Japanese authorities have finally given the official green light to Airbnb rentals but with an annual limit on the number of days rental income can be earned.
Japan has put a maximum limit of 180 days a year allowed for short term lets.
The new bill which has been endorsed by the Cabinet also makes allowances for city councils to add their own restrictions.
It still requires passage through the Japanese parliament before it becomes law.
The bill was endorsed amid a looming shortage of accommodation for visitors with surging tourist arrivals, which is expected to continue at least until the 2020 Tokyo Olympic Games.
Japan welcomed more than 24 million overseas tourists last year, a record for the fourth year in a row.
Airbnb has about 48,000 listings in Japan and is one of its fastest growing markets in Asia.
The 180 day limit is fairly lenient compared to other cities like London which imposed a maximum 90 days and Amsterdam at just 60 days.
