Q: Types of Japanese Administrative Acts: Permits, Licenses, and More – What Your Business Needs to Know

Japanese Attorney at Law - Bengoshi L.L.

• 11 min read

When Japanese administrative authorities make formal decisions that affect your business—granting a permit, issuing an order, or approving a transaction—these actions are often specific types of "administrative acts" (gyōsei kōi - 行政行為). While gyōsei kōi is a broad scholarly term, understanding its various classifications can provide crucial insights into the nature of the government's action, the extent of its discretion, the legal effects on your business, and the potential avenues for response or challenge. This article explores the common typologies of administrative acts in Japanese law, offering a guide for businesses navigating the regulatory landscape.

It's important to note that these classifications are primarily tools for legal analysis and scholarship. While they help in understanding the underlying legal principles, the specific terminology used in statutes might differ (e.g., a law might use the term "permit" for an act that doctrinally functions as a "special grant/license"). The critical takeaway is understanding the function and legal implications of each type.

A Foundational Distinction: Juridical Act-like vs. Quasi-Juridical Act-like Administrative Acts

Japanese administrative law doctrine traditionally categorizes administrative acts into two broad groups based on the role of the administrative organ's intent in producing the legal effect:

  1. Juridical Act-like Administrative Acts (法律行為的行政行為 - Hōritsu Kōi-teki Gyōsei Kōi):
    These are acts where the legal effect (e.g., granting a right, imposing an obligation) arises primarily from the administrative organ's expressed intention to achieve that specific legal outcome. The agency consciously wills a change in the legal status of the addressee. These acts often, though not always, involve a degree of administrative discretion in deciding whether and how to act.
  2. Quasi-Juridical Act-like Administrative Acts (準法律行為的行政行為 - Jun Hōritsu Kōi-teki Gyōsei Kōi):
    In these acts, the legal effect is primarily attached by law to the administrative organ's statement of cognition, judgment, or ascertainment of facts, rather than to its intent to create that specific legal effect. The agency confirms or publicly attests to something, and the law then dictates the consequences. These acts are generally considered to involve less or no administrative discretion regarding the content of the act itself (though discretion may exist in the preceding investigation or factual judgment process). Traditionally, they are not considered amenable to the attachment of ancillary provisions (fukan - 附款, like conditions or time limits).

Let's explore the sub-types within these categories.

Delving into Juridical Act-like Administrative Acts

These are often the most impactful for businesses, as they directly shape what a business can or must do.

I. Command-like Acts (命令的行為 - Meirei-teki Kōi): Regulating Inherent Freedoms

Command-like acts typically involve the administration restricting activities that citizens or businesses are, in principle, free to engage in, or, conversely, lifting such restrictions. The level of administrative discretion in these acts has traditionally been viewed as more circumscribed compared to "formative acts" (discussed below).

A. Orders (Kamei - 下命) and Prohibitions (Kinshi - 禁止):

  • Kamei (Orders to Act): These administrative acts command the addressee to perform a specific action, thereby imposing a positive legal duty (a duty of commission).
    • Business Examples: An order to pay taxes by a certain date; an order to rectify an unsafe condition in a factory; an order to recall a defective product.
  • Kinshi (Prohibitions): These acts forbid the addressee from performing a specific action, imposing a negative legal duty (a duty of omission).
    • Business Examples: A business suspension order issued due to severe hygiene violations; an order prohibiting the discharge of certain pollutants above specified levels; a temporary ban on the sale of a particular product pending safety investigation.
  • Business Impact: These acts directly impose legal obligations. Non-compliance can lead to administrative sanctions (fines, further operational restrictions), compulsory execution measures by the administration, or even criminal penalties if stipulated by law.

