How to Start a Car Sales Business in Japan as a Foreigner: The Complete 2026 Guide (Domestic, Import & Export)

Japan's used car industry is one of the most remarkable business opportunities available to foreign entrepreneurs in the country — and one of the least discussed in English-language guides. The scale alone is staggering: over 7.5 million used vehicles are traded annually in Japan's domestic market, and the country exports more than 1.4 million used vehicles per year to destinations across Asia, the Middle East, Africa, Oceania, and beyond. Japanese used cars are globally renowned for their quality, low mileage relative to age, meticulous maintenance history, and the rigorous shaken inspection system that keeps vehicles roadworthy throughout their domestic life.

For a foreign entrepreneur, the car sales business in Japan can take several distinct forms — domestic used car retail, used car export to overseas buyers, importing foreign vehicles to sell in Japan's domestic market, or a combination of all three. Each model has different capital requirements, licensing demands, and profit dynamics.

What all of them have in common is the central piece of Japan's used goods trading legal framework: the Secondhand Dealer License (古物商許可, kobutsu-shō kyoka). Without this license, you cannot legally buy or sell used vehicles in Japan as a business, in any form. Getting this license right — before you incorporate, before you apply for your visa, and before you sign any lease for a business premises — is the single most important early step in this entire process.

This guide walks you through every path: the correct order of operations for incorporation, licensing and visa; how Japan's auto auction network works and how to access it; the mechanics of used car export; the realities of importing foreign vehicles; what it all costs; and how to finance the business.

Understanding the Market: Three Business Models

Before covering the legal framework, it is worth clearly defining the three primary business models available to foreign entrepreneurs in Japan's car trade. Many people enter this space with a vague sense of "buying and selling cars" — but the specific model you choose determines your licensing strategy, your location requirements, your capital needs, and your customer relationships.

Model 1: Domestic Used Car Retail

You source used vehicles from Japan's domestic auto auction network (or from individual sellers), display and sell them to buyers inside Japan. Your customers are Japanese residents and other foreign residents living in Japan. You operate a physical dealership lot or a showroom.

Suitable for: Entrepreneurs with strong Japanese language ability, Japan market knowledge, a physical premises in a good location, and an eye for what domestic Japanese buyers want. Also increasingly viable as an online-only model selling through platforms like Goo-net and Car Sensor.

Key challenge: Japan's domestic used car market is highly competitive. You are competing against established chains (Gulliver, IDOM, USS-affiliated dealers) and independent dealers with decades of local market knowledge. Differentiation through specialist inventory (imported European luxury cars, classic JDM vehicles, electric vehicles) or service quality (multilingual sales, foreigner-friendly purchasing support) is typically necessary to carve out a niche.

Model 2: Used Car Export (Japan → Overseas)

You source used vehicles through Japan's domestic auction network and sell them to buyers overseas — to dealers or individual importers in Southeast Asia, the Middle East, Africa, Eastern Europe, New Zealand, Australia, and elsewhere. Japan's used car export industry runs primarily on this B2B or B2C model, where you act as the Japan-based sourcing and logistics partner for overseas buyers.

Suitable for: Entrepreneurs with overseas buyer relationships, knowledge of destination market import regulations, and the operational capacity to manage vehicle logistics, deregistration, and export documentation. This is the most popular business model among foreign entrepreneurs in the Japan car trade, because it leverages Japan's extraordinary supply of high-quality used vehicles without requiring a premium domestic retail location.

Key advantage: The markup between Japan auction prices and overseas retail prices — particularly for markets in Sub-Saharan Africa, the Middle East, and South and Southeast Asia — can be significant. Japanese used vehicles are in consistent structural demand in these markets due to their quality and reliability reputation.

Model 3: Used Car Import (Overseas → Japan)

You source vehicles from overseas — European luxury vehicles, American muscle cars, Left-Hand Drive (LHD) specialist vehicles, classic cars — and sell them within Japan's domestic market. Japan has a genuine appetite for imported vehicles, particularly European brands (BMW, Mercedes-Benz, Audi, Porsche, Volkswagen) and certain American models, as well as a growing collector market for classic foreign vehicles.

Suitable for: Entrepreneurs with supplier relationships in the origin country, knowledge of Japan's vehicle compliance and registration requirements for imported vehicles, and access to the domestic Japanese buyer network for premium or specialty vehicles.

Key challenge: Japan's vehicle compliance system (homologation requirements, shaken compatibility, left-hand drive restrictions in some contexts) adds complexity and cost to importing foreign vehicles. This model typically requires the highest level of Japan-specific regulatory knowledge.

Most successful foreign car business operators in Japan eventually combine elements of all three models — sourcing domestically and selling both locally and overseas, while occasionally bringing in specialist imported inventory to differentiate their offering. The infrastructure (the Secondhand Dealer License, the company, the auction access, the yard or premises) is largely shared across models.

