Deep dive into licenses and corporate structure for accommodation businesses in Japan 🛌

I promised before to write about accommodation (hotel, guesthouse) licenses in Japan as well as the ideal corporate structures for this, and I’ve finally been able to put it together! Other than that, I have a few life tips for Japan and Taiwan, so please read on! I’ve started my cycle of going back and forth between the two countries now that the weather has cooled down a bit in Taiwan.

Table of Contents

• Paying on Mercari with Foreign Credit Cards 💳

• Discounted airport lugggage delivery perks in Japa …

• Japan Driver’s license foreign conversion test cha …

• HSBC Taiwan Premier Management Fee Waiver Issue 🏦

• 🏨 Accommodation Licenses in Japan and Company str …

  • License types (Guesthouse vs. Hotel)

    • Guesthouse licenses (民泊, minpaku)

  • 🏢 Company Structures and Licensing

    • Direct Foreign Ownership

    • Japanese Company Ownership

      • Advantages of the GK structure

      • Ownership with a KK (株式会社, kabushiki gaisha) struc …

    • Various GK ownership structures and implications

      • GK Owned by a Foreign Company

      • GK (合同会社, gōdō gaisha) + TK (匿名組合, tokumei kumiai) …

      • Foreign LLC in a TK — Considerations

      • Filing a SPBQII exemption for the GK + TK structur …

    • Structure Summaries & Comparison

      • Plain GK

      • GK owned by Foreign LLC

      • GK + TK (合同会社＋匿名組合)

      • GK + Foreign LLC as TK

  • Conclusions

Paying on Mercari with Foreign Credit Cards 💳

If you’re an expat in Japan, you’ve probably noticed that Mercari doesn’t usually accept foreign credit cards — even ones that work fine elsewhere online. However, there’s a useful workaround: Apple Pay on iPhone.

By adding your foreign Amex card to Apple Pay, you can often check out successfully on Mercari, even if the same card is rejected when entered manually. Visa and Mastercard tend to be less reliable with this method, but it’s still worth a try.

This workaround is especially helpful for expats who don’t yet have a Japanese bank account or credit card, and just want an easier way to buy secondhand goods locally. Or if you want to earn points on your foreign credit cards instead of the comparatively poor rewards on Japanese cards.

Discounted airport lugggage delivery perks in Japan 🧳

I wrote previously about how many American Express cards in Japan offer free airport luggage delivery. However, only suitcases and golf bags qualify, and other types of luggage including boxes don’t. What I didn’t realize until recently is that many other cards in Japan also offer free or discounted luggage delivery (手荷物宅配優待サービス, tenimotsu takuhai yūtai sābisu), not just Amex, and they don’t have the same restriction on luggage type. It seems like the scheme varies, but usually Gold level cards will allow you to send at least 1 piece of luggage for 500 yen on arrival in Japan, and beyond 1 piece they may offer a 15-20% discount. For sending to the airport when departing on an international trip, it seems to be a 15-20% discount. For exact details, check your card benefits page.

The general restrictions for accepted luggage types are: baggage or cardboard boxes with a total dimensions of 160cm and maximum weight of 30kg. Golf bags, ski and snowboard bags are considered to be meet the total dimensions even if larger as long as they weigh less than 30kg.

I discovered this firsthand; when I landed recently in Haneda with a suitcase and a big box, my ANA Amex Gold Card covered the suitcase, but not the box. The counter staff asked if I had a Gold Card — I showed my JAL Club-A Gold Card, and was able to ship the box home for only 500 yen. It’s a small perk, but worth remembering — especially when coming home with souvenirs or heavy gear.

Japan Driver’s license foreign conversion test changes 🚗🪪

Heads-up that converting a foreign driver’s license in Japan (外国免許の切替, gaikoku menkyo no kirikae) just got a lot tougher. If your home license isn’t from one of the “lucky 29” countries or U.S. states that can skip testing, brace yourself — the process has changed as of October 2025.