B. Permissions / Permits (Kyoka - 許可) and Exemptions (Menjo - 免除):

  • Kyoka (Permissions/Permits): This is a crucial category for businesses. A kyoka is an administrative act that lifts a general statutory prohibition on an activity that would otherwise fall within the sphere of general freedom (e.g., freedom of occupation, freedom to use property). The activity is generally prohibited by law for reasons of public interest (e.g., public safety, health, order), and the kyoka is granted in specific cases when statutory requirements are met, thereby restoring the freedom to act.
    • Nature: The underlying activity is generally restricted by law; the kyoka "unblocks" or releases this restriction for a specific party who meets the conditions.
    • Business Examples: A permit to operate a restaurant (related to food safety and public health); a driver's license (road safety); many types of construction permits verifying compliance with building codes; permits for waste disposal businesses.
    • Effect of Lack of Kyoka: Performing the regulated activity without the necessary kyoka is illegal and typically subject to administrative penalties or even criminal sanctions. However, private law transactions related to the unlicensed activity (e.g., a contract entered into by an unlicensed restaurant with a supplier) are not necessarily automatically void, although their enforceability or other consequences might be affected.
    • Administrative Discretion: Traditionally, many forms of kyoka, especially those classified as "police permits" (aimed at maintaining public safety and order), were considered to involve relatively limited administrative discretion. If the applicant demonstrably meets all the statutory requirements, the permit should generally be issued. This is sometimes referred to as kisoku sairyō (羈束裁量 - bound discretion or legally constrained discretion). However, modern regulatory schemes can be complex, and some discretion in assessing factual conditions often remains.
  • Menjo (Exemptions): An administrative act that releases a specific party from a general legal duty that would otherwise apply.
    • Business Examples: An exemption from certain environmental reporting requirements for small businesses under specific conditions; a tax exemption for certain types of charitable activities conducted by a company.
  • Business Impact: Obtaining the necessary kyoka is fundamental for legally commencing and conducting many business operations in Japan. Understanding the specific criteria, application procedures, and the scope of the agency's discretion is vital.

Formative acts are administrative acts that create new rights, legal powers, or special legal statuses for the addressee, or that extinguish such specially granted rights or statuses. These are rights or positions that individuals or businesses do not inherently possess but are conferred by the state. These acts often involve a greater degree of administrative discretion compared to command-like acts.

A. Concessions / Special Grants / Licenses (Tokkyo - 特許) and Deprivations of Rights (Hakken - 剥権):

  • Tokkyo (Concessions/Special Grants/Licenses): This type of administrative act confers upon a specific party a special right or legal capacity to engage in an activity that is otherwise exclusively reserved for the state, is generally prohibited for private entities without such a grant, or involves the special use of public property.
    • Nature: It confers a new right or status, not merely restoring an inherent freedom (which is the function of a kyoka). It often involves activities that have a strong public character or require significant state oversight.
    • Business Examples: The granting of mining rights (to exploit state-owned mineral resources); licenses for public utility businesses such as electricity generation and supply, gas utilities, or railway operations (historically, these were often viewed as delegations of state-monopolized functions); permits for the reclamation of public waters (kōyū suimen umetate no menkyo - 公有水面埋立の免許).
    • Administrative Discretion: Traditionally, tokkyo were considered to involve substantial administrative discretion (jiyū sairyō - 自由裁量, free discretion) concerning not only whether to grant the right but also in selecting the recipient and setting the terms. While "free discretion" is still subject to legal limits (e.g., it must not be abused or be arbitrary), the scope for agency judgment is generally wider than for a simple kyoka.
    • Distinction from Kyoka: The line between a highly regulated kyoka and a tokkyo can sometimes be blurred in modern complex regulatory schemes. The key distinction often lies in whether the act creates a new, special right (tokkyo) or releases a general prohibition on an otherwise free activity (kyoka).
  • Hakken (Deprivation of Rights): This refers to an administrative act that extinguishes a specially granted right, such as revoking a tokkyo.
  • Business Impact: Tokkyo are essential for businesses seeking to enter sectors that require special state grants or involve the use of public resources. The often discretionary nature of tokkyo means that the application and evaluation process can be more complex and uncertain than for standard permits.

