Industry Code Validation in Python — NAICS & NACE Classification

1. What are industry codes?

Industry classification codes are standardised systems for categorising the economic activities of businesses and organisations. They assign a numeric (or alphanumeric) code to every type of business activity — from agriculture and mining to software development and financial services.

The two most widely used systems are NAICS (North American Industry Classification System), used by the United States, Canada, and Mexico, and NACE (Nomenclature statistique des Activités économiques dans la Communauté Européenne), the standard across the European Union.

These codes appear everywhere: business registrations, tax filings, regulatory reports, loan applications, insurance underwriting, and KYC (Know Your Customer) processes. They provide a common language for government agencies, financial institutions, and businesses to describe what a company does.

Both systems are periodically revised — NAICS was last updated in 2022 and NACE uses Rev. 2 as its current edition. Using outdated codes can lead to misclassification, compliance issues, and rejected filings.

2. NAICS vs NACE comparison

While both systems serve the same purpose — classifying business activities — they differ in structure, geography, and granularity.

3. Code structure and hierarchy

Both NAICS and NACE organise industries into a tree-like hierarchy, from broad sectors down to specific activity types.

NAICS structure (2–6 digits)

NACE structure (Sections A–U)

4. Why industry code validation matters

5. The right solution

The IsValid Industry Code API provides two endpoints: a validate endpoint that checks whether an industry code is valid and returns its description, hierarchy, and system information, and a list endpoint that returns all codes for a given system, level, or parent code.

Get your free API key at isvalid.dev. The free tier includes 100 calls per day — enough for most development and low-volume production use.

Full parameter reference and response schema: Industry Code Validation API docs →

6. Python code example

Using the isvalid-sdk Python SDK or the requests library. Install with pip install isvalid-sdk or pip install requests.

# industry_validator.py
import os
from isvalid_sdk import IsValidConfig, create_client

iv = create_client(IsValidConfig(api_key=os.environ["ISVALID_API_KEY"]))

# ── Validate a NAICS code ───────────────────────────────────────────────────

result = iv.industry("541511")

print(result["valid"])       # True
print(result["system"])      # 'NAICS'
print(result["description"]) # 'Custom Computer Programming Services'
print(result["level"])       # '6-digit'
print(result["hierarchy"])   # [{'code': '54', 'description': '...'}, ...]

# ── Validate a NACE code ────────────────────────────────────────────────────

nace = iv.industry("62.01", system="nace")

print(nace["valid"])       # True
print(nace["system"])      # 'NACE'
print(nace["description"]) # 'Computer programming activities'
print(nace["edition"])     # 'Rev. 2'
print(nace["level"])       # 'class'
print(nace["parent"])      # '62.0'

# ── Check a sector-level NAICS code ─────────────────────────────────────────

sector = iv.industry("54")

print(sector["description"]) # 'Professional, Scientific, and Technical Services'
print(sector["level"])       # '2-digit'
print(sector["edition"])     # '2022'

# List all 4-digit NAICS industry groups under sector 54
groups = iv.industry.list(system="naics", level="4-digit", parent="54")

for g in groups:
    print(f"{g['code']} — {g['description']}")
# → 5411 — Legal Services
# → 5412 — Accounting, Tax Preparation, Bookkeeping...
# → ...
# → 5415 — Computer Systems Design and Related Services
# → ...

# app.py (Flask)
import os
import requests as http
from flask import Flask, request, jsonify

app = Flask(__name__)

API_KEY = os.environ["ISVALID_API_KEY"]
BASE_URL = "https://api.isvalid.dev"


def validate_industry(code: str, system: str | None = None) -> dict:
    params = {"value": code}
    if system:
        params["system"] = system
    resp = http.get(
        f"{BASE_URL}/v0/industry",
        params=params,
        headers={"Authorization": f"Bearer {API_KEY}"},
    )
    resp.raise_for_status()
    return resp.json()


@app.post("/businesses")
def create_business():
    data = request.get_json()

    # Determine the system based on region
    country = data.get("country", "")
    system = "naics" if country in ("US", "CA", "MX") else "nace"

    # Validate the industry code
    try:
        check = validate_industry(data["industry_code"], system=system)
    except http.RequestException:
        return jsonify(error="Industry code validation service unavailable"), 502

    if not check["valid"]:
        return jsonify(
            error="Invalid industry code",
            hint=f"Provide a valid {system.upper()} code",
        ), 400

    # Use the validated data
    business = save_business(
        name=data["name"],
        industry_code=check["code"],
        industry_description=check["description"],
        industry_system=check["system"],
        industry_level=check["level"],
        hierarchy=check["hierarchy"],
        country=country,
    )

    return jsonify(success=True, business=business)

7. cURL example

Validate a NAICS code:

curl -H "Authorization: Bearer YOUR_API_KEY" \
  "https://api.isvalid.dev/v0/industry?value=541511"

Validate a NACE code:

curl -H "Authorization: Bearer YOUR_API_KEY" \
  "https://api.isvalid.dev/v0/industry?value=62.01&system=nace"

Validate a NAICS sector:

curl -H "Authorization: Bearer YOUR_API_KEY" \
  "https://api.isvalid.dev/v0/industry?value=54&system=naics"

List NAICS codes under a parent:

curl -H "Authorization: Bearer YOUR_API_KEY" \
  "https://api.isvalid.dev/v0/industry/list?system=naics&level=4-digit&parent=54"

8. Understanding the response

Response for a NAICS code:

{
  "valid": true,
  "system": "NAICS",
  "edition": "2022",
  "code": "541511",
  "description": "Custom Computer Programming Services",
  "level": "6-digit",
  "parent": "54151",
  "hierarchy": [
    { "code": "54", "description": "Professional, Scientific, and Technical Services" },
    { "code": "541", "description": "Professional, Scientific, and Technical Services" },
    { "code": "5415", "description": "Computer Systems Design and Related Services" },
    { "code": "54151", "description": "Computer Systems Design and Related Services" }
  ]
}

Response for a NACE code:

{
  "valid": true,
  "system": "NACE",
  "edition": "Rev. 2",
  "code": "62.01",
  "description": "Computer programming activities",
  "level": "class",
  "parent": "62.0",
  "hierarchy": [
    { "code": "J", "description": "Information and communication" },
    { "code": "62", "description": "Computer programming, consultancy and related activities" },
    { "code": "62.0", "description": "Computer programming, consultancy and related activities" }
  ]
}

Invalid industry code:

{
  "valid": false
}

9. Edge cases to handle

# Code 519130 was valid in NAICS 2017 but restructured in 2022
old = iv.industry("519130")
print(old["valid"])  # may be False in 2022 edition

# Always validate against the current edition
current = iv.industry("541511")
print(current["valid"])    # True
print(current["edition"])  # '2022'

# NACE codes use dot notation
nace = iv.industry("62.01", system="nace")
print(nace["valid"])  # True

# NACE section (single letter)
section = iv.industry("J", system="nace")
print(section["description"])  # 'Information and communication'