Again, the “lucky 29” countries and U.S. states that don’t have to take the written test or driving test are: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Luxembourg, Monaco, New Zealand, Norway, Poland, Portugal, Slovenia, South Korea, Spain, Sweden, Switzerland, Taiwan, The Netherlands, The United Kingdom, U.S. states (Colorado, Hawaii, Indiana (written test is required but not the driving test), Maryland, Ohio, Oregon, Virginia, Washington).

Document Check Now Limited to Mornings: Appointments for document checks are now only available before noon.

Knowledge Test Is Much Harder: Once your documents are approved, you’ll take the written exam in the afternoon — and it’s no longer the easy 10-question quiz.

• Old Test: 10 questions, 70 % passing score

• New Test: 50 challenging questions, 90% required to pass

Results come out at 3 PM, and if you fail, you’ll need to book another appointment for a retake. In short: expect longer waits, stricter scheduling, and a much more demanding written test.

HSBC Taiwan Premier Management Fee Waiver Issue 🏦

Recently, I was surprised to see a 1,000 NTD account maintenance fee (管理費, guǎnlǐ fèi) appear on my HSBC Taiwan account (匯豐銀行, Huìfēng Yínháng) — something that had never happened before in the 2 years of having the account. According to HSBC’s International Services page, this fee is normally waived if you meet the Premier balance threshold in one destination, but apparently, my accounts weren’t linked correctly and suddenly started incurring this fee in Taiwan. Otherwise I would have to maintain 3 million NTD (~$100,000 USD) in my bank account here, which I don’t find worth it without access to good investments.

I had previously written about fee-free banking with HSBC, and this experience was a good reminder that international linkage between accounts doesn’t always stay in sync.

Here’s how I fixed it (all through digital means, no phone calls or branch visits required!):

1. Contacted customer support through the Taiwan HSBC app chat function — note that their live chat only operates between 9 AM and 5 PM (Taiwan time).

2. They asked whether my U.S. HSBC account was set as the primary for my global Premier relationship.

3. I opened the U.S. HSBC app (which has 24-hour support) and confirmed that it wasn’t — they quickly set it as primary.

4. The U.S. team advised me to contact Taiwan again and ask them to update my status to “HSBC Premier International” and apply the fee-waiver code.

After I sent a message to Taiwan HSBC through the app explaining that my U.S. account was now primary, they reviewed it and confirmed they would refund the fee, though since I made this request at the end of the month, it would take until the end of the following month to refund once they confirmed the setup.

If you hold multiple HSBC Premier accounts across countries, it’s worth double-checking which one is marked as primary — a small detail that can save you from unnecessary fees.

🏨 Accommodation Licenses in Japan and Company structures

This deep dive is from my own experience and research running ski lodges in Japan. However, please do not take my word as canonical - you should use it as a starting guide but please consult professional help before making final decisions.

License types (Guesthouse vs. Hotel)

Guesthouse licenses (民泊, minpaku)

In Japan, there are two main types of guesthouse (民泊, minpaku) licenses. Both types are subject to an annual limit of 180 days of guest stays per property, regardless of occupancy rate or operator type.

1. Owner lives on-site — generally used for small guesthouses.

   • Requirements are minimal: the owner must live on the property and install basic fire detection equipment (smoke detectors and fire extinguishers).

   • The application process is simple and inexpensive, typically under ¥50,000–¥100,000 in administrative fees depending on the municipality.

2. Owner does not live on-site — also for guesthouses, but significantly more complex.

   • You must engage a licensed professional property management company (管理業者, kanri gyōsha) with the proper hospitality and real estate certifications.

   • These management companies must hold special licenses that require passing an industry exam — a process that can take several months.

   • Fire safety equipment and local inspections are required.

   • Because the owner cannot self-manage, this structure requires contracting with a 3rd-party licensed manager, who typically charges a percentage of gross revenue (around 20–30%).

   • Including fees for inspection, certification, and management, the total setup cost usually ranges from ¥300,000–¥800,000 depending on the region and property size.

Hotel licenses

It’s often easier to obtain a hotel license (旅館業許可, ryokan-gyō kyoka) instead of a minpaku license.