Step 1: The Critical Order of Operations

The most common and costly mistake foreign entrepreneurs make when entering the Japan car trade is doing things in the wrong order. The sequence matters enormously because each step has dependencies on the one before it, and errors discovered late in the process can require complete restarts.

The correct order is:

1. Plan your business model and confirm your business premises (or storage yard/parking arrangement)

2. Incorporate your company (KK or GK)

3. Apply for the Secondhand Dealer License — using your incorporated company's details and your confirmed premises address

4. Apply for the Business Manager Visa — using your incorporated company, your Secondhand Dealer License, and your complete business plan as supporting evidence

Why does this order matter? Because the Secondhand Dealer License application requires a confirmed business location with physical premises documentation. The Business Manager Visa application requires both the incorporated company and ideally the Secondhand Dealer License as proof that your business is legally operational. And company incorporation needs to happen before you can apply for either the license or the visa in the company's name.

Entrepreneurs who incorporate first, then discover their chosen office address does not satisfy the Secondhand Dealer License premises requirements, face expensive and time-consuming restarts. Get advice from an administrative scrivener (行政書士, gyōsei shoshi) experienced in car trade licensing before you commit to any premises or start any paperwork.

Step 2: Visa Requirements — Post-October 2025

As with every business visa topic in 2026, the October 2025 revisions to Japan's Business Manager Visa framework are the starting point.

Business Manager Visa (経営・管理ビザ) — 2026 Requirements

The Business Manager Visa is the standard immigration pathway for foreign nationals operating a car sales business in Japan. The October 16, 2025 revisions introduced requirements that are significantly more demanding than the previous framework:

Capital of ¥30 million. Your incorporated entity must demonstrate ¥30 million in registered capital. For a car sales business, this is a workable business funding level — auction purchases, stock inventory, premises deposits, and operating capital all draw from it — but it must be genuine equity capital, clearly documented through bank records and the company's registration certificate.

One full-time qualifying employee. You must employ at least one full-time worker who is a Japanese national, permanent resident, special permanent resident, or spouse of a Japanese/permanent resident. For the car trade, this employee requirement also has an important practical benefit: a Japanese-national employee who understands auction procedures, domestic registration paperwork, and supplier relationships dramatically eases the operational burden on a foreign owner learning the market.

Japanese language proficiency at JLPT N2 level. Either you or your qualifying employee must demonstrate this level. For a car sales business, operational Japanese — for auction participation, supplier communications, vehicle registration paperwork, and customer service in the domestic model — is essential regardless of the formal visa requirement.

Third-party business plan verification. A certified public accountant, registered administrative scrivener, or SME management consultant must evaluate and certify your business plan. For a car sales operation, this plan should include your sourcing strategy (which auction houses, at what volume), your sales model (domestic, export, or both), your target markets, your vehicle pricing and margin analysis, and your startup capital breakdown.

Genuine ongoing business activity. Car trade businesses are audited for actual activity — vehicles purchased, vehicles sold, revenue declared. A dormant company with no auction activity will not pass the renewal assessment under the October 2025 framework.

Startup Visa — The Smart First Step

If you are not yet at the ¥30 million capital threshold or want to enter Japan to research the market, build auction relationships, and prepare your business infrastructure before committing to full Business Manager Visa requirements, the Startup Visa provides up to two years of residence for business preparation.

During the Startup Visa period you can: visit auction houses, attend buyer orientation sessions, build relationships with gyōsei shoshi and logistics partners, research yard and premises options, and prepare your company incorporation. You cannot yet conduct revenue-generating transactions — but you can do almost everything else that sets the business up to succeed.

The Startup Visa is now available nationally through certified municipalities. Applications are processed through your chosen municipality's business support office. English-language support is available in major cities.

Already in Japan with Qualifying Residency?

Permanent residents, spouse visa holders, long-term residents, and others with unrestricted business activity permission can open a car sales business without the Business Manager Visa. The Secondhand Dealer License, company incorporation, and all operational steps apply equally — only the visa component is unnecessary for those already holding qualifying status.

Step 3: The Secondhand Dealer License (古物商許可) — The Core License

This is the most Japan-specific and least-understood element of the car sales business for foreign entrepreneurs. The Secondhand Dealer License — also known as the Antique Dealer License or Used Goods Dealer License — is issued under the Act on the Control of Businesses Receiving Used Articles (古物営業法, kobutsu eigyōhō). It is administered by the prefectural police, not a ministry or local government office.

Every business that buys and sells used goods in Japan — including used vehicles — is required to hold this license. This applies regardless of whether you are selling domestically, exporting to overseas buyers, or both. It applies to physical sales, online sales, and auction-based sourcing. Operating without it is a criminal offence punishable by up to three years imprisonment or a fine of up to ¥1 million, and it will result in visa revocation for Business Manager Visa holders.

The 13 Categories of Used Goods

The Secondhand Dealer License is divided into 13 business categories, each of which must be explicitly licensed. For a car sales business, the relevant categories are:

Category 7: Automobiles and related items (自動車の部品及び付属品) — Covers used vehicles, vehicle parts, and accessories. This is the primary category required for any car sales operation.

