Foreign Investment and FEFTA Procedures
in Japan
Where a foreign individual or overseas company makes an investment in a Japanese company, acquires shares, is appointed as an officer, changes the company’s business purpose, acquires real estate, or remits funds from abroad, prior notification or a post-transaction report may be required under Japan’s Foreign Exchange and Foreign Trade Act (FEFTA). We confirm whether the transaction is covered and the applicable deadlines before it is carried out.
Registration and FEFTA Procedures Are Separate
Even where a company formation or share acquisition is permissible under the Companies Act and commercial registration rules, this does not mean that no FEFTA procedure is required. FEFTA is founded on the principle of free cross-border transactions, but requires prior notification and review, or a post-transaction report, for certain investments made by foreign investors, on grounds such as national security, public order and public safety.
① whether the investor qualifies as a “foreign investor” under FEFTA;
② whether the target company’s business relates to a designated or core sector;
③ whether the transaction constitutes inward direct investment or a specified acquisition; and
④ whether an exemption is available. We organise these points before the transaction takes place.
Main Situations Where FEFTA May Apply
Company Formation & Capital Increase
We confirm the applicable procedure — reflecting the sector, the investor and the transaction — for capital contributed by a foreign investor to a new company, or subscription to a capital increase of an existing company.
Acquisition of Shares or Equity
Depending on whether the shares are listed or unlisted, the acquisition ratio, the counterparty and the target company’s business, prior notification, a post-transaction report, or treatment as a specified acquisition may need to be considered.
Officer Appointment / Change of Purpose
Consent to the appointment of an officer nominated by a foreign investor, or the addition of a business purpose related to a designated sector, can also fall within scope.
Acquisition of Real Estate in Japan
Where a non-resident acquires real estate in Japan, or a right relating to it, a report after the acquisition may be required.
Overseas Remittance & Capital Payment
We organize the remittance route, the relationship between the remitter and the investor, and bank confirmation documents, and confirm whether reporting is required for certain payments.
Foreign Companies & Overseas Parents
We confirm the investor’s nationality, place of business, beneficial owner, group structure and corporate evidencing documents, and arrange the agent and filing arrangements on the Japan side.
Prior Notification and Post-Transaction Reports
Prior Notification
For a transaction subject to prior notification, notification must be filed with the Minister of Finance and the minister with jurisdiction over the relevant business, through the Bank of Japan, before the transaction is carried out. Once filed, the transaction cannot proceed until the earliest date on which it may be executed. We confirm in advance the sector involved, the investor’s attributes, the details of the acquisition and whether an exemption applies.
Post-Transaction Report
For inward direct investment not subject to prior notification, or a transaction carried out under an exemption, a report may need to be filed after the transaction within a prescribed period and in a prescribed form. This differs in form and legal basis from the report required for an acquisition of real estate.
Prior notification not being required does not mean that no procedure at all is required.
Exemptions also carry standards that must be observed, and a report may still be required after the investment.
Our Support Process
Confirm the Transaction
Investor, target company, sector and transaction date.
Determine Applicability
Whether notification, reporting or an exemption applies.
Coordinate the Schedule
Align timing with registration and settlement.
Prepare Documents
Document the details of the investment and business.
Filing & Records
Handle the filing and ongoing follow-up.
Why Choose Seiwa Legal Office
Coordinated with Company Formation & Registration
As judicial scrivener, we coordinate the timing of registrations for incorporation, capital increases, changes of officers and changes of business purpose together with the related FEFTA procedures.
Administrative & Real Estate Perspective
From the standpoint of administrative scrivener and real estate transaction specialist, we also consider licensing and the reporting requirements for real estate acquisitions by non-residents.
Direct Support in Three Languages
The qualified professional personally handles matters in Japanese, Chinese and English, connecting information between overseas parent companies or investors and parties in Japan.
Frequently Asked Questions
If a foreign national establishes a company in Japan, is FEFTA notification always required?
This depends on the investor’s attributes, the form of investment, the target business and the details of the transaction. Separately from the company formation registration, we confirm whether prior notification or a post-transaction report is required.
Can prior notification be filed after the company is established?
For a transaction subject to prior notification, filing is, in principle, required before the transaction is carried out. Please consult us before the schedule for incorporation, payment of capital and registration is fixed.
If the business is not in a designated sector, is any procedure still needed?
Even where the business does not fall within a designated sector, a post-transaction report may still be required. We assess this taking into account whether the shares are listed, the acquisition ratio, the investor’s attributes and other factors.
What happens if a non-resident purchases real estate in Japan?
Depending on the purpose of the acquisition and other factors, a report after the acquisition may be required under FEFTA. This is confirmed separately from the registration of the transfer of ownership.
※This system may be revised. The information on this page is general in nature and does not guarantee that any individual transaction is exempt from notification or that any approval will be obtained.
Consult Us About Foreign Investment and FEFTA Procedures
Some prior notifications cannot be addressed once a transaction has already been carried out. Please consult us at the planning stage — for company formation, share acquisitions or real estate acquisitions.
Contact Us