work is carried out is not restricted, so a company with a governor’s license can take on work in other prefectures.

General vs specified depends on how much you subcontract

If, on work received as prime contractor, the total amount subcontracted is large, a “specified construction business” (特定建設業) license is required. A Cabinet Order amendment on 1 February 2025 raised this threshold to JPY 50 million or more (JPY 80 million or more for general building work). Otherwise, a “general construction business” (一般建設業) license is sufficient.

Requirements for a construction business license

There are five requirements. In addition, neither the company nor its officers may fall under any grounds for disqualification.

Management structure (full-time officers)

Following the October 2020 amendments, approaches that do not depend on a single person with management experience are also accepted. One such structure pairs a full-time officer who has a certain level of experience with assistants who have at least five years’ experience in financial management, labour management and business operations. Whichever approach you use, the experience must be evidenced with documents such as contracts and registration records. A newly established company will rely on experience its officers gained personally at other companies, so check early whether those companies can provide supporting documents.

Office-based engineers

These were previously called “dedicated engineers” (専任技術者). With the amended law taking effect on 13 December 2024, the name changed to “office-based engineers” (営業所技術者等), but the requirements themselves did not change. Eligible people hold a national qualification such as certified construction manager (施工管理技士) or have practical experience for the number of years set for each category. Qualifying on practical experience alone generally requires at least 10 years. For graduates of designated courses, this is shortened to at least five years after high school or at least three years after university.

Financial foundation

For a general construction business license, funds of JPY 5 million or more may be verified with a bank balance certificate or similar. For a specified construction business license, the assessment is based on the financial statements for the most recent fiscal year before the application, and it is reviewed again at each five-yearly renewal.

Substance of the business office

A business office is an office where estimates for and conclusion of construction contracts are handled on a regular basis. The authorities check that it has desks, telephones and other facilities and is separated from other companies and from living quarters. Photographs and a lease agreement are usually requested.

Grounds for disqualification

A license cannot be granted if the company, its officers or employees such as branch managers fall under any of the following. The same applies if the application contains false statements.

• Subject to an order commencing bankruptcy proceedings and not yet discharged
• Less than five years have passed since a construction business license was revoked
• Sentenced to imprisonment (拘禁刑) or a heavier penalty (including imprisonment with or without work, 懲役・禁錮, imposed under the system in place until May 2025), and less than five years have passed since completing the sentence or similar
• Being a member of an organized crime group or similar, or having business activities controlled by such members

Points for foreign-owned companies and foreign executives

Overseas experience requires the minister’s approval

The management structure and engineer requirements assume experience, education and qualifications obtained in Japan. To rely on experience or education from abroad, you must obtain approval from the Minister of Land, Infrastructure, Transport and Tourism. The Ministry (MLIT) reviews each case individually, and neither the person’s nationality nor whether the experience was gained at a Japanese or foreign company matters. Documents in foreign languages require translations. Gathering and translating supporting documents takes time, so prepare early.

Officers and engineers must be “full-time”

Full-time officers and office-based engineers must work full-time at the business office. Simply naming an officer of the parent company who lives overseas does not meet the requirement. Secure people who live in Japan and can engage in day-to-day operations. If foreign officers or engineers will work in Japan, they also need a status of residence (在留資格) that matches their activities.

Preparing documents and internal structures

• Include construction business in the business purposes in your articles of incorporation (定款) and registration. How to draft them is explained in How to write business purposes in the articles of incorporation.
• Social insurance enrolment is a license requirement, so complete the procedures immediately after incorporation. For who is covered and the deadlines, see Social and labour insurance enrolment duties.
• If you have foreign officers, you may be asked for certificates and translations in place of Japanese documents to check the grounds for disqualification. Confirm with the licensing authority in advance.

Accepting foreign workers on site

To accept foreign nationals under the Specified Skilled Worker (Construction) status, the company must hold a construction business license. There are also procedures specific to the construction sector, such as obtaining the Minister of Land, Infrastructure, Transport and Tourism’s approval of the acceptance plan. For the overall picture, see Requirements for accepting Specified Skilled Workers.

The application process and renewal

1. Decide the categories to obtain and whether you need a governor’s or minister’s license, and a general or specified license
2. Check the management structure, engineer, social insurance and financial foundation requirements
3. Collect contracts and invoices evidencing experience, qualification certificates, certificates of registered matters, bank balance certificates and other documents
4. Prepare the application and submit it to the prefecture for a governor’s license, or to the Regional Development Bureau or other designated office for a minister’s license
5. Following review, receive notice of the license

An application fee is charged for a governor’s license, and registration and license tax for a minister’s license. Review periods vary by authority.

A license is valid for five years. To continue operating, apply for renewal at least 30 days before the expiry date. If you apply within the deadline, the existing license remains valid after expiry until a decision is made. Once licensed, you must report your financial results within four months of the end of each business year. Changes of officers or office-based engineers must also be notified within the prescribed deadlines. A sign showing that you are licensed must be displayed at business offices and construction sites. Leaving a requirement unmet may lead to revocation of the license. To bid for public works, you must also undergo a management matters assessment (経営事項審査).

How TIMOA can help

Whether a construction business license is required depends on the contract amount and type of work, and an application must satisfy the management structure, engineer, social insurance and financial requirements together. For foreign-owned companies, the main challenges are obtaining the minister’s approval of overseas experience and securing officers and engineers who work full-time in Japan.

Working with partner administrative scriveners (行政書士) and labor and social security attorneys (社会保険労務士), TIMOA provides end-to-end support: checking requirements, setting up the company and designing its business purposes, social insurance procedures and preparing the license application. For details, see our Permits & Financial Licenses page.