B. Approvals / Validations / Ratifications (Ninka - 認可):

  • Ninka (Approvals/Validations): A ninka is an administrative act by which an administrative agency grants legal validity to, or completes the legal effect of, a juridical act (e.g., a contract, the establishment of a corporation, an amendment to articles of association) undertaken by private parties (which can include businesses). The private juridical act is a necessary prerequisite, but it remains legally ineffective, incomplete, or voidable until the ninka is obtained.
    • Nature: The ninka does not itself create the private legal relationship; rather, it "supplements" the private act by confirming its conformity with public interest criteria or other legal requirements, thereby allowing it to take full legal effect.
    • Business Examples: Approval by the relevant authority for the transfer of agricultural land rights under the Agricultural Land Act (though the Act itself may use the term "許可" - kyoka, its function is widely understood by scholars as a ninka because it validates a transaction between private parties); approval for the establishment of certain types of corporations (e.g., public interest corporations, financial institutions); approval of tariffs for regulated public utilities set by the utility company; approval of mergers or acquisitions in certain regulated industries.
    • Effect of Lack of Ninka: The underlying private juridical act (the contract, corporate resolution, etc.) is generally considered void or legally ineffective without the required ninka.
    • No Cure for Underlying Defects: A ninka cannot validate an underlying private act that is itself fundamentally flawed (e.g., a contract made under duress or by a party lacking legal capacity remains invalid even if a ninka is mistakenly granted).
  • Business Impact: Ninka are critical for the legal validity of many important business transactions, corporate formations, and structural changes in regulated sectors. Businesses must ensure that both the underlying private agreement and the administrative ninka requirements are meticulously met.

C. Agency / Representation (Dairi - 代理) (as an administrative act):

  • This category, in the context of administrative act typology, refers to situations where an administrative organ, acting with public authority, steps in to determine or create a legal relationship on behalf of, or in place of, other legal subjects (often private parties), particularly in dispute resolution or allocation contexts.
  • Example: A determination made by a Land Expropriation Committee (Tochi Shūyō Iinkai - 土地収用委員会) regarding the amount of compensation to be paid by a project developer (the acquirer) to a landowner in compulsory land acquisition (expropriation) proceedings. Here, the Committee (an administrative body) authoritatively determines the terms of the legal relationship (compensation) between the two private (or public-private) parties.

Exploring Quasi-Juridical Act-like Administrative Acts

These acts derive their legal effect primarily from the law's response to the agency's cognitive or declarative function, rather than from the agency's intent to create a specific legal change. They generally involve less or no discretion regarding the act's content.

A. Confirmations (Kakunin - 確認):

  • This is an act by an administrative agency that officially ascertains and authoritatively declares the existence or non-existence of a specific fact or legal relationship, often after an investigation or examination.
  • Business Examples:
    • Building confirmation (kenchiku kakunin - 建築確認): An official confirmation by a building official that a proposed building plan complies with the Building Standards Act and related regulations. This is a prerequisite for commencing construction.
    • Tax assessment correction/determination (kōsei shobun - 更正処分 or kettei - 決定): A determination by tax authorities of the correct amount of tax due, after reviewing a taxpayer's declaration or conducting an audit.
    • Certification of eligibility for a pension or other social security benefits.
    • Certification of a person as suffering from a designated pollution-related disease, which can trigger eligibility for compensation schemes.
  • Business Impact: Confirmations are often crucial prerequisites for businesses to proceed with certain activities (like construction), to establish legal certainty regarding their compliance status (like with building codes), or to claim entitlements (like tax refunds or certifications for preferential treatment).

B. Notarizations / Certifications (Kōshō - 公証):

  • This is an act by an administrative agency that officially attests to or verifies certain facts or legal relationships, thereby giving them public credibility, evidentiary force, or fulfilling a requirement for legal perfection.
  • Business Examples:
    • Registration of real estate rights (e.g., ownership, mortgages) in the official property register (fudōsan tōki - 不動産登記).
    • Registration of a company in the commercial register (shōgyō tōki - 商業登記), which establishes its legal existence and details.
    • Issuance of various official certificates, such as a certificate of a company's registered seal impression (inkan shōmeisho - 印鑑証明書), which is often required for formal transactions.
    • Entry of an individual in an electoral register (relevant for corporate officers who are also citizens).
  • Business Impact: Notarizations and certifications are fundamental for establishing and proving legal rights (e.g., property ownership, corporate status) and are indispensable for a wide range of official and commercial transactions.

