Starting a car-rental (rent-a-car) business: the permit and the flow for hiring out private vehicles

In short: to run a car-rental or car-sharing business you need the permit of the Minister of Land, Infrastructure, Transport and Tourism to hire out a private vehicle for consideration as a business (self-use vehicle hire-out business permit) (Road Transportation Act, Article 80(1)). The application is made to the Transport Branch Office (regional transport bureau) having jurisdiction over the location of the principal office, with a document stating the rental fares and rental terms, a confirmation that no disqualification applies, a list of the number of vehicles by office and type, and an implementation plan for the hiring-out. After the permit you register the cars under the private "wa"/"re" plates, keep a rental ledger for at least two years, and appoint a vehicle maintenance manager at an office above a set fleet size. Hiring out a car with a driver attached ("supply of a driver's labour") is prohibited, and this is the dividing line against driving-agency and "white-taxi" work. Operating without a permit is punishable by a fine of up to one million yen (Article 98). This article is general information; individual eligibility, documents and review times rest with the competent Transport Branch Office and a qualified professional. Preparing and acting for the permit application is handled by Yotsuba Administrative Scrivener Office (administrative scrivener); the new registration of the vehicle (obtaining the "wa" plate) by the applicant in person or the car dealer; incorporation and tax by a tax accountant; the content of voluntary insurance by an insurance company; labour after hiring by a certified social insurance labour consultant; and finding and leasing the office by Yotsuba Real Estate Co., Ltd., each as an independent business under a separate contract. Yotsuba Administrative Scrivener Office and Yotsuba Real Estate Co., Ltd. are separate businesses, and our office receives no referral fee.

Is a car-rental business a "permit" or a "notification," and how does it differ from driving agency?

A car-rental business is a "permit," not a "notification." Article 80(1) of the Road Transportation Act provides that "a private vehicle must not be hired out for consideration as a business without the permit of the Minister of Land, Infrastructure, Transport and Tourism." Lending cars as a side business of a used-car dealer or of lodging/tourism, and running hourly car-sharing, all amount to "hiring out for consideration as a business" and require this permit. The permit authority is delegated from the Minister to the regional transport bureau, and the actual counter is the Transport Branch Office having jurisdiction over the principal office.

A point often confused here is the automobile driving-agency business. Driving agency is the service of driving the customer's own car home on their behalf when they cannot drive due to drinking and the like, and is started by receiving the certification of the prefectural public safety commission. By contrast, a car-rental business hires out the operator's car to the customer, who drives it themselves. The governing law, the authority, and "who drives" all differ—they are separate systems. The certification requirements for driving agency are organised in Driving-Agency Certification and the Requirements for Offices and Accompanying Vehicles.

Furthermore, hiring out a car with a driver attached (hiring-out accompanied by the supply of a driver's labour) is prohibited, as described below. Arranging a driver together with the car for a fee is the domain of passenger transport (a so-called "white taxi") or bus business and raises a separate licensing problem. A car rental is premised on "only the car is lent" and "the person who borrows it drives."

Business	Who drives	Whose vehicle	Procedure	Authority
Car-rental (self-use vehicle hire-out)	The borrowing customer	The operator's car (wa/re plate)	Permit	Minister (Transport Branch Office)
Driving-agency business	The driving agent	The customer's car	Certification	Prefectural public safety commission
General trucking / passenger transport (truck, taxi, etc.)	The operator	The operator's car	Permit	Minister (transport bureau)

For the requirements of a transport licence, see General Trucking Licence and Office / Depot Requirements; for welfare transport, Welfare Taxi Licence and Depot Requirements.

What are the requirements and documents for a self-use vehicle hire-out business permit?

The permit is reviewed under the standards set in the Ministry notice "On the handling of hiring-out of private vehicles (rent-a-car) conducted with the lessor as the user of the vehicle" (Notice Ji-Ryo No. 138, 13 June 1995; last amended by Koku-Ji-Ryo No. 286, 30 March 2006). The core is that the applicant and its officers do not fall under a disqualification, and that they carry insurance against accidents.

