Clifford Chance

Reform of Foreign Direct Investment Regulations in Japan: Expansion of Pre-Transaction Approval Regime

25 November 2019

Japan has been tightening the regulation of the foreign direct investments since Spring 2019, though the threshold for the acquisition of shares in a Japanese listed company in regulated sectors above which foreign investors are required to obtain prior approval has remained at 10%. Until now that is. From Spring 2020, the threshold will be reduced to 1%. While certain proposed exemptions may be applicable, foreign investors, especially those who intend to proactively communicate with the management of target companies in regulated sectors, should bear these changes in mind and account for this in timing considerations.

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