C. Notifications (Tsūchi - 通知):

  • This refers to an act of communicating a specific judgment, fact, instruction, or the agency's intention to another party, where the law attaches specific legal consequences to the act of making or receiving such notification. It is more than mere information sharing; it's a formal communication with legal import.
  • Business Example: A formal warning (kaikoku - 戒告) issued under the Administrative Vicarious Execution Act. This notice informs a party of their failure to perform a legally mandated duty (e.g., demolishing an illegal structure) and states that if they do not comply by a specified deadline, the administration will perform the act on their behalf (or have a third party do so) at their expense. The issuance of this kaikoku is a necessary procedural step before vicarious execution can commence.

D. Acceptances (Juri - 受理):

  • This is an act by an administrative agency of formally receiving a submission (such as an application, notification, report, or registration filed by a citizen or business) and acknowledging it as legally effective or as having fulfilled a legal requirement. Juri is more than mere physical receipt of documents; it implies that the submission has met formal requirements and will either be processed further or will, by itself, trigger certain legal consequences stipulated by law.
  • Business Examples: The acceptance of a business registration application by the Legal Affairs Bureau; the acceptance of a tax return by the tax office; the acceptance of a notification required by law before commencing certain types of business activities. Once "accepted" (juri-sareta), the submission is formally within the administrative system and has legal standing.

Other Important Classifications

Beyond the primary division above, administrative acts are also often categorized based on their impact on the addressee:

  • Beneficial Administrative Acts (授益的行政行為 - Jueki-teki Gyōsei Kōi): These acts confer benefits, rights, or advantages on the addressee.
    • Examples: Granting a license or permit, awarding a subsidy, approving a development plan.
  • Burdensome Administrative Acts (侵害的行政行為 - Shingai-teki Gyōsei Kōi or 負担的行政行為 - Futan-teki Gyōsei Kōi): These acts impose obligations, duties, or restrictions on the addressee, or otherwise unfavorably affect their rights or interests.
    • Examples: Issuing a tax payment order, ordering a business to suspend operations, revoking a license, imposing a fine.

This distinction between beneficial and burdensome acts is particularly important in several contexts:

  • Procedural Requirements: The Administrative Procedure Act generally mandates more stringent procedural safeguards (such as the right to a formal hearing - chōmon) before a burdensome or "adverse disposition" (furieki shobun - 不利益処分) is made, compared to procedures for simply processing applications for beneficial acts.
  • Revocation and Withdrawal: The legal principles governing an agency's power to revoke or withdraw an administrative act often differ depending on whether the act was beneficial or burdensome to the recipient. Revoking a beneficial act that a party has relied upon typically requires a stronger justification (e.g., significant public interest) than correcting a burdensome act that was unlawfully imposed.

Conclusion: A Framework for Understanding and Action

The scholarly categorization of Japanese administrative acts (gyōsei kōi) into types such as kyoka, tokkyo, and ninka, and the broader distinctions between juridical act-like and quasi-juridical act-like forms, provides a valuable analytical framework. For businesses, recognizing the likely category of a particular government decision or requirement helps in understanding:

  • The probable level of administrative discretion involved.
  • The nature of the legal rights or obligations being created or affected.
  • The typical conditions or requirements associated with that type of act.
  • The legal consequences of acting without the required authorization or of failing to comply with an order.
  • The potential grounds and procedures for challenging an adverse administrative act.

While specific statutes will always govern the details, this typological understanding equips businesses with a conceptual toolkit to better interpret administrative actions and to engage more effectively and strategically with the Japanese regulatory system.