Foreign investors forming, acquiring or funding a company in Japan should check the Foreign Exchange and Foreign Trade Act (FEFTA) before fixing the transaction date. Depending on the investor, the transaction and the target business, a prior notification or a post-transaction report may be required. Company registration and FEFTA procedures are separate, but their schedules often need to be coordinated.
What FEFTA reviews
Japan generally permits cross-border investment, while reviewing certain inward direct investments from the perspectives of national security, public order, public safety and the sound operation of the Japanese economy. The filing analysis is not determined by nationality alone.
Five points that should be checked
- Investor: whether the person or entity is a “foreign investor” under FEFTA, including ownership and control relationships.
- Transaction: share or equity acquisition, incorporation funding, a substantial loan, establishment of a branch, appointment of a director or another covered act.
- Target business: whether the Japanese company conducts a designated or core-designated business.
- Country or region: whether the investor’s nationality or location affects the filing category.
- Exemption: whether an exemption is available and whether all exemption conditions can be observed.
Prior notification and post-transaction reporting
If prior notification is required, the transaction must not be carried out until the applicable waiting period has ended or has been lawfully shortened. If prior notification is not required, a post-transaction report may still be necessary. The foreign investor is generally the filer; a non-resident investor ordinarily files through a resident agent. Filings are submitted to the competent ministers through the Bank of Japan.
The 2026 FEFTA amendment
An amendment to FEFTA was promulgated on June 5, 2026 to enhance Japan’s foreign investment screening system. It addresses risk-mitigation measures, indirect investment, certain domestic investments under the control or strong influence of high-risk foreign persons, risks involving non-designated sectors, and inter-ministerial cooperation. Implementing regulations were still being developed in July 2026. Effective dates and detailed rules must therefore be checked against the official information available when the investment is planned.
Coordinate the filing before incorporation or closing
A useful review begins with the ownership chart, ultimate beneficial ownership, investor nationality and residence, transaction documents, target company’s articles and actual business, investment amount, voting rights, intended directors and proposed closing date. Making the FEFTA check only after registration or payment can create avoidable timing and compliance risks.
Support from Seiwa Legal Office
- Company incorporation and commercial registration
- Initial organization of the investment structure and filing schedule
- Preparation and coordination of FEFTA filings within the authorized scope
- Coordination with financial institutions and other professionals when required
- Direct communication in English, Chinese and Japanese
For related services, see our English company formation guide and English Legal Services.
Last reviewed: July 2026. Filing requirements are transaction-specific. Please confirm the current law, regulations, notices and official guidance before acting. Official information: Ministry of Finance—2026 FEFTA amendment and Bank of Japan—FEFTA procedures.