Starting a Business Involving Used Goods Requires  a Secondhand Dealer License

• Do you want to buy used cars in Japan for export to foreign countries?
• Do you want to buy used anime goods in Japan for sale overseas?
• Do you want to open a recycle shop?

In order to buy and sell  or export used goods such as old cars, used clothing, antique furniture, old books, used mobile phones and the like,  as a business, it is first necessary to obtain authorization from the public safety commission (i.e., the police station) to operate as a secondhand dealer. 

Since you can be punished for engaging in illegal business activities if you do not obtain a secondhand dealer license, please be sure to take the necessary steps to get one. In particular, foreign nationals may be subject to mandatory deportation proceedings or difficulty in getting authorization to renew their resident status (i.e., visa status) due to such illegal business activities. This means that the foreign national is at risk of not being able to remain in Japan. To avoid this situation, be sure to get a secondhand dealer license before starting your secondhand dealer business.

Applying for a secondhand license itself is not very difficult compared to obtaining licenses for other types of businesses; however, it takes about 30 to 40 days from submitting the application for a secondhand dealer license until the license is actually granted. 

Reasons Why Secondhand Dealer Licenses are Necessary

What a secondhand dealer handles are used goods. Since it is possible for used goods to get mixed in with stolen goods, the secondhand dealer license system serves the two purposes of preventing the mixing of used goods with stolen goods in the chain of distribution and that of allowing the police to quickly discover when this mixing actually does occur. 

For this reason, the second-hand dealers are subject to obligations to verify their identity and keep records of their transactions. The failure to fulfill these obligations can result in business suspension or cancelation of the license. 

Unique Problems Facing Foreign Nationals Engaged in the Used Goods Business

To operate a secondhand goods business, there must be a manager at each secondhand store (or place of business). The “manager” can also simultaneously serve as the representative director or a director. For this reason, from the perspective of a foreign national who is setting up a company by himself or herself, serving as both a manager of the secondhand shop and a representative director or director of the company at the same looks good. However, the foreign national may not always be recognized as a “manager” from an immigration perspective. 

Since the manager is responsible for operating the place where the used goods are sold, the manager must reside in Japan.  Even if the representative director and all the directors do not reside in Japan, they can still set up a company and engage in business. However, in the case of such a company, it is necessary to have a person residing in Japan as a manager of the secondhand goods business.

In addition, as mentioned earlier, the second-hand dealers are subject to obligations to verify their identity and keep records of their transactions. Further, there are likely to be inquiries from the police during an investigation concerning stolen goods. For this reason, to obtain a secondhand dealer license, the applicant must be able to understand Japanese from a practical perspective. 

The minimum level of Japanese language proficiency required is the ability to record transactions in Japanese and respond to any police inquiries in Japanese. If the Japanese language ability of the representative director and other foreign national directors is insufficient, the manager of the place of sales needs to be able to do business in Japanese. For these reasons, it makes sense to hire Japanese employees and make one of them a manager. 

Foreign nationals may find the application for a secondhand dealer license to be unexpectedly difficult since all documents must be prepared and submitted in Japanese.  Kobe Legal Partners provides one-stop service for setting up a company, visa applications, and applications for secondhand dealer licenses.
Please note that we only accept requests from Kobe City and its neighboring areas, as the application for secondhand dealer license requires a personal visit to the police station.