• Hotel licenses have far fewer restrictions, provided the building meets hotel construction standards.

• One weird restriction: self-heating baths are not allowed.

• No professional licensing is required — you can form a company and register the hotel license under that company (the company must own the property).

• There are no limits on the number of operating days, and government audits are minimal.

• Front-desk staffing is only required for larger hotels (thresholds vary).

• There are no annual renewal fees.

• The application process is straightforward: apply, get an inspection, submit paperwork, and pay local taxes.

  The total cost is generally under ¥500,000.

🏢 Company Structures and Licensing

Direct Foreign Ownership

Foreign individuals or foreign companies can directly own Japanese real estate, and there are currently no restrictions on this. However, they cannot obtain a minpaku or hotel license in their own name if they are based outside of Japan, only if the foreign individual is based in Japan.

You would need a third-party licensed operator to hold the license and remit payments to you abroad. Distributions to the foreign entity incur a 20.42% withholding tax, and operators usually charge 20–30% of revenue, so this can be expensive.

Keep abreast of the news though; with the increasing anti-foreigner sentiment in Japan, restrictions may eventual come on direct foreign ownership of property.

Japanese Company Ownership

Forming a Japanese company allows the license to be held directly.

• 合同会社 (GK, gōdō gaisha) — similar to an LLC; flexible and tax-efficient.

• 株式会社 (KK, kabushiki gaisha) — similar to a C-Corp; not a pass-through entity, but may appear more formal for investors.

• Can read the following article for the difference between the two not delving into tax treatment and how this would affect real estate dividends.

Advantages of the GK structure

• GK members can be paid salary (給与, kyūyo) and bonus (賞与, shōyo) even before profits are made.

• Japanese payroll is required, and salary/bonus amounts must be set early in the fiscal year (within ≈ two months).

• Additional bonuses can be paid later if they are pre-declared and paid on the exact declared date — otherwise they are not tax-deductible.

There are some downsides to the GK structure, you can see a previous post.

Ownership with a KK (株式会社, kabushiki gaisha) structure

Legal and operational side:

• A KK can hold real estate, operate hotels, and apply for 旅館業許可 (ryokan-gyō kyoka) or 民泊 (minpaku) licenses just like a GK.

• Banks, insurance companies, and larger investors often see a KK as slightly more “established” or stable, which can help with financing or brand perception.

• Governance is heavier: you need shareholders’ meetings, board resolutions (if applicable), and annual filings.

Tax treatment

• A KK pays corporate income tax on profits, then any dividends to shareholders are taxed again with Japanese withholding (usually 15 – 20 %).

• You cannot easily pay pre-profit salary to owner-shareholders unless they’re on Japanese payroll, so foreign owners usually receive after-tax dividends instead.

• Unlike a GK, there is no pass-through or flexible distribution structure—everything flows through corporate profits and dividends.

When KK ownership makes sense

• You’re aiming for institutional credibility—e.g., working with banks, large OTAs, or selling the property company later.

• You expect to raise capital via equity rather than TK-style contracts.

• You don’t need the pass-through flexibility of a GK + TK structure.

When it’s a disadvantage

• Less flexible for profit distribution.

• Higher compliance cost and double taxation.

• Harder to integrate with TK investment layers because the KK already represents an opaque tax entity.

Various GK ownership structures and implications

The below sections focus on GKs with various ownership structures as KKs do not have passthrough benefits.

GK Owned by a Foreign Company

This structure applies when a foreign company directly owns a Japanese GK (合同会社, gōdō gaisha) as its member. The tax treatment and compliance requirements depend on the tax treaty (租税条約, sozei jōyaku) between Japan and the foreign company’s country of residence.

• With the correct treaty and documentation, withholding tax (源泉徴収税, gensen chōshūzei) on distributions to the foreign parent can be reduced or eliminated.

• All distributions (分配金, bunpai-kin) are made after Japanese corporate tax is paid by the GK.

