For real estate professionals in Greater China: working with a licensed Japanese broker on property deals in Japan

In short: brokering the sale and purchase of real estate located in Japan, as a business, requires a licence under Japan's Real Estate Brokerage Act (takken licence). An overseas company without that licence proceeds by dividing roles with a licensed Japanese broker. Yotsuba Real Estate Co., Ltd. takes on the Japanese side of that partnership — property research, the statutory explanation of important matters, contract preparation and settlement — working in Chinese (simplified and traditional). This article is for real estate companies and agents in Greater China who want to introduce Japanese properties to their clients.

Do I need a Japanese licence to introduce Japanese properties to my clients?

In Japan, acting as agent or intermediary in the sale, exchange or leasing of real estate as a business requires a licence under Article 3 of the Real Estate Brokerage Act (Takken-gyo-ho, Act No. 176 of 1952). A licence is required where brokerage is carried on repeatedly and continuously, for members of the public, for remuneration.

Whether a given form of involvement by an overseas company amounts to "brokerage as a business" has to be examined case by case. As a general framework, this article assumes the division of roles in which the brokerage of the domestic transaction itself is handled by the licensed Japanese broker.

How are roles divided with the Japanese broker?

Stage	Your firm (Greater China)	Licensed Japanese broker (Yotsuba)
Client dialogue, clarifying requirements	○ (in the client's language)	○ (available in Chinese)
Property sourcing and on-site investigation	—	○
Statutory explanation of important matters	Not permitted	○ (delivered by a licensed transaction specialist)
Preparing the sale contract and disclosure statement	Not permitted	○
Attendance at settlement and handover	—	○
Post-handover management and resale advice	—	○

"Not permitted" means the task is reserved under the Real Estate Brokerage Act to the licensed broker and its Real Estate Transaction Specialist (takken-shi, the Japanese national qualification for property transactions).

Who delivers the explanation of important matters?

Before a sale contract is concluded, a Real Estate Transaction Specialist delivers the statutory explanation of important matters (Real Estate Brokerage Act, Article 35). This is an obligation on the Japanese licensed broker's side; an overseas company cannot deliver it in the broker's place.

You can verify that a Japanese counterparty is properly licensed by checking its licence number. The procedure is explained in How to look up a broker's licence number (Japanese).

What happens at settlement when the seller is a non-resident?

Where the seller is a non-resident of Japan, the buyer may incur a withholding obligation (Income Tax Act, Articles 161 and 212). A post-transaction report under the Foreign Exchange and Foreign Trade Act (FEFTA) may also be required.

• Withholding and FEFTA reporting as a whole: Non-resident property acquisitions and FEFTA reporting
• How non-resident status is determined, and the handover date: Non-resident status and the handover date

Calculating and filing tax is the work of a licensed tax accountant (zeirishi). Where needed, we will point you to one to engage directly.

How does a bulk deal — a whole building or multiple units — proceed?

Stage	What is needed
Initial approach	Outline of the target property, budget, timetable
Evaluation	Rent roll, repair history, registry information
Contract	Explanation of important matters and sale contract (prepared by the broker)
Settlement	Remittance route for funds; confirmation of withholding where the seller is a non-resident

Timelines vary with the transaction, so we set them out case by case. For ongoing support for owners living overseas, see For overseas owners.

What can Yotsuba Real Estate take on?

Yotsuba Real Estate Co., Ltd. is a licensed real estate broker in Bunkyo-ku, Tokyo (licence: Tokyo Governor (1) No. 113304). We take on the Japanese side of the partnership, working in Chinese (simplified and traditional). Consultation is free of charge — feel free to contact us in Chinese.

For your clients' residence status (visa) questions, see our guide for international clients. Residence status procedures are handled by Yotsuba Administrative Scrivener Office (gyosei-shoshi — the Japanese qualification for preparing documents submitted to public authorities). Yotsuba Real Estate Co., Ltd. and Yotsuba Administrative Scrivener Office are independent businesses, engaged under separate contracts.

Frequently asked questions

Q. May we, as an overseas real estate company, advertise Japanese properties?
A. Whether a given form of involvement amounts to "brokerage as a business" under the Real Estate Brokerage Act has to be examined case by case. We recommend designing the division of roles first, on the footing that the brokerage of the domestic transaction itself — the statutory explanation, contract preparation, settlement — sits with the licensed Japanese broker. We can discuss specific arrangements in a meeting.

Q. Can the explanation of important matters be given in Chinese?
A. The explanation is delivered by a Real Estate Transaction Specialist. Yotsuba supplements it in Chinese so that the client can follow the content. The originals of the contract and the disclosure statement are in Japanese.

Q. What should the buyer watch for when the seller is a non-resident?
A. The buyer may incur a withholding obligation (Income Tax Act, Articles 161 and 212), and a FEFTA report may be required. The tests and procedures are set out in the related articles above. Calculating and filing tax is a matter for a licensed tax accountant, whom you would engage directly.

Q. Is there a consultation fee?
A. No. Consultation is free, in Chinese (simplified or traditional) or English. If we take on a transaction, the terms are set out in writing after we have reviewed the details.

Sources (primary)

• Real Estate Brokerage Act on e-Gov (Act No. 176 of 1952; Article 3 = licensing, Article 35 = explanation of important matters)
• Income Tax Act (Act No. 33 of 1965), Articles 161 and 212 — withholding on payments to non-residents
• Reporting under the Foreign Exchange and Foreign Trade Act — see Non-resident property acquisitions and FEFTA reporting

How a particular form of overseas involvement is treated under the Real Estate Brokerage Act varies with the arrangement (points we could not verify are not carried in this article). This article provides general information only and does not judge or guarantee the lawfulness of any individual transaction or arrangement.
Brokerage and the sale contract are handled by Yotsuba Real Estate Co., Ltd. (licensed real estate brokerage); preparation of documents for submission to public authorities, such as residence status applications, is handled by Yotsuba Administrative Scrivener Office — each as an independent business under a separate contract. Tax is the province of a licensed tax accountant.

About the author

Joji Uramatsu — Real Estate Transaction Specialist (Tokyo Governor registration No. 293544) and Administrative Scrivener (registration No. 25087022). Representative Director of Yotsuba Real Estate Co., Ltd. (real estate brokerage licence: Tokyo Governor (1) No. 113304) and head of Yotsuba Administrative Scrivener Office. Former journalist and China Bureau Chief at the Mainichi Shimbun. Kohinata, Bunkyo-ku, Tokyo — about five minutes on foot from Myogadani Station. As the Chinese-language liaison for this partnership, he organises the property, contract and settlement issues at one table.