If you also plan to deal in motorcycles, scooters, or parts separately from vehicles, a separate category application may be required. If you trade in auto parts specifically — stripped parts from dismantled vehicles — confirm with your local police whether this falls under your vehicle category or requires additional categories.

Important for online and export operations: If you source vehicles through online auction platforms or buy from sellers across prefectural boundaries, your license must cover those activities. The license is tied to your business premises in the prefecture where you apply, but it covers your activities nationally.

Key Eligibility Requirements

To qualify for a Secondhand Dealer License as a foreign entrepreneur in Japan, all of the following must be true:

• You must not have been convicted of certain criminal offences within the past five years (including theft, fraud, receiving stolen property, drug offences)

• You must not have had a Secondhand Dealer License revoked within the past five years

• You must not be subject to an adult guardianship or curatorship order (meaning you must have full legal capacity to make business decisions)

• Your business premises must be a legitimate physical location that satisfies the police's requirements — a virtual office address is generally not acceptable

For foreign nationals specifically: your visa status must be confirmed and you must not be in a status of illegal stay or overstay. Foreigners who are not Japanese citizens must attach additional documentation including a translation of their written oath and identification of their residence status.

The Written Oath for Foreign Nationals

One of the most Japan-specific requirements for foreign applicants is the written oath (誓約書, seiyakusho) — a document where you formally pledge to comply with the provisions of the Used Articles Dealer Act. Foreign applicants must attach either a Japanese-language translation of the oath or include a certification statement below the signature line in the following format:

"The content of the oath was translated into [language] and I have signed it fully understanding its meaning. Translator [name] (signature/stamp)."

This oath is signed by both the business owner and the designated manager (管理者, kanrisha) of each business premises.

The Designated Manager (管理者)

Every business premises covered by the Secondhand Dealer License must designate a Manager — an individual responsible for day-to-day business operations at that location. The Manager must meet the same eligibility criteria as the license holder (no criminal history, no guardianship orders, etc.).

As the business owner, you can designate yourself as the Manager — but given the Japanese language requirements and the practical reality that auction participation, vehicle inspection, and registration paperwork all require Japanese operational fluency, having a qualified Japanese-speaking Manager is strongly advisable, particularly in the early phase of the business.

The Manager's appointment must be registered with the police as part of the license application and updated whenever the Manager changes. Failure to notify the police within the required timeframe of a Manager change is a compliance violation.

Required Documents for the License Application

The following documents are standard for a Secondhand Dealer License application. Requirements vary slightly by prefecture — confirm your specific list with the police station that will process your application.

For the corporation:

• Certificate of registered matters (登記事項証明書) — obtained from the Legal Affairs Bureau after company incorporation

• Articles of incorporation (定款)

• Confirmation that the business's stated purposes include used goods trading

For each individual (owner and manager):

• A written oath (誓約書) — with foreign-language certification for non-Japanese applicants

• Certificate of non-registered matters (登記されていないことの証明書) — confirming no adult guardianship or curatorship. Obtained from the Legal Affairs Bureau. For foreigners, this must be obtained at the Tokyo Legal Affairs Bureau (東京法務局) regardless of where you live, as it is only issued centrally.

• Biographical outline covering the last five years of work experience

• Residence card copy

• Juminhyō (residence certificate)

For the premises:

• Lease agreement or ownership documents for the business location

• For car sales specifically: documentation of vehicle storage capacity — a yard, parking lot, or storage agreement showing you have space to hold purchased vehicles

Application fee: ¥19,000 payable to the prefectural police.

Processing time: Approximately one to two months from application submission to license issuance. The police may request supplementary documents or additional explanations during this period — respond promptly to avoid delays.

The Premises Requirement — Critical for Car Dealers

For used car businesses specifically, the premises requirement has a nuance that trips up many applicants: you need to demonstrate that you have a physical location to store vehicles after purchase.

Unlike a general secondhand goods dealer who might store items in a warehouse, a car dealer must park vehicles somewhere. The police will verify that your storage location is:

• Physically accessible (an actual lot or yard, not a theoretical space)

• Reasonably proximate to your registered business address

• Legally available to you (a lease agreement or ownership document is required)

• Large enough to hold the vehicles you intend to stock

Exception for export-only models: There is a recognized exception for businesses that export purchased vehicles directly to a port yard (ヤード) without ever storing them at their own premises. If you have a contractual arrangement with a port-adjacent storage yard or a large-scale exporter who receives vehicles directly from the auction transport, this arrangement — with the yard's own contract as documentation — may be accepted in place of your own storage agreement. Confirm this exception with your specific prefectural police before relying on it, as not all police departments apply it uniformly.

Where to Apply

The application is submitted to the public safety commission via the prefectural police station that has jurisdiction over your registered business address — not your home address, but the business premises address you are registering. If your business address is in Tokyo's Shibuya Ward, you apply at the Shibuya Police Station's security division (生活安全課).

