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Ease of Doing Business in

Japan

Japan Download Profile (1996.9KB, pdf)
Region OECD high income
Income Category High income
Population 126,958,472
GNI Per Capita (US$) 36,680
City covered Tokyo, Osaka

190

1

DB 2017 Rank

1

100

DB 2017 DTF (% points)

  • local_library
  • group
Topics DB 2017 Rank DB 2016 Rank info_outline Change in Rank DB 2017 DTF (% points) info_outline DB 2016 DTF (% points) info_outline Change in DTF (% points) info_outline
Overall 34 32 down
2
75.53 75.36 down
0.17
Starting a Business 89 81 down
8
86.09 86.09
-
Dealing with Construction Permits 60 58 down
2
73.33 73.32 up
0.01
Getting Electricity 15 14 down
1
89.88 89.88
-
Registering Property 49 49
-
73.91 73.91
-
Getting Credit 82 78 down
4
50.00 50.00
-
Protecting Minority Investors 53 51 down
2
60.00 60.00
-
Paying Taxes 70 71 up
1
77.03 75.32 up
1.71
Trading across Borders 49 49
-
86.43 86.43
-
Enforcing Contracts 48 48
-
65.26 65.26
-
Resolving Insolvency 2 2
-
93.34 93.41 down
0.07

Positive= Doing Business reform making it easier to do business.Negative= Change making it more difficult to do business.

Viewing the data for

DB 2017 DTF (% points):

73.33

DB 2016 DTF (% points):

73.32

Change in DTF (% points):

up0.01

STANDARDIZED WAREHOUSE
Estimated value of warehouse JPY 204,714,347
City Tokyo
Indicator Tokyo OECD high income
Procedures (number) info_outline 12 12.1
Time (days) info_outline 197 152.1
Cost (% of warehouse value) info_outline 0.5 1.6
Building quality control index (0-15) info_outline 11 11.3
  • Measure of efficiency
    No. Procedure Time to Complete Associated Costs
    1

    Obtain consent of neighborhood

    Agency: Local Authority

    Obtaining neighborhood consent can be carried out simultaneously with the previous procedure. The initial step is to post a sign with specific information about the planned construction on the plot. Thereafter, BuildCo must obtain the endorsement of all neighbors (companies) stating that they do not object to the construction of the warehouse.

    30 days no charge
    * 2

    Hold initial consultation with local authority

    Agency: Local Authority

    BuildCo must have clearance at the initial consultation phase with at least 14 different departments at the prefecture level. Due to stricter requirements of compliance with construction regulations, the process now takes around 24 days. The purpose of this consultation is to avoid the risk of resubmitting the application for the actual building permit which if submitted wrongly, or some parts require alteration, the process can take another 2 -- 3 months. Closer scrutiny is paid to the structural component of the drawings and plans. The rules require an engineer to resubmit an entire construction plan, even to change a peg or location of windows.

    24 days no charge
    3

    Obtain building permit from Japan Building Center

    Agency: Japan Building Center

    After the initial consultation with the local authority, BuildCo must submit a building permit application. The local authority examines the application and issues the building permit.

    Normally, architects submit the application on behalf of their clients. The Fire Office is also involved in the permit examination process. The application must be amended when any changes are made after the building permit is obtained. In addition, a change permit must be obtained prior to final inspection by local authorities.

    After the falsification of structural calculation of buildings by former Architect Aneha became public knowledge in November 2005, many Japanese local authorities and private inspection companies have had to spend extra time checking structural design documents in new applications. This situation is still very much true in many parts of Japan. There is also a spill-over effect on site inspections by privatized control institutions, and it is likely that the Japanese government will introduce more frequent and thorough inspection procedures in building construction in the near future. Building permit review and approval procedures became very stringent since the new Building regulation as of June 20, 2007. As of June 2007 any project exceeding 1,000 sq. m. will require a peer review process by an independent authorized structural engineer/agency. The engineers are generally hired by the Building Department to undertake this review. However, the amount of work and backlog on one hand and the number of available professionals on the other hand willing to work extra hours on the weekends has caused delays. The peer review may take about 30 days in addition to the 50 days of building permit review period. In simpler cases the process may take on average 70 days.

    70 days JPY 225,000
    * 4

    Request and obtain workmen’s compensation insurance proof from Labor Control Office

    Agency: Labor Control Office

    The Labor Control Office verifies worker compensation insurance for all companies annually. No cost is incurred for obtaining confirmation. Once a contractor obtains confirmation and insurance, it is valid for one year for any project of the contractor’s company. Application for worker compensation insurance is made with the local labor control office. The applicant must comply with the registration criteria. A worker compensation insurance fee must be paid within 50 days after the application is filed. Worker compensation insurance is valid for a year, and it must be extended every year between April 1 and May 20. The insurance cost is 2.05% of the company's total personnel costs (1.25% paid by employer, 0.8% paid by employee).

