Quick Overview: "You Can't Start Without Filing First" Is a Misconception
Most people who search variations of "do I need to be a registered sole proprietor for BASE" are worried about one thing: can someone who hasn't filed Japan's business-start notice (開業届) still open a shop on BASE? The short answer: opening a shop on BASE itself doesn't require filing that notice. BASE runs no pre-screening review, and individuals can create an account for free regardless. This guide covers why you can start building without filing first, what actually puts your home address at risk on the legal disclosure, how a virtual office can help protect your privacy, and what to do once you start turning a real, ongoing profit.
Why You Can Start on BASE Without Filing First
Under Japan's income tax law, the business-start notice is generally supposed to be filed with the tax office within a month of starting a business — but there's no penalty for filing late or not filing it at all. And BASE itself doesn't make filing that notice, or registering as a sole proprietor, a condition of opening a shop. In other words, the premise that "you can't use BASE unless you're already a registered sole proprietor" is a misconception — if you're starting small as a hobby or side activity, there's nothing wrong with building your store first, before filing anything.
That doesn't mean the notice is never needed, though. The real question isn't "can I use BASE" — it's a separate one: how will your sales activity actually be treated for tax purposes?
The Question That Matters More Than the Notice: Business Income or Miscellaneous Income?
Whether income from a side activity or hobby gets treated as "business income" or "miscellaneous income" at tax filing time comes down, based on Japan's National Tax Agency guidance, to roughly these criteria:
- If your income is roughly above ¥3,000,000 and you're keeping bookkeeping records, it tends to be treated as business income.
- Even below ¥3,000,000, if you're recording and keeping transaction records, it's often still treated as business income, on the grounds that you're conducting what's reasonably considered a "business."
- If the activity makes up less than 10% of your main job's income, or runs at a continuous loss — signs of limited profit-seeking intent — it tends to be treated as miscellaneous income even with bookkeeping in place.
If your activity falls into the miscellaneous-income range, filing the business-start notice isn't required. In other words, the practical question worth revisiting regularly isn't "have I filed the notice or not" — it's "has my sales activity grown into something that reasonably counts as a continuous, repeated business."
The Real Risk: Your Home Address on the Legal Disclosure
Separate from whether you've filed a business-start notice, there's another thing you can't avoid when running an online shop on BASE: the required legal disclosure (Specified Commercial Transactions Act notice). Businesses engaged in mail-order sales are legally required to disclose their name, address, and phone number — a rule that applies to everyone running an individual online shop, regardless of whether they've filed any business notice.
On BASE, setting your seller category to "individual" gives you a mechanism to keep your address and phone number private (your name can never be hidden, under any circumstances). But if you leave that setting untouched, your home address and phone number risk being published on the internet. Plenty of people only discover this privacy setting exists after the fact — realizing, after the fact, that "anyone who searched could see my home address." It's worth checking this setting at the very start of your build, regardless of whether you've filed a business notice.
Using a Virtual Office to Protect Your Privacy
Even with BASE's privacy setting enabled, there are still gaps — for example, handling a return or exchange can require disclosing your actual address to the buyer. A practical answer to that gap is a virtual office.
Contracting a virtual office lets you use an address and phone number separate from your home as your legal disclosure and shipping-origin information. Plenty of services are available starting around ¥1,000/month. One important caveat: even with a virtual office, your legal name must still be disclosed as-is — there's no legal substitute for that. Also, listing a false address or omitting your unit number is a legal violation, so whatever virtual office address you've contracted needs to be listed accurately. For business types where in-person visits might come up, it's worth choosing a staffed virtual office rather than an unstaffed one.
What to Do Once You Start Turning a Real Profit
Once a small-scale sales activity gains traction and starts generating a consistent profit, that's the point to seriously consider filing the business-start notice and preparing for tax filing. A reasonable benchmark is whether you're approaching the business-income threshold described earlier (income above roughly ¥3,000,000, or ongoing profit-seeking activity backed by bookkeeping).
Filing the business-start notice and getting approved for blue-form tax filing can unlock tax benefits, including a special deduction of up to ¥650,000. Costs related to protecting your privacy — virtual office fees, anonymous shipping fees — may also be deductible as business expenses. Once you're turning a profit, it's worth consulting a tax accountant or your local tax office early, including on whether to file the business-start notice.
FAQ
Q. Can I even create a BASE account without having filed a business-start notice?
A. Yes. Opening a shop on BASE doesn't require filing the notice or registering as a sole proprietor, and there's no pre-screening review. If you're starting small as a hobby or side activity, there's nothing wrong with building your store before filing anything.
Q. What becomes a problem if I turn a profit without ever filing the notice?
A. The issue isn't really whether you filed the notice — it's whether you need to file a tax return. Once your income crosses a certain level and your activity looks like a continuous, repeated business, it can be classified as business income subject to tax filing. If you're unsure, it's worth consulting a tax accountant or tax office early.
Q. Does using a virtual office let me hide my identity completely?
A. No. Even if a virtual office substitutes for your address and phone number, your legal name must still be disclosed as-is under the Specified Commercial Transactions Act — there's no way around that. Think of it as a way to realistically reduce risk, not eliminate privacy exposure entirely.
Summary and Key Takeaway
The answer to "do I need to be a registered sole proprietor for BASE" comes down to this: you can open a shop without having filed the business-start notice. But whether you need to file it is a separate tax question, unrelated to whether you can use BASE. Alongside that, the risk of your home address being exposed through the legal disclosure is something everyone has to deal with, regardless of filing status — and it's one you can realistically reduce through the privacy setting and a virtual office. Resolve the anxiety around starting small first, then seriously consider the business notice and tax filing once you're actually turning a profit — that order lets you take the first step without overextending.
That said, both the tax judgment calls and the privacy settings involve details that aren't always obvious. Leap offers an AI E-Commerce Agent that supports building and running an e-commerce site entirely through conversation with AI. If you want to take that first small step with more confidence, take a look at what Leap offers.
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References
- Do You Need to File a Business-Start Notice for a Side Job Even as a Company Employee? - freee
- Business Income vs. Miscellaneous Income: How to Tell the Difference, Based on National Tax Agency Guidance - Sogyo Techo
- How to Avoid Disclosing Your Home Address When Starting on BASE: Using a Virtual Office - Resonance Virtual Office
- Is There a Setup Manual for the Legal Disclosure (Individual)? - Help | BASE
- Can I Keep My Address Private From Buyers? - Help | BASE