Representative disqualifications include:

• a person sentenced to imprisonment or imprisonment-without-work of one year or more, for whom two years have not passed since completion or extinguishment of the sentence
• a person whose licence for a general passenger/cargo transport business or for self-use vehicle hire-out has been revoked, and for whom two years have not passed since the revocation
• where the applicant is a minor or an adult ward without the same capacity as an adult, and whose statutory agent falls under the above
• where, for a company, any of its officers falls under the above

When applying as a company, the presence of disqualifications is checked not only for the representative but for all officers. Note that, following the Penal Code amendment, from 1 June 2025 "imprisonment without work" has been reorganised into "imprisonment." Which prior conviction or disposition applies, and when the two years pass, is an individual judgement on the facts; an administrative scrivener supports preparing documents on rights, duties and factual certification, but avoids asserting eligibility itself—that rests with the competent Transport Branch Office. Evaluation touching on the fate of a criminal case is an attorney's domain.

For insurance, the cover set in the notice for the hired-out vehicle is a guide:

Cover	Standard amount (guide)
Bodily-injury insurance	at least 80 million yen per person
Property insurance	at least 2 million yen per case
Passenger insurance	at least 5 million yen per person

Which insurance product meets this standard and how much the premium is are the insurer's domain. Our office supports assembling documents evidencing enrolment, but does not step into product selection or eligibility. The application is made to the Transport Branch Office having jurisdiction over the principal office, attaching to the self-use vehicle hire-out permit application a document stating the rental fares and terms, a company register extract (a resident record for an individual), a confirmation of non-disqualification, a list of vehicles by office and type, and an implementation plan (placement of a responsible person, staff guidance and training, the maintenance-manager placement plan, insurance enrolment, and so on).

What do you prepare for the rental terms, the rental ledger and vehicle maintenance?

There are continuing rules even after the permit. You must not supply a driver's labour accompanying the hiring-out (including introducing or brokering a driver), and you must post a notice of this at the office. The rental fares and terms must also be posted where the public can readily see them. Name-lending (letting another use your name) is prohibited.

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On records, you must keep a rental ledger recording the borrower's name and address, the driver's name and the type and number of their driving licence, the vehicle's registration number, the date and time of the hiring-out, the distance driven, the rental fare, matters concerning accidents, and the like, and retain it for at least two years. You deliver to the borrower a rental certificate stating the observance items (carrying it during operation, that no supply of a driver's labour may be received, etc.) and have the driver carry it. The previous year's hiring-out performance report and the list of vehicles by office and type are submitted to the Transport Branch Office by 31 May each year.

The vehicle is registered not under a commercial (green) plate but as a private vehicle, under the rent-a-car classification number "wa" (or "re" in some regions). If you use at an office one or more vehicles with a capacity of 11 or more, or ten or more ordinary passenger cars and the like, you must appoint a vehicle maintenance manager (Road Transport Vehicle Act, Article 50; Ordinance for Enforcement, Article 31-3). Hiring out a private bus with a capacity of 30 or more or a length over 7 m, or a hearse, is not permitted. Private microbuses carry a separate special rule (prior notification, business track record, etc.).

Item	Content
Vehicle registration	Private "wa"/"re" plate (not a green plate)
Rental ledger	Record the statutory items and retain for at least two years
Posting duty	Rental fares, terms, and that no supply of a driver's labour is made
Maintenance manager	One or more vehicles of capacity 11+, or ten or more passenger cars
Periodic report	Submit the performance report, etc. by 31 May each year

The new registration of the vehicle (obtaining the "wa" plate) is a procedure that the applicant in person or the dealer performs at the Transport Branch Office, separate from the business permit. The practice of a maintenance manager touching on equipment and safety is handled by a qualified maintenance manager or vehicle-maintenance operator.

After the permit, who takes on vehicle registration and tax?

When starting a car-rental business as a company, the roles divide as follows. Preparing and acting for the permit application and various notifications is handled by Yotsuba Administrative Scrivener Office (administrative scrivener) as an independent business. Incorporation and officer-change registration is by a judicial scrivener; corporate and consumption tax and vehicle-related taxes (registration-and-licence tax, automobile tax, etc.) by a tax accountant; the new registration of the vehicle (obtaining the "wa" plate) by the applicant in person or the dealer at the Transport Branch Office; the content of voluntary insurance by an insurance company; the working hours and social-insurance procedures of hired staff by a certified social insurance labour consultant; finding and leasing the office by Yotsuba Real Estate Co., Ltd. (a real estate broker); and disputes over accident compensation and individual legal judgement touching on criminal cases by an attorney. Yotsuba Administrative Scrivener Office and Yotsuba Real Estate Co., Ltd. are separate businesses.

