Japan has been experiencing an inbound tourist boom for the past few years, with foreign tourists flooding Japan’s sightseeing places. This could possibly be a good business opportunity for those looking to start up a travel agency business in Japan.
However, operating a travel agency in Japan requires obtaining a travel agency registration, and the barriers to entry are surprisingly high. This article explores what you need to know and what you need to do to register as a travel agency business.
Requirements for a Travel Agency Business Registration
In Japan, you need to register as a travel agency business in order to start and operate a travel agency. The type of travel agency business registration that you need depends on the type of travel business services that you want to operate, such as providing package tours, arranging personal travel services, or selling travel products. You must obtain the appropriate registration that accurately reflects the travel services that you will offer.
Please note that anyone who operates a travel agency without the appropriate registration is subject to imprisonment for up to one year or a fine of up to 1 million yen, or both. To avoid that, make sure that you register as a travel agency before starting a travel agency business.
Types of Registrations for Travel Agency Businesses
In Japan, there are numerous types of registrations for travel agency businesses. Each registration has a different permitted scope of business.
Type 1 Travel Agency Business
As the most comprehensive license, the Type 1 license covers all types of travel services, including the following:
- Domestic and international package tours
- Customized travel planning services
- Travel arrangement services
- Resale of other travel agencies’ products
This license is ideal for large-scale businesses that plan to provide comprehensive travel services both domestically and internationally.
Type 2 Travel Agency Business
This license covers most travel services, except for international package tours organized by the company itself:
- Domestic package tours (planning and implementation)
- Customized travel planning services (domestic and foreign)
- Travel arrangement services
- Resale of other travel agencies’ products
Although this license does not allow you to create your own foreign package tours, you can arrange overseas travel and sell overseas tours created by other companies.
Type 3 Travel Agency Business
This license excludes domestic package tours, but allows you to do the following：
- Customized travel planning services (domestic and foreign)
- Travel arrangement services
- Resale of other travel agencies’ products
- Limited package tours within local areas and neighboring municipalities
This option is suitable for businesses that focus on arranging individual travel rather than group tours.
Regionally limited travel agency
This license limits operations to local areas and is suitable for small-scale, regionally focused travel businesses.
Affiliated travel operator
This license only allows you to resell travel products created by other companies. You are not allowed to create your own travel packages, but you can act as an authorized agent for an existing travel company.
Requirements for registration
To obtain travel business registration in Japan, you must meet several requirements. The important things are having qualified personnel, asset requirements, and operating security deposits.
Qualifications for a certified travel supervisor
When registering as a travel agency, all business establishments must have at least one qualified person who is a certified travel supervisor. There are three categories of travel agency managers, and the qualified person has to be assigned to the sales office.
- Comprehensive certified travel supervisor: Qualifications for handling both domestic and overseas travel
- Domestic certified travel supervisor: Qualifications only for handling domestic travel
- Limited certified travel supervisor: Qualifications to be appointed at a place of business that plans and sells travel products targeted for a certain region.
Minimum asset requirements
There are standard asset requirements for travel business registrations to confirm that the applicant has sufficient assets to properly run the travel agency business.
- Type 1: Assets of 30 million yen
- Type 2: Assets of 7 million yen
- Type 3: Assets of 3 million yen
- Regionally Limited: Assets of 1 million yen
Business security deposit
In order to protect travelers who have entered into transactions with travel agencies or travel agency agents regarding travel services, the Travel Agency Act requires travel agencies to deposit a certain amount of money as a business security bond.
- Type 1：70 million yen
- Type 2：11 million yen
- Type 3：3 million yen
- Regionally Limited：150,000 yen
However, joining a travel industry association can significantly reduce these deposit requirements.
Membership options for trade associations
Most travel agencies join one of the major industry associations to reduce their operating deposit requirements and obtain industry support. Please note that joining a travel agency association requires an admission fee and annual membership fee.
Compensation security bond deposit (alternative to the business security deposit)
- Type 1：At least 14 million yen
- Type 2：At least 2.2 million yen
- Type 3：At least 600,000 yen
- Regionally Limited：At least 30,000 yen
Travel Business Registration Application Procedure
Applications for travel agencies must be registered with the following administrative agencies depending on the type of travel agency to be registered.
- Type 1 license: Japan Tourism Agency
- Type 2, Type 3, and regionally limited licenses: Governor of the prefecture where the head office is located
The vetting process usually takes 2-3 months.
Summary
It seems that many foreign entrepreneurs are considering setting up travel agencies in Japan to take advantage of the inbound boom. However, as you can see, entering the travel industry is surprisingly complex.
In particular, even if you establish a new travel agency in Japan from abroad, it may be difficult to hire a travel agency manager in Japan. Probably hiring a travel agency with proper credential may be the biggest challenge.
Please note that our office is not able to introduce you to persons with the necessary credentials. As such, we are unable to respond to requests for referrals of travel agency managers.
As you can see, opening a travel agency in Japan is not without its challenges, so be sure to prepare thoroughly in advance.