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EBC Survey on the Business Impact of Japan’s Evolving Policies Affecting Foreign Nationals

Europe vs North America Golf 2026

Statement by the European Business Council in Japan and Japan Business Council in Europe on the EU-Japan Digital Partnership – 4 May 2026

Tax Roundtable – 17 April 2026

Cybersecurity Conference – EBC Digital Committee, 7 April 2026

EBC Event: The Future of the Automotive Industry – 3 April, 2026

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DIGITAL WHITE PAPER

NEW ISSUES

  • published_date_iconPublished:

    Enhancement of the NISA framework and tax regime

    Committee:
    Asset Management
    status:
    New

    Since its launch in January 2024, the New NISA has delivered significant results as the cornerstone of Japan's asset-building policy aimed at accelerating the shift "from savings to investment." Since the introduction of the new scheme, the number of NISA accounts has increased steadily, and the government's target for cumulative investment purchases has been achieved ahead of schedule. Interest among individual investors in long-term asset building has grown substantially, accompanied by a gradual shift of household financial assets from cash and deposits into investments. As a result, long-term, regular, and diversified investing has begun to take root more broadly among Japanese households. These achievements can largely be attributed to the reforms introduced under the New NISA, including the establishment of a permanent tax-exempt regime, removal of time limit on tax-exempt holdings, and introduction of a lifetime investment allowance, all of which have created an environment in which individuals can pursue long-term asset building with greater confidence.Nevertheless, as the use of the New NISA continues to expand, several challenges have emerged that need to be addressed in order to further enhance the quality and effectiveness of the scheme. First, although the number of NISA accounts has increased significantly, a considerable number of accounts remain inactive or are used only to a limited extent. In addition, while public awareness of the scheme has improved, the level of understanding of long-term investing and risk diversification remains uneven. Further efforts are therefore needed to promote active utilization of the scheme and to strengthen financial literacy so that more individuals can engage in sustained asset building. Second, investment flows have become heavily concentrated in low-cost equity index funds, particularly those tracking global and U.S. equity markets, leaving room for improvement from the perspective of investment diversification and product diversity, both of which are fundamental objectives of the scheme. Moreover, because the current framework has largely been designed around publicly offered investment trusts, it does not fully reflect the characteristics of today's increasingly diverse investment products. Going forward, while preserving the core principles of long-term, regular, and diversified investing, the institutional and tax framework should be enhanced by expanding the range of eligible designated indices under the Instalment Investment Quota (“Tsumitate Toushi-Waku”), broadening eligible investment products to include active ETFs, and reviewing the permitted uses of derivatives, thereby providing investors with a wider range of investment choices.Looking ahead, it is important to continue developing the New NISA as a key pillar supporting the long-term asset building of every individual in Japan. This will require further strengthening financial and investment education to reinforce long-term, regular, and diversified investing, promoting greater diversity in investment products, and establishing a policy framework capable of meeting the evolving and diverse needs of investors. Through these efforts, Japan should promote stable household asset formation while facilitating the smooth allocation of a broader range of household assets into the capital markets, thereby advancing the realization of Japan's vision as a leading asset management nation and supporting the continued development of its asset management industry and capital markets.(Kindly contributed by International Bankers Association of Japan)

  • published_date_iconPublished:

