Government & Regulatory Affairs in Japan

Essentials guide · Source-checked research100% of statements checked against a source9 checked against an official source30 checked against a secondary sourceChecked 2026-10-19Not yet professionally reviewed

• Under the Foreign Exchange and Foreign Trade Act (FEFTA), prior notification is required for inward direct investment where national security concerns are implicated, with triggers including acquiring 1 percent or more of the shares or voting rights of a listed company and any share acquisition in an unlisted company where no exemption applies.

  Foreign investors; whether a target is in a designated sector depends on its actual business activities. Limited exemptions exist.law.asia (Chuo Sogo: Katsuya Hongyo and Miki Fukada) · checked 2026-10-19

• A 30-day waiting period applies in principle after a FEFTA prior notification, which may be shortened or extended up to five months in total.

  Investments subject to prior notification.law.asia (Chuo Sogo: Katsuya Hongyo and Miki Fukada) · checked 2026-10-19

• A post-closing report under FEFTA is due within 45 days of completing the transaction where one is required.

  Investments subject to post-investment reporting.law.asia (Chuo Sogo: Katsuya Hongyo and Miki Fukada) · checked 2026-10-19

• An investor whose nationality is neither Japan nor a country or region listed in Appendix 1 of the Inward Investment Order is subject to prior notification, to be made within six months before the transaction.

  Inward direct investment by investors from non-listed countries; the Bank of Japan is the competent authority for the forms.Japan External Trade Organization (JETRO) · checked 2026-10-19

• The research and development tax credit was revised for fiscal years beginning on or after 1 April 2026, with the general credit capped at 20 percent of corporate tax liability.

  R&D where the resulting IP is owned by the Japanese taxpayer; additional credits may apply.PwC Worldwide Tax Summaries · checked 2026-10-19

• Local hubs revitalisation tax measures generally apply to business sites outside Tokyo, Osaka and Nagoya.

  PwC Worldwide Tax Summaries · checked 2026-10-19

• Reports on the acquisition of shares or equity under the inward direct investment rules are handled by the International Department of the Bank of Japan.

  FEFTA reporting.Japan External Trade Organization (JETRO) · checked 2026-10-19

• Draft revised Merger Guidelines were put to public comment, with the comment period closing on 31 August 2026.

  Pending change; final text and effective date not confirmed.Legal 500 Country Comparative Guide (Ikeda & Someya) · checked 2026-10-19

Read the full guide: Entry, investment and company formation · Licensing, incentives and sector rules