Given the complexity of the application for foreign nationals — the non-standard documents, the foreign-language oath certification, the police's unfamiliarity with international applicants — engaging a gyōsei shoshi with experience in Secondhand Dealer License applications for foreigners is strongly recommended. Professional fees for this service typically range from ¥80,000 to ¥200,000, but the service includes advance consultation with the police, preparation of all documents, and representation through the approval process.

Step 4: Company Incorporation

Incorporate your company before applying for the Secondhand Dealer License — the license application requires your company's registration certificate, which only exists after incorporation.

Kabushiki Kaisha (KK) vs. Godo Kaisha (GK)

The choice between these two corporate structures is covered in detail in our restaurant business guide, and the same principles apply here. The short version for a car sales business:

KK (株式会社): Higher setup cost (¥240,000+ in government fees plus professional fees), but greater institutional credibility. Japanese auction houses, particularly USS, TAA, and JU, look favorably on KK corporations when assessing membership applications. Major trading partners and overseas buyers may also expect a KK. Recommended for anyone planning to operate at meaningful volume (10+ cars per month) from the start.

GK (合同会社): Lower setup cost (¥60,000 in government fees), simpler ongoing administration. Acceptable for smaller-scale operations and those testing the market in the early phase. Can be converted to a KK later if the business scales.

Critical point: The company's articles of incorporation (定款) must explicitly list used goods trading and vehicle export/import among the stated business purposes. A company incorporated for a different stated purpose cannot hold a Secondhand Dealer License. If you are having your company incorporated by a service provider, confirm this specific business purpose is included in the drafting. Missing it is one of the most common and expensive mistakes in this process.

Incorporation timeline: Two to four weeks for a KK (including notarization), approximately two weeks for a GK.

Step 5: Accessing Japan's Auto Auction Network

Japan's domestic auto auction system is the world's largest and most structured. Understanding how it works — and how to gain access as a foreign business owner — is the operational foundation of any car sales or export business in Japan.

The Major Auction Houses

USS (United System Solutions / ユーエスエス): Japan's largest single auto auction network, operating dozens of auction sites nationwide. USS Tokyo alone processes over 700,000 vehicles per year. USS auctions run weekly at each venue, with a mix of passenger cars, kei cars, commercial vehicles, and occasionally rare or collector models. Membership in USS gives you access to their online bidding platform (USS Ninja) as well as physical attendance at auctions.

JU (Japan Used Motor Vehicle Dealers Association / 全国中古自動車販売協会連合会 — JU Group): A cooperative network of independent used car dealers' auctions operating under regional associations. JU auctions are particularly attractive for volume buyers — the inventory skews toward everyday vehicles and commercial stock, competition is sometimes less intense than at USS, and the regional networks provide access to locally-sourced vehicles with clear provenance.

TAA (Toyota Auto Auction): Operated by Toyota's dealer network, TAA focuses on Toyota and Lexus vehicles and maintains particularly high grading standards. Strong representation of well-maintained, dealer-traded Toyota vehicles including performance and rare models as they age into auction eligibility.

CAA (Central Auction Association), ZIP Auction, AUCNET, and others: Dozens of additional auction networks operating regionally and nationally, each with their own membership requirements and vehicle mix.

Combined weekly volume: Japan's auction network collectively processes approximately 150,000–200,000 vehicles per week across all venues, providing an extraordinary depth of inventory for sourcing at any price point and vehicle specification.

How to Gain Auction Membership

Most major auction houses require applicants to be a legally registered used car business with a valid Secondhand Dealer License. This is why the license is the operational foundation — without it, you cannot access the primary vehicle sourcing channel for any car sales business model in Japan.

Application requirements for auction membership typically include:

• Secondhand Dealer License certificate

• Company registration certificate (登記事項証明書)

• Proof of physical business premises

• Proof of vehicle storage capacity (parking/yard documentation)

• Membership fee (varies by auction house — typically ¥100,000–¥300,000 for initial registration)

• Annual maintenance fee (¥50,000–¥150,000 per year)

• A security deposit or credit guarantee to cover the value of vehicles purchased and not yet paid for

The deposit or credit guarantee requirement is significant. USS and other major auction houses require confidence that successful bidders will complete payment within the required timeframe (typically within 3–5 business days of a successful bid). For a new business without an established payment track record, the security deposit may be required upfront. Plan for ¥2–5 million in auction security deposits as part of your working capital budget.

The Auction Process — How It Works

Japanese auto auctions are fast-moving, data-rich environments. Vehicles are pre-inspected and graded by the auction house's certified inspectors before the auction day, and each vehicle receives a detailed auction sheet (オークションシート) covering:

Grade (成約グレード): A numerical rating from 0 to 5 (with variations like 4.5, 3.5):

• Grade 5: Excellent condition, virtually no defects

• Grade 4–4.5: Minor wear appropriate for age, no significant issues

• Grade 3–3.5: Normal wear, small repairs noted

• Grade 2: Notable defects, repairs needed

• Grade 1: Significant issues, major repairs required

• Grade 0 / R / A: Accident-repaired vehicles (can still be good value if repair is documented and minor)

Interior grade: Separate rating for cabin condition.

