At the Intersection of Technology, Law, and Business
June 06, 2019 - Asia, Mergers + Acquisitions

Japan Is Tightening Regulations Applicable to Foreign Direct Investment in the Information and Communications Technology Sector

Chinese Interest High Despite Uncertainty

On May 27, 2019, the Japanese government published amended rules that aim to tighten the regulatory requirements applicable to foreign direct investment (tai nai chokusetsu toshi or FDI) under the Foreign Exchange and Foreign Trade Act of Japan (gaitame ho, or the “Act”).  Specifically, while the FDI regime requires a Foreign Investor to file its transaction with the Japanese authorities before investing in a Japanese target company engaged in a “restricted business,” the amended rules will add businesses related to the information and communications technology sector to the prescribed types of “restricted businesses.”  The obligation to complete a prior filing in respect of investment in a Japanese company that is engaged in a “restricted business” under the widened scope will apply to transactions taking place on or after August 31, 2019.

This client alert provides an overview of the FDI regime in Japan and the latest amendments to tighten the regulations.

Read our client alert.