    60 days no charge
    5

    Purchase and post statutory construction notice sign board

    Agency: Local Authority

    The construction notice sign board should include the following information:
    • Construction company registry certificate number
    • Proof of worker compensation insurance
    • Building permit number
    • Name of client, designer, contractor, project name, address, the person in charge, etc.

    1 day JPY 50,000
    6

    Submit construction method plan to local authority and obtain approval

    Agency: Local Authority

    The construction method plan is submitted to the local authority for a crosscheck with the project drawings and to fill out the necessary application form.

    7 days no charge
    7

    Submit project safety and health and resources recycling plan to local authority and obtain approval

    Agency: Local Authority

    The design drawings, construction schedule, method statement, and building permit are required for this application. The application must be submitted 7 days before construction work starts.

    7 days no charge
    8

    Receive intermediate inspection by Japan Building Center and obtain permit

    Agency: Japan Building Center

    The Japan Building Center (a privatized building control institution) and the Fire Office inspect structural conditions and conduct new building position surveys when the construction is half-completed. The inspection usually takes one day and construction work can continue if there are no serious irregularities. However, if there are any mistakes, construction work is suspended until proper measures are taken. An intermediate building permit is issued within 2 to 3 weeks.

    24 days JPY 211,000
    9

    Request and receive connection to water and sewage services

    Agency: Tokyo Water Company

    The installation cost is included in water and sewerage charges.

    21 days no charge
    10

    Request and receive final inspection from Japan Building Center

    Agency: Japan Building Center

    BuildCo requests the inspection. After the completion of the inspection, the certificate is issued within 3 business days. If there are any outstanding issues pointed out by inspectors, remedial work must be completed and the building re-inspected before the completion certificate is issued.

    The completion certificate is required to start occupying and using the building. This certificate is distinct from the land and building registration with the local authorities, and can be issued by the local authorities or by any of the authorized institutions at a very similar cost.

    7 days JPY 220,000
    11

    Obtain completion certificate

    Agency: Japan Building Center

    18 days no charge
    12

    Register the building with the Land and Building Registry

    Agency: Land and Building Registry

    The building registration involves two steps. First, the description of the building should be registered (usually through a notary public). This part cannot be done by BuildCo or its lawyer. No formal registration cost is required.

    Second, proof of building ownership should be registered. It takes about 10 to 14 days for the registration to be completed. The cost of proof of building ownership registration varies depending on the value of the building (0.2% of the building’s taxable value).

    12 days JPY 409,429

    * Takes place simultaneously with previous procedure.

  • Measure of quality
    Answer Score
    Building quality control index (0-15) 11.0
    Quality of building regulations index (0-2) 2.0
    How accessible are building laws and regulations in your economy? (0-1) Available online; Free of charge. 1.0
    Which requirements for obtaining a building permit are clearly specified in the building regulations or on any accessible website, brochure or pamphlet? (0-1) List of required documents; Fees to be paid; Required preapprovals. 1.0
    Quality control before construction index (0-1) 1.0
    Which third-party entities are required by law to verify that the building plans are in compliance with existing building regulations? (0-1) Licensed architect; Licensed engineer. 1.0
    Quality control during construction index (0-3) 2.0
    What types of inspections (if any) are required by law to be carried out during construction? (0-2) Inspections by external engineer or firm; Inspections at various phases. 1.0
    Do legally mandated inspections occur in practice during construction? (0-1) Mandatory inspections are always done in practice. 1.0
    Quality control after construction index (0-3) 3.0
    Is there a final inspection required by law to verify that the building was built in accordance with the approved plans and regulations? (0-2) Yes, final inspection is done by government agency; Yes, in-house engineer submits report for final inspection; Yes, external engineer submits report for final inspection. 2.0
    Do legally mandated final inspections occur in practice? (0-1) Final inspection always occurs in practice. 1.0
    Liability and insurance regimes index (0-2) 1.0
    Which parties (if any) are held liable by law for structural flaws or problems in the building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1)  Architect or engineer; Construction company; Owner or investor. 1.0
    Which parties (if any) are required by law to obtain an insurance policy to cover possible structural flaws or problems in the building once it is in use (Latent Defect Liability Insurance or Decennial Insurance)? (0-1) No party is required by law to obtain insurance . 0.0
    Professional certifications index (0-4) 2.0
    What are the qualification requirements for the professional responsible for verifying that the architectural plans or drawings are in compliance with existing building regulations? (0-2) Minimum number of years of experience; University degree in architecture or engineering; Being a registered architect or engineer. 2.0
    What are the qualification requirements for the professional who supervises the construction on the ground? (0-2) Minimum number of years of experience; Being a registered architect or engineer; Passing a certification exam. 0.0