Mileage: Recorded and certified by the inspector.

Repair cost estimate (修復歴あり/なし): Critical indicator of accident history. "修復歴あり" means structural accident repair has been performed — this materially affects value, export suitability for certain markets, and financing eligibility.

Defect markings: A diagram of the vehicle with marks indicating the location and severity of scratches, dents, rust, or other visible defects.

Vehicles that are not physically present at the auction venue on the day are available for remote bidding via the USS Ninja platform and equivalent online systems at other auction houses. Remote bidding has become the dominant mode for export-focused operators who may not need to physically inspect every vehicle before bidding.

Auction Attendance — Physical vs. Remote

For domestic retail operations, physical attendance at auctions allows you to inspect vehicles before bidding and build relationships with auction house staff and other dealers. For export operations, remote bidding through the online platform is operationally efficient and allows you to participate in multiple auction events on the same day.

Foreign entrepreneurs who are new to Japan's auction system should plan to attend physically during the first months — experiencing the auction environment, understanding the grading system in context, and building the judgment needed to read auction sheets accurately are skills that develop fastest through hands-on exposure.

Step 6: The Used Car Export Business — How It Works End to End

Japan's used car export industry moves over 1.4 million vehicles per year to markets across the globe. The primary destination regions are:

• Southeast Asia: Myanmar, Sri Lanka, Mongolia, the Philippines, Thailand

• Sub-Saharan Africa: Kenya, Tanzania, Mozambique, Zambia, Zimbabwe, Nigeria

• Middle East: UAE, Jordan, Iraq, Saudi Arabia, Oman

• Oceania: New Zealand, Australia (strict compliance requirements apply)

• Eastern Europe and Central Asia: Russia (currently restricted due to sanctions), Kyrgyzstan, Georgia, Armenia

• Pacific Islands and Caribbean: Fiji, Papua New Guinea, Jamaica, Trinidad and Tobago

Each destination market has its own import regulations — age limits, right-hand vs. left-hand drive requirements, emissions standards, and customs duty structures. Understanding the regulatory environment of your target market is foundational. Selling a vehicle into a market whose import regulations prohibit it (for example, a vehicle too old to clear Bangladesh's age restriction) creates expensive logistics reversals and damages buyer relationships.

Step-by-Step: The Export Process

Purchase the vehicle through the auction network using your Secondhand Dealer License and auction membership. Alternatively, source directly from dealers or private sellers (though auction sourcing is more scalable and provides standardized grading and documentation).

Within 3–5 business days of a successful auction bid, payment must be completed to the auction house. Factor this payment timeline into your working capital management — buying more vehicles than your cash flow can service within the settlement window is a common operational error.

After auction settlement, arrange transport of the purchased vehicle from the auction venue to either your own storage yard or directly to a port-adjacent export yard (ヤード). Major auto auction venues have affiliated transport networks that move vehicles to yards at major export ports — Yokohama, Osaka/Kobe, Nagoya, Moji — efficiently and at standardized rates.

Port yard storage fees are typically ¥3,000–¥8,000 per vehicle per month. Vehicles should not sit in the yard longer than necessary — port storage costs accumulate, and a vehicle's condition can deteriorate.

Before loading, vehicles intended for export must be cleaned to meet the biosecurity requirements of destination countries. Australia and New Zealand are the strictest — the Australian Quarantine and Inspection Service (AQIS) and New Zealand's Ministry of Primary Industries (MPI) require thorough cleaning of all mud, soil, and organic material from the vehicle's exterior, underside, and interior. Inspection and cleaning services at Japanese export yards typically cost ¥3,000–¥10,000 per vehicle.

For some destination countries, a pre-shipment inspection (PSI) by an internationally accredited body — such as JAAI (Japan Automobile Appraisal Institute) or Intertek — is required before export. This inspection verifies the vehicle's condition, mileage, and compliance with destination country standards. JAAI inspection fees are typically ¥5,000–¥15,000 per vehicle.

All vehicles exported from Japan must be formally deregistered from Japan's vehicle registration system before they leave the country. This is a legal requirement under the Road Vehicle Law amendment that took effect in 2005.

The deregistration process involves:

• Submitting a deregistration application (抹消登録申請) to the regional transport office (運輸局)

• Receiving the Certificate of Registration Deletion (登録識別情報通知書) or a Cancellation Certificate

• For export purposes, the transport office confirms the vehicle's export and finalizes the deletion

Most export yards and logistics partners handle deregistration on behalf of the exporter as part of their service package. Deregistration fees are modest — approximately ¥340 for the standard application stamp duty.

Exporting a vehicle from Japan requires a customs export declaration submitted through Japan Customs (日本税関). The submission is made via Japan's NACCS (Nippon Automated Cargo and Port Consolidated System) — Japan's electronic customs processing system.

