Foreign Exchange and Foreign Trade Act Notification Application
Applying to the Bank of Japan for Prior and Post‑Investment Approval for Foreign Investors
When foreign companies or individuals invest in Japan, establish a company, or acquire shares in a Japanese enterprise, prior notification or post‑investment reporting may be required under the Foreign Exchange and Foreign Trade Act (FEFTA), depending on factors such as the nature of the investment, the industry category, and the investor’s nationality. In particular, when the investment involves designated sectors regulated by the Japanese government, the relevant approval must be obtained before remitting capital or proceeding with the investment.
We can assist in determining whether your investment or company establishment plan requires FEFTA notification, and prepare and handle the necessary procedures according to the needs of each case. This ensures that you fully understand the reporting requirements before establishing a company or making an investment in Japan, reducing the risk of delays or complications caused by incomplete procedures.
What is the Foreign Exchange Act (FEFTA / Foreign Exchange and Foreign Trade Act)?
Japan imposes restrictions on foreign investment in industries that may pose risks to national security or have not yet been fully liberalized. When foreign investors acquire shares in an unlisted Japanese company or more than 1% of a listed company, prior notification procedures must be completed before the investment.
When establishing a joint‑stock company in Japan as a foreign investor, prior notification and post‑investment reporting are required if the business falls under specially regulated sectors.
Restricted Sectors under FEFTA
Special Restricted Sectors Requiring FEFTA Prior Notification
Reasons for Restrictions | Target Sectors |
|---|---|
| National Security | Weapons, Aircraft, Nuclear Energy, Rare Earths, Space Development – Related Manufacturing, and Manufacturing of Products for Military Use |
| Public Order | Electric Power Industry, Gas Industry, Heat Supply Industry, Telecommunications Industry, Broadcasting Industry, Water Supply Industry, Railway Industry, Passenger Transportation Industry, and Others |
| Public Safety | Biological Preparations Manufacturing, Security Services, Information Processing – Related Equipment and Components Manufacturing, Information Processing–Related Software Manufacturing, and Information and Communications Services Industries |
| Economic Vitalization | Agriculture, Forestry, and Fisheries; Petroleum Industry; Leather and Leather Products Manufacturing; Shipping Industry; Maritime Transport Industry; Fuel Retail Industry, and Others |
| Newly Added Sectors in 2023 | Fertilizer Sector; Importers of Potassium Chloride and Related Goods; Manufacturing of Machine Tools and Industrial Robots; Manufacturing of Materials for Battery Production; Metal Mining Refining; Metal 3D Printing and Metal Powder Manufacturing; Permanent Magnets and Materials Manufacturing; Semiconductor Equipment Manufacturing; Natural Gas Wholesaling; Ship Components and Engine Manufacturing |
| Note: This amendment includes | 1. Unmanned aerial vehicles (UAVs) are included among core industries and fall under aircraft manufacturing. 2. Antimicrobial substance preparations and petroleum refining fall under specially licensed industries. |
Application Authority
- Bank of Japan
- Website: https://www.boj.or.jp//
1. Prior application must be submitted before remitting capital, and approval must be obtained in advance from the Bank of Japan and all relevant governmental authorities.
2. Post-investment reporting must be submitted by the 15th day of the month following the month in which the capital remittance occurs.
Application Process
1
Foreign Investor
2
Bank of Japan (Prior Application)
3
Relevant Government Authorities
4
Approval
5
Articles of Incorporation Notarization
6
Legal Affairs Bureau (Company Registration Application)
7