Prior to the amendments, a foreign investor included (1) non-residents of Japan, (2) foreign companies, (3) Japanese companies whose shares are 50% or more owned by non-residents or foreign companies, and (4) direct subsidiaries of Japanese companies listed in (3). According to the amendments to the Forex Law, a natural or non-resident company is a company organized in Japan with 50% or more of its voting rights controlled directly or indirectly by a non-resident of Japan (a foreign investor) seeking to obtain a stake of only 1% in companies of importance to national security. Public safety, public infrastructure or the Japanese economy must undergo a prior notification and approval process with the Japanese government prior to the completion of the proposed investment. The previous version of the Forex law requires such prior notification and approval only if foreign investors seek to obtain a 10% stake in the relevant Japanese companies. The amendments are intended to encourage foreign direct investment for healthy economic growth while ensuring sufficient scrutiny of foreign direct investment activities that may pose risks to national security in Japan. The flat-rate exception applies to the following foreign financial institutions that are licensed or registered in a manner that is subject to regulation and/or supervision under financial regulatory laws in Japan and other jurisdictions: (3) If a foreign investor who has made a notice in accordance with Article 27, paragraph (1) or paragraph (1) of the preceding Article does not recommend amending the content of the direct article withdrawn into itself follows: investments, etc., or certain acquisitions for which the notification has been made, even if the foreign investor has notified the acceptance of the recommendation referred to in Article 27(7) (including the corresponding request in accordance with paragraph 7 of the preceding Article) or infringes an order to change the content of the inward direct investment, etc. or certain acquisitions issued in accordance with Article 27, paragraph 10 (including the corresponding request in accordance with paragraph 7 of the preceding Article) (in the case of domestic direct investment, etc., limited to the date on which it is established that foreign direct investment, etc. falls into the category of foreign direct investment, b. with regard to national security), the Minister of Finance and the Minister responsible for the enterprise may inform the foreign investor who made the foreign direct investment, etc. or a specific acquisition for the sale of the shares or part of the shares resulting from the direct direct investment in the country, etc. or a specific acquisition has been acquired (limited to the part subject to the amendment where the competent ministers recommend a change in the number or amount of shares or the number or amount of shares participating in domestic direct investment), etc., or a specific acquisition in accordance with Article 27(5) or (5), the preceding article or part; which is the subject of the amendment where the competent ministers order a change in the number or amount of shares or the number or amount of equity shares directly involved in direct investment, etc. or make certain acquisitions in accordance with the provisions of Article 27(10) (including the corresponding application in accordance with paragraph 7 of the preceding Article) or other necessary measures in accordance with the provisions of the decision of Cabinet.
2. Where a foreign investor who has made a notification pursuant to Article 27(1) or (1) of the preceding Article has made a false notification in connection with that notification and the Minister of Finance and the Minister responsible for the enterprise determine that the investment directly contributed, etc. or the specific acquisition for which the notification was made, falls under the category of foreign direct investment, etc. with regard to national security or the category of specific acquisitions affecting national security, they may charge the foreign investor who made the foreign direct investment, etc. or the specific acquisition, after consulting the opinions of the Council of Customs, Customs, Currency and Other Transactions, to take the necessary measures in accordance with the provisions of the decision of the Cabinet seized. I. domestic direct investment, etc., likely to give rise to one of the situations referred to in points (a) or (b) (limited to domestic direct investment, etc.). by a foreign investor of a Member State of a multilateral treaty or other international agreement on foreign direct investment, etc., established by cabinet decision and to which Japan has acceded (hereinafter referred to as the "Treaty, etc.") and which is free from the obligations under the Treaty, etc., with regard to the removal of restrictions on foreign direct investment, etc. and foreign direct investment, etc. by a foreign investor from a State other than the States members of the Treaty, etc., which would be free from these obligations if the State were a Member State of the Treaty, etc.) Therefore, the new PS-PR filing rules will apply to share purchases and other FDI activities conducted on or after June 7, 2020.
If a foreign investor plans to purchase shares or engage in other FDI activities as of June 7, 2020, a PR-SP should be filed during this 30-day transition period. If a foreign investor (as explained below, a foreign investor) acquires shares of a Japanese company and such an acquisition is considered a foreign direct investment (FDI)[1], FEFTA requires that a notification be submitted to the Japanese government through the Bank of Japan. [2] If a listed Japanese target company (target company) operates in certain "designated business sectors" that may affect Japan`s national security or public good, the foreign investor is required to submit a prior notice of share purchase (PN-SP) before purchasing shares. If the target company does not operate in a specific industry, it is sufficient to submit a post-facto investment report (post-facto investment report) after the acquisition of the shares. In addition to foreign direct investment in Japanese companies, which was primarily subject to FEFTA, any vote of a foreign investor that held at least one third of the voting rights of a Japanese company for the purposes of such a company was subject to prior notification. In addition, as a result of the implementation of the amended Regulations, the scope of non-investment shares subject to pre-filing requirements will be expanded to include the following measures (collectively, "Restricted Measures") taken by foreign investors with respect to Japanese companies engaged in restricted transactions: Please note that a foreign investor is not required to obtain pre-transaction approval, if a company has indicated only limited activities in its company documents (e.g. articles of association, commercial register), but has not been active in these sectors within 6 months of the investment. However, even in this case, the foreign investor must submit a post-investment report if he holds 10% or more of the voting rights of the investee. .