Documents required for the export customs declaration:

• Commercial invoice (商業送り状) showing the buyer, seller, vehicle description, and transaction value

• Export certificate / Certificate of Registration Deletion

• Vehicle inspection certificate (車検証) — the deregistered version

• Packing list (where applicable)

• Any required pre-shipment inspection certificates

The export declaration results in an Export Permit (輸出許可証). This document is critical — it is the proof that the vehicle has been legally exported from Japan, and it is required by the buyer in the destination country for customs clearance and registration.

Japan does not levy export duties on used vehicles. However, some vehicles may be subject to export restrictions — contact Japan Customs if you are dealing in any vehicles that may fall into restricted categories (military equipment, certain specialized vehicles).

Vehicles are shipped from Japanese ports by one of two methods:

RoRo (Roll-On, Roll-Off): The vehicle is driven onto a specialized car carrier ship. More cost-effective for single vehicles or small quantities. The most common method for export of running vehicles. RoRo shipping from Japan to major destinations costs approximately ¥50,000–¥150,000 per vehicle depending on destination and route.

Container shipping: Multiple vehicles are loaded into a 20-foot or 40-foot shipping container. More cost-effective per unit when shipping multiple vehicles simultaneously — a 20-foot container typically holds 2–3 standard vehicles (or 4–6 kei cars), a 40-foot container holds 4–6 standard vehicles. Container shipping is preferred for high-value vehicles where physical protection during transit is important, or when shipping to ports with limited RoRo infrastructure.

Container stuffing services at Japanese export yards typically cost ¥5,000–¥15,000 per vehicle.

Major export ports:

• Yokohama: Japan's largest export port, handling the highest volume of used vehicle exports

• Osaka/Kobe: Central Japan hub with strong connections to Middle East routes

• Nagoya: Toyota country — strong for Toyota and Japanese domestic market vehicles

• Moji (Kitakyushu): Western Japan hub, frequently used for Korea and Southeast Asia routes

Once the vehicle is loaded and the vessel departs, compile and forward to the buyer:

• Bill of Lading (船荷証券, B/L): The shipping document that represents ownership of the cargo. The buyer uses the original B/L to claim the vehicle at the destination port. Safeguard the original and transmit it by courier — electronic copies are not always accepted.

• Export Permit (輸出許可証)

• Commercial invoice

• Certificate of Registration Deletion (functions as the title document for the vehicle)

• JAAI or PSI certificate (if required for the destination country)

• Auction sheet copy (typically included as part of the vehicle history documentation)

In Japan's export trade, the standard payment term is T/T (Telegraphic Transfer) in advance — the buyer pays before or immediately at shipping, and the documents are released upon receipt of payment. Extending credit to overseas buyers without strong relationships and established payment history is a significant risk in this industry. Build your buyer relationships carefully and start with pre-payment terms universally.

Step 7: Importing Foreign Vehicles to Japan

Importing vehicles into Japan for domestic sale is the most complex of the three business models and requires familiarity with Japan's vehicle compliance system. It is also potentially the highest-margin model for well-positioned operators — genuine imported European luxury vehicles and classic American cars carry strong premiums in Japan's domestic market.

Japan's Vehicle Compliance Requirements

All vehicles registered and driven on Japanese public roads must comply with Japan's Road Vehicle Law (道路運送車両法) safety and emissions standards. For domestically manufactured vehicles, compliance is built in. For imported foreign vehicles, compliance must be demonstrated through one of the following routes:

Type Approval (型式指定 or 型式認定): The vehicle model has been officially certified as compliant with Japanese standards by the manufacturer or an approved representative. Most major imported vehicles sold through official Japanese dealer channels have Type Approval — BMWs, Mercedes-Benz vehicles, Volkswagen models, and Volvo vehicles sold in Japan through their authorized importers fall into this category. Buying a used example of these vehicles for resale is relatively straightforward.

Individual Vehicle Inspection (新規検査 for individual compliance): For vehicles without Type Approval — typically American muscle cars, classic European vehicles, grey market imports, or rare models not officially sold in Japan — each vehicle must individually pass a compliance inspection. This can require modification work to meet Japanese safety standards (lighting specifications, bumper heights, emissions equipment) and may involve significant cost and time.

Ministerial Certification (大臣認定): A formal certification route for vehicles that do not meet standard compliance criteria but are granted individual exception status by the Ministry of Land, Infrastructure and Transport (MLIT). Used for truly unusual imports.

Customs and Import Duties

Importing foreign vehicles into Japan through customs involves:

Customs declaration (輸入申告): Submitted through NACCS, the same electronic system used for export. The importer (or their customs broker) submits the declaration with the commercial invoice, bill of lading, and vehicle specifications.

Import duties: Japan's import duty rate on passenger vehicles is 0%. Japan eliminated tariffs on imported passenger vehicles as part of trade liberalization commitments. This makes Japan one of the most duty-friendly markets in the world for vehicle import.