• To apply a reduced treaty rate, you must file an Application Form for Income Tax Convention (Dividends) — Form 1 (租税条約に関する届出書 様式１, sozei jōyaku ni kansuru todokede-sho yōshiki ichi) along with the associated Form 16 and Form 17, with the Japanese tax authorities.’

• If this filing is not made, the default 20.42% withholding tax applies.

All official forms and instructions are available here: National Tax Agency – Tax Convention Forms

For U.S. entities, you must first obtain Form 6166 (U.S. Residency Certification) from the IRS — proving that the entity (or its members, if a pass-through) are U.S. tax residents.

• This form is required for the Application Form for Income Tax Convention.

• Similar tax residency certificates are required for entities from other countries to claim treaty benefits.

• For U.S. LLCs, you must also prove that each member is a U.S. resident for tax purposes. Different countries may have different requirements around this.

With proper documentation, U.S. withholding tax on dividends and similar income can be reduced to 0% under the Japan–U.S. tax treaty.

⚠️ Tax Risk Note

Japan may treat a foreign company owning a Japanese real-estate company as having a permanent establishment (恒久的施設, kōkyūteki shisetsu) in Japan, making it taxable domestically.

This potential risk should be reviewed carefully with a tax advisor.

GK (合同会社, gōdō gaisha) + TK (匿名組合, tokumei kumiai) Structure

A TK (匿名組合, tokumei kumiai) — is a contractual investment partnership, not a separate legal entity.

This structure is designed primarily for individual or passive investors who contribute capital but do not participate in management.

• Profits can be distributed to TK investors post-tax, without withholding.

• TK members are treated purely as passive investors — they cannot participate in operations or decision-making.

• The GK (合同会社, gōdō gaisha) acts as the business operator and holds/operates the underlying assets.

• This structure is ideal for individual investors who want exposure without U.S. tax liability or Japanese regulatory burden.

There is generally no significant benefit to using a KK + TK structure instead, as the KK adds administrative complexity and potential double taxation without improving the underlying investment treatment.

Foreign LLC in a TK — Considerations

A foreign LLC (such as a U.S. LLC) can legally serve as a TK investor (匿名組合員, tokumei kumiai-in) in place of individuals.

This is common in cross-border fund setups, but requires careful attention to ownership and tax treatment.

Key points:

• The foreign LLC can act as a passive TK investor, allowing the GK to remain the sole operator (営業者, eigyōsha).

• Distributions from the GK to the TK remain post-tax and free from Japanese withholding, just as with individual investors.

• Some tax offices may ask for proof of treaty eligibility or no-Permanent Establishment status (恒久的施設なし, kōkyūteki shisetsu nashi), particularly for foreign LLCs, LPs, or funds.

• Submitting Application Form for Income Tax Convention - Form 1 (租税条約に関する届出書 様式１, sozei jōyaku ni kansuru todokede-sho yōshiki ichi) with a tax-residency certificate (e.g., IRS Form 6166) is a simple way to document the exemption proactively.

If the operator (GK member) also owns part of the foreign LLC acting as the TK, the separation between operator and investor becomes blurred.

This can undermine the TK’s “passive investor” status, potentially reclassifying income as business income and exposing it to additional Japanese tax obligations.

To avoid this, it’s best to keep the operator entirely separate from the foreign LLC — either by removing the operator from that LLC or ring-fencing ownership through a different entity.

This structure can be useful when pooling several foreign investors under one LLC, but only if the GK (operator) and TK (investor) remain legally and economically distinct.

Filing a SPBQII exemption for the GK + TK structure

If using the GK + TK (合同会社＋匿名組合, tokumei kumiai) structure for multiple investors, it’s recommended to file a Specially Permitted Business for Qualified Institutional Investors (特例業務届出, tokurei gyōmu todokede) — commonly called an SPBQII — with the Financial Services Agency (金融庁, Kin’yū-chō).

If you do not file this notice, your vehicle will be treated as a Type II Financial Instruments Business (第二種金融商品取引業, dai-nishu kinyū shōhin torihiki-gyō), which triggers substantial and expensive compliance obligations, such as:

• Mandatory registration as a licensed fund manager or securities operator under the Financial Instruments and Exchange Act (金融商品取引法, kinyū shōhin torihiki-hō).