Each field is on the premise that you contract separately with each qualified professional or operator as an independent business, and our office receives no referral fee. For the flow of engagement, see Engagement Flow; for fees, Fee Schedule; and for the whole picture of our services, Permits and Applications Services. The final judgement on individual eligibility and required documents is made by a qualified professional and the competent Transport Branch Office in light of the circumstances.

FAQ

Q. Does a car-rental business need a permit or a notification?
A. A permit. To hire out a private vehicle for consideration as a business, you must receive the permit of the Minister of Land, Infrastructure, Transport and Tourism (a self-use vehicle hire-out business permit) (Road Transportation Act, Article 80(1)). The application is made to the Transport Branch Office having jurisdiction over the principal office. Operating without a permit is punishable by a fine of up to one million yen (Article 98).

Q. Will the plate be a commercial (green) plate?
A. No. A rent-a-car is registered as a private vehicle under the rent-a-car classification number "wa" (or "re" in some regions). It differs from the green (commercial) plate of a transport business. The new registration of the vehicle itself is a separate procedure performed by the applicant in person or the dealer at the Transport Branch Office.

Q. Can I hire out a car to a customer with a driver attached?
A. No. Supplying a driver's labour accompanying the hiring-out (including introducing or brokering a driver) is prohibited, and there is a duty to post this at the office. Arranging a driver together with the car for a fee raises the problem of a separate licence such as passenger transport (a "white taxi"). A rent-a-car is a system for "lending only the car."

Q. Must I always appoint a maintenance manager?
A. It depends on the type and number of vehicles. You must appoint a maintenance manager where you use at one office one or more vehicles of capacity 11 or more, or ten or more ordinary passenger cars and the like (Road Transport Vehicle Act, Article 50; Ordinance for Enforcement, Article 31-3). If you use only passenger cars below the threshold, there is no duty to appoint one. Confirm the latest standard with the Transport Branch Office before applying.

Sources (Primary Information)

• e-Gov Law Search, "Road Transportation Act" (Act No. 183 of 1951), Article 80 (hiring out; paragraphs 1 and 2), Article 81 (restriction and prohibition of use), Article 98 (penalties; a fine of up to one million yen) (accessed 2026-10-06)
• Ministry of Land, Infrastructure, Transport and Tourism, "On the handling of hiring-out of private vehicles (rent-a-car) conducted with the lessor as the user of the vehicle" (Notice Ji-Ryo No. 138, 13 June 1995; last amended Koku-Ji-Ryo No. 286, 30 March 2006; permit standards, disqualifications, standard insurance amounts, rental terms, rental ledger, prohibition of supplying a driver's labour, application documents) (mlit.go.jp; accessed 2026-10-06)
• e-Gov Law Search, "Road Transport Vehicle Act," Article 50 (maintenance manager), Ordinance for Enforcement Article 31-3 (types and numbers of vehicles requiring appointment) (accessed 2026-10-06)

This article is general information and does not guarantee the permit eligibility, required documents or review time of a particular application. Whether a disqualification applies, the standard insurance amounts, the maintenance-manager threshold, the eligibility to hire out by vehicle type, and the special rule for private microbuses may differ by the competent Transport Branch Office's or the Ministry's practice and by legal amendment, so confirm with the latest guidance before applying. Preparing and acting for the permit application and notifications is by Yotsuba Administrative Scrivener Office (administrative scrivener); the new registration of the vehicle (obtaining the "wa" plate) by the applicant in person or the dealer; incorporation and officer-change registration by a judicial scrivener; tax by a tax accountant; the content of voluntary insurance by an insurance company; labour management after hiring by a certified social insurance labour consultant; finding and leasing the office by Yotsuba Real Estate Co., Ltd. (a real estate broker); and disputes over accident compensation and individual legal judgement touching on criminal cases by an attorney, each as an independent business under a separate contract. Yotsuba Administrative Scrivener Office and Yotsuba Real Estate Co., Ltd. are separate businesses. Our office receives no referral fee. Individual judgements are made by a qualified professional after a meeting. Written by Joji Uramatsu, administrative scrivener and licensed real estate broker.