Consumption tax: 10% consumption tax is levied on the customs value of the imported vehicle. This is a significant cost — on a ¥5 million vehicle, consumption tax adds ¥500,000 to your landed cost.

Vehicle registration: After customs clearance, the vehicle must be registered with the regional transport office and pass shaken (vehicle inspection) to be legally driven on Japanese roads. For vehicles without Type Approval, this is where compliance work becomes the critical cost driver.

What Sells in Japan's Import Market

The Japanese domestic market for imported vehicles is selective but genuine. The categories with strongest demand:

European luxury and performance: BMW, Mercedes-Benz, Audi, Volkswagen, Porsche — especially models with Japanese Type Approval through official channels. Used European luxury vehicles in excellent condition command strong premiums over domestic equivalents.

Classic American vehicles: Pre-1990s American muscle cars, trucks, and classic models have a devoted enthusiast following in Japan. The Left-Hand Drive format is accepted for older vehicles. Compliance requirements for older vehicles are typically more manageable.

European sports and niche models: Ferrari, Lamborghini, Porsche 911 variants, Alfa Romeo, and similar enthusiast vehicles with small but high-spending buyer communities.

Electric vehicles from overseas: As Japan's EV adoption accelerates, imported EV models not available through official Japanese channels — particularly Tesla and BYD variants — have attracted growing buyer interest, though compliance and charging infrastructure compatibility must be verified.

Step 8: Startup Costs and Financial Structure

Startup Cost Breakdown

Note: The ¥30 million Business Manager Visa capital requirement is the registered capital of your company — the total company equity — from which these startup costs are funded. It is not an additional cost on top of the above; it is the pool from which these items are paid.

Japan Finance Corporation (JFC) Financing

The Japan Finance Corporation's new business startup loan products are available to foreign residents operating a car trade business in Japan, provided they hold valid work authorization and can submit a credible Japanese-language business plan.

For a car sales business specifically, JFC assessors will focus on:

• Your sourcing strategy and auction access plan

• Your target market (domestic, export, or both) and buyer relationships

• Your vehicle pricing model and projected margins

• Your personal or professional background in the automotive industry

• The business plan's realistic revenue and cash flow projections

Indicative JFC terms:

• Loan amount: up to ¥20–¥30 million for new business startup

• Interest rate: approximately 2%–3.5%

• Repayment term: 7–10 years with 1–2 year principal grace period

• No collateral required for qualifying loan amounts

A track record in the automotive industry — as an exporter in your home country, a car dealer, or a logistics provider — is valuable supporting evidence in a JFC application. Include it explicitly in your business plan.

Step 9: Additional Licenses for Specialized Operations

Beyond the Secondhand Dealer License, certain vehicle-related business activities require additional licensing.

Automotive Dismantling Business License (自動車解体業登録)

If your business model includes purchasing vehicles for parts dismantling — stripping a vehicle of usable parts for sale individually, with the stripped shell exported as scrap — you must register as an Automotive Dismantling Business under Japan's End-of-Life Vehicle Act. This is separate from the Secondhand Dealer License and is registered with the prefectural governor's office.

Dismantling operations also require:

• Automotive Fluorocarbon Recovery Business registration — required because dismantling air-conditioned vehicles releases refrigerant gases that must be properly recovered and handled

• A suitable premises for dismantling operations with appropriate environmental controls

Scrap Metal Dealer License (金属くず商許可)

If your export model includes trading scrap metal from vehicle components, a separate Scrap Metal Dealer License (金属くず商の許可) issued by the prefectural public safety commission is required. This is separate from the standard Secondhand Dealer License categories.

Automobile Transport Business (自動車運送事業)

If you operate your own vehicle transport trucks to move purchased vehicles between auction venues, storage yards, and ports, you may need to register as an Automobile Transport Business with the regional transport bureau. Most car dealers outsource vehicle transport to specialized auto transport companies and avoid this licensing requirement.

Step 10: The Practical Realities of Running the Business

Japanese Language Is Non-Negotiable

Every critical operational process in a Japan car sales business is conducted in Japanese: auction bidding, auction sheet reading, deregistration applications, customs declarations, supplier negotiations, transport logistics coordination, and all government licensing communications. JLPT N2 is the visa requirement — but for the car trade, N2 is the floor, not the ceiling. Operators with N1-level Japanese or native-level fluency have a material operational advantage.

Auction sheet literacy specifically — understanding the grading codes, repair history notations, and defect marking system in the way an experienced domestic dealer reads them — is a skill that takes months to develop. Even with strong general Japanese ability, budget for an initial learning curve that costs you on some purchases before your auction judgment is sharp.

Building Your Buyer Network (Export Model)

The export business runs on buyer relationships. Your overseas clients — the dealers, importers, and individual buyers in your target markets — need to trust you to source vehicles that match what you describe, process documents correctly, and manage logistics reliably.