• Appointment of compliance officers, establishment of internal control systems, and annual financial audits.

• Submission of regular filings and disclosure documents to regulators.

• Strict restrictions on investor solicitation and marketing activities without a license.

Filing under the SPBQII regime avoids those heavy obligations. Instead of full registration, you simply notify the FSA that you are conducting a private placement under limited conditions. It’s essentially a “light-touch” exemption for small private investment vehicles that only accept:

• Qualified Institutional Investors (適格機関投資家, tekikaku kikan tōshika), and

• A small number of non-institutional investors (generally fewer than 49).

If you skip SPBQII, you would need to partner with or hire a licensed fund management company (ファンド業者, fando gyōsha) — a costly and complex route that adds regulatory burden.

Because SPBQII sits between financial regulation and private contracting, many 司法書士 (shihō shoshi, judicial scriveners) are unfamiliar with the filing. You typically need support from a lawyer (弁護士, bengoshi) or specialized financial compliance consultant experienced in fund structuring and Financial Instruments and Exchange Act compliance to prepare and submit it properly. Unfortunately, I have not been able to find any judicial scriveners so far that are familiar with the process and haven’t followed up with any specialized consultants, so there’s further research to be done here.

Structure Summaries & Comparison

Plain GK

• Description: Individuals are direct members of the GK (合同会社).

• Main benefits:

  • Simple structure for small operators or owner-managed businesses.

  • Domestic members can be paid through Japanese payroll before tax, reducing corporate tax.

• Main drawbacks:

  • Paying foreign members adds complexity (withholding, Form 6 filings).

  • Distributions are made after corporate tax and subject to 20.42% withholding.

• Common use: Owner-operated businesses or single-property holding companies.

GK owned by Foreign LLC

• Description: The foreign LLC directly owns the GK as its sole or majority member.

• Main benefits:

  • Simple, direct corporate chain.

  • Easy to consolidate control and reporting.

  • No need for TK agreements.

• Main drawbacks:

  • Distributions become dividends, subject to Japanese withholding.

  • The foreign LLC’s home country may treat the GK as opaque (potential double taxation).

  • Salary or bonus payments to foreign managers trigger payroll/withholding obligations.

• Common use: Wholly-owned operating subsidiaries (e.g., U.S. parent owns Japanese GK directly).

GK + TK (合同会社＋匿名組合)

• Description: The GK operates the business; individual or foreign investors participate via a TK (tokumei kumiai) contract.

• Main benefits:

  • Clear separation between operator (GK) and investors (TK members).

  • No Japanese withholding on post-tax TK distributions.

  • Recognized, straightforward, and accepted structure in Japan.

• Main drawbacks:

  • TK members cannot join management.

  • The GK must first pay corporate tax before distributing profits.

  • Need to file SPBQII to avoid fund-manager licensing requirements.

• Common use: Domestic or mixed-investor real-estate and hospitality funds.

GK + Foreign LLC as TK

• Description: Same GK + TK framework, but the TK investor is a foreign LLC (e.g., U.S. LLC) representing multiple overseas investors.

• Main benefits:

  • Preserves investor separation and limited liability.

  • Post-tax TK distributions remain free of Japanese withholding.

  • Can be tax-efficient if the foreign LLC’s jurisdiction treats TK income as transparent.

• Main drawbacks:

  • Cross-border tax alignment is required (may cause mismatch taxation).

  • May need to file Application Form for Income Tax Convention - Form 1 + residency proof (e.g., IRS Form 6166) for treaty benefits.

  • Must avoid permanent-establishment risk if the foreign LLC influences operations.

• Common use: Cross-border private funds where investors remain passive but want direct exposure to Japanese assets.

Conclusions

This is a super complex topic - I am likely to have gotten something wrong, so please just use this as a base of research and seek professional help. Hopefully this deep dive was helpful though! You can always reach out at [email protected] for comments or questions! Remember, you can also support this publication by becoming a paid subscriber or a Patreon!