Case Study: Starting a Nightclub

August 29th, 2011By Category: Starting a Business

There are no shortages of nightclubs and bars in Tokyo, but what sort of legal compliance is required in Japan to operate your own establishment? While considerable literature on the subject is available, much of it is written in Japanese and documents for submission to the authorities must be completed in Japanese. This article gives a quick overview of some of the administrative procedures needed to start a nightclub in Tokyo. (This is intended just as general reference and actual required permits may vary from case to case. Please consult with a specialist if you are unsure).

Company Incorporation

In this case a stock company (kabushiki kaisha) was incorporated to operate the establishment.  This was done mainly to limit liability to the invested amount and allow for easier future raising of funds as well as for various tax reasons.

Acquisition of Permits and Business License

Incorporating a company to operate the establishment alone is insufficient. There are a myriad of business permits and licenses issued by the Japanese authorities, a few of which are required to operate a nightclub type establishment. In this case, two permits were acquired, a Restaurant Operation Permit (inshokuten eigyo kyoka) and a Late Night Liquor Serving Establishment Permit (shinya eigyo kyoka), the latter being a requirement for liquor serving establishments operating past midnight.

Restaurant Operation Permit
(inshokuten eigyo kyoka)

Without going into much detail in this article, in order to open for business, an application must be filed with the local Health Department office. The establishment must then be built to conform with regulations set forth by authorities and the Restaurant Operation Permit needs to be acquired. It is highly advised that these regulations, for example, the proximity of the kitchen facilities to washrooms, are checked carefully prior to commencing any interior construction to avoid later troubles.

Late Night Liquor Serving Establishment Permit
(shinya eigyo kyoka)

What nightclub closes before midnight? Liquor-serving establishments intending to operate into the early morning are required to submit a notification to local police authorities at least ten (10) days prior to opening day. Factors for consideration when submitting this notice include the proximity of the establishment to residential areas and the size and layout of the facility.

As with incorporation, while anyone can apply for these permits, negotiating with Japanese authorities in Japanese, and completing all procedures and paperwork can be very difficult and working with experts is recommended. Shinonome Group is a legal services firm in Tokyo that provides incorporation and business consulting services including permit acquisitions in English.

If you are interested in finding out more, contact Shinonome Group here.

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Author of this article

Shinonome Group

Shinonome Group provides counsel on a range of matters including business and commercial, immigration and visa, real estate, and estate planning and administration issues in Japan. Our goal is to achieve workable solutions quickly, accurately and professionally. We possess both the business knowledge and the legal expertise required to successfully handle a wide spectrum of issues.

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