Building that trust takes time. The most common approach is to start with a small, manageable volume of transactions with buyers you already know from your home country or from your prior industry experience, and expand methodically as your operational systems prove reliable. Overselling your capacity in the early phase — taking on more orders than you can source and ship reliably — is the fastest way to damage buyer relationships that take years to build.

Many successful Japanese export operators maintain a core buyer base of 10–20 regular clients who place recurring orders rather than constantly seeking new buyers at the margins. Depth of relationship with reliable buyers is more valuable than breadth of occasional connections.

Stock Management and Cash Flow

The car trade is a capital-intensive, inventory-heavy business with specific cash flow dynamics that require careful management.

Auction purchases require payment within 3–5 business days. Vehicles then sit in storage while you arrange transport, deregistration, inspection, cleaning, and shipping — a process that takes three to six weeks for most export transactions. During this entire period, your capital is tied up in the vehicle. For a business purchasing 20 vehicles per month, the working capital requirement — covering vehicles in various stages of the pipeline at any given time — can easily reach ¥10–20 million.

Managing this cash cycle requires either substantial working capital reserves, a line of credit, or an agreement with buyers to pay a deposit upon order confirmation (a common practice in the export trade that partially funds the auction purchase). Build your financial model around the actual cash cycle of your specific business, not theoretical margins.

Vehicle Grading and Quality Control

Your reputation in the market is built on the accuracy of how you represent vehicles to buyers. In the export trade particularly, buyers are making decisions based on auction sheets and your descriptions rather than physical inspection. Misrepresenting a vehicle's grade, accident history, or condition — even unintentionally due to misreading auction documentation — creates claims, disputes, and relationship damage.

Develop a systematic process for reviewing auction sheets before bidding, setting grade floors below which you will not purchase for specific buyer profiles, and clearly communicating any known defects to buyers before shipment. Transparency about condition builds trust faster than optimistic representations that eventually disappoint.

Frequently Asked Questions

Can I access Japan's auto auctions without a Japanese company? No. The major auction houses — USS, JU, TAA — require membership applicants to be legally registered businesses in Japan with a valid Secondhand Dealer License. Individual foreigners without a Japanese legal entity cannot access these auctions directly. This is why company incorporation and licensing are prerequisites to meaningful business activity.

Can I buy vehicles from private sellers without a Secondhand Dealer License? Purchasing a single vehicle for personal use does not require a license. But as soon as you are buying vehicles with the intent to resell them — even one or two cars as a starting point — this constitutes "business" under the Used Articles Dealer Act and requires the license. There is no volume threshold. One resale for profit can technically require the license.

Is there any restriction on which countries I can export to? Japan's export regulations do not prohibit exports to most countries. However, Japan follows United Nations and bilateral sanctions frameworks — Russia was placed under significant export restrictions following international sanctions after 2022, covering many vehicle categories. Always verify that your target destination country is not subject to sanctions before entering into export agreements. Your customs broker can advise on current restrictions.

Do I need a separate license for each prefecture where I operate? If your business operates from multiple locations in different prefectures, you need a Secondhand Dealer License from each prefecture's police. A single-prefecture license covers operations at premises within that prefecture. If you expand to a yard or showroom in a different prefecture, apply for the additional license before operations begin there.

Can I use a virtual office as my registered business address? Generally no for the Secondhand Dealer License — the police require a genuine physical premises, not a shared address service. For the Business Manager Visa and company registration, some flexibility may exist depending on the immigration bureau, but for licensing purposes you need a real physical location.

How long does it take to get fully operational from scratch? Plan for six to nine months from the decision to start to first vehicle export transaction: one month for company incorporation, one to two months for Secondhand Dealer License, concurrent visa processing, two to four months for Business Manager Visa, and then auction membership processing and initial sourcing. Doing the company and license in parallel where possible, and the visa application immediately after the license is issued, compresses the timeline. Rushing any step creates errors that extend the timeline further.

What is the minimum viable business scale? For the export model, most experienced operators suggest that purchasing and exporting fewer than five vehicles per month is not financially sustainable once all fixed costs (license fees, auction memberships, yard fees, administrative costs) are accounted for. Ten to twenty vehicles per month is a more realistic minimum for a genuinely profitable operation. At that volume, the business generates enough margin to cover fixed costs and provide reasonable income.

Quick Reference Summary

Japan's car trade is one of the genuinely exciting entrepreneurial opportunities for foreign nationals in the country. The quality of Japanese used vehicles is world-class, the auction infrastructure is the most organized anywhere in the world, and the export markets — from Nairobi to Karachi to Auckland — have structural, ongoing demand for Japanese vehicles that outstrips supply from any single exporter. The legal and licensing framework, while demanding, is entirely navigable with the right professional support and the right sequencing. The entrepreneurs who succeed in this space are not necessarily those with the deepest automotive knowledge — they are the ones who get the legal foundation right from the start, build buyer relationships with care, and manage cash flow with discipline. Get those three right, and Japan's car trade will reward the effort.