    Identification of shareholders

    Committee:
    Asset Management
    status:
    New

    Japanese companies have long sought a mechanism to identify beneficial (actual) shareholders, rather than merely nominal shareholders recorded on the shareholders register. In this context, beneficial shareholders are those who exercise, or instruct the exercise of, voting rights, whereas nominal shareholders are the entities registered as shareholders on behalf of underlying investors. The stated objective of introducing such an identification regime is to enable issuers to engage in meaningful and constructive dialogue with the investors who can influence the company's strategy and corporate governance.In April 2025, the Ministry of Justice (MOJ) established a Working Group to examine the issue with a view to amending the Companies Act. The MOJ is currently considering the introduction of two complementary shareholder identification mechanisms, both of which could have significant implications for foreign banks providing custody services in Japan.The first mechanism would be issuer-driven, whereby an issuer could request shareholder identification information through the custody chain. The framework would broadly mirror the approach adopted under the European Union's Shareholder Rights Directive II (SRD II). Custodians would be required to respond to such requests and could be subject to monetary penalties for failing to provide the requested information or for providing inaccurate information.The second mechanism would require large shareholders to disclose their holdings directly to both the issuer and the relevant authorities, in a manner similar to Japan's existing large shareholding reporting regime for holdings exceeding 5%. Failure to comply could result in the suspension of the shareholder's voting rights.With respect to the first mechanism, the proposed obligation would apply only to intermediaries that are also registered as nominees on the shareholders register. In practice, this would place the reporting obligation—and the associated penalties—primarily on non-Japanese global custodians, rather than on Japanese intermediaries that merely facilitate the opening and maintenance of securities accounts at the central securities depository, JASDEC, without themselves acting as registered nominees.This approach risks creating significant loopholes in the proposed identification framework while imposing an uneven regulatory burden on Japanese and non-Japanese custodians. Such differential treatment could undermine the principle of competitive neutrality and raise concerns regarding consistency with Japan's international trade commitments, including the principles underpinning the WTO framework. Consideration has also been given to extending sanctions beyond monetary penalties to include the suspension of voting rights.Under the second mechanism, the principal sanction for non-compliance would be the suspension of voting rights. The MOJ proposes that the issuer itself determines whether voting rights should be suspended and would notify the beneficial shareholder accordingly. As the proposal does not contemplate prior judicial review, it creates a potential risk that issuers could exercise this authority inappropriately or inconsistently.To mitigate this risk, any suspension of voting rights should be subject to robust procedural safeguards. At a minimum, such a decision should require formal approval by the board of directors, including the support of independent outside directors, and should be limited to cases involving intentional non-compliance or gross negligence rather than inadvertent or technical breaches.Exempting users of the “special reporting” regime under the FIEA from the sanction of non-compliance on notification requirements should also be considered. Financial institutions subject to the special reporting regime are, by definition, prohibited from engaging in certain material proposal activities and must maintain their ownership ratio at 10% or below. As such, they should not, in principle, be subject to voting rights suspension.(Kindly contributed by International Bankers Association of Japan)

  • published_date_iconPublished:

    Identification of shareholders

    Committee:
    Banking
    status:
    New

    Japanese companies have long sought a mechanism to identify beneficial (actual) shareholders, rather than merely nominal shareholders recorded on the shareholders register. In this context, beneficial shareholders are those who exercise, or instruct the exercise of, voting rights, whereas nominal shareholders are the entities registered as shareholders on behalf of underlying investors. The stated objective of introducing such an identification regime is to enable issuers to engage in meaningful and constructive dialogue with those investors who are in a position to influence the company's strategy and corporate governance.In April 2025, the Ministry of Justice (MOJ) established a Working Group to examine the issue with a view to amending the Companies Act. The MOJ is currently considering the introduction of two complementary shareholder identification mechanisms, both of which could have significant implications for foreign banks providing custody services in Japan.The first mechanism would be issuer-driven, whereby an issuer could request shareholder identification information through the custody chain. The framework would broadly mirror the approach adopted under the European Union's Shareholder Rights Directive II (SRD II). Custodians would be required to respond to such requests and could be subject to monetary penalties for failing to provide the requested information or for providing inaccurate information.The second mechanism would require large shareholders to disclose their holdings directly to both the issuer and the relevant authorities, in a manner similar to Japan's existing large shareholding reporting regime for holdings exceeding 5%. Failure to comply could result in the suspension of the shareholder's voting rights.With respect to the first mechanism, the proposed obligation would apply only to intermediaries that are also registered as nominees on the shareholders register. In practice, this would place the reporting obligation—and the associated penalties—primarily on non-Japanese global custodians, rather than on Japanese intermediaries that merely facilitate the opening and maintenance of securities accounts at the central securities depository, JASDEC, without themselves acting as registered nominees.This approach risks creating significant loopholes in the proposed identification framework while imposing an uneven regulatory burden on Japanese and non-Japanese custodians. Such differential treatment could undermine the principle of competitive neutrality and raise concerns regarding consistency with Japan's international trade commitments, including the principles underpinning the WTO framework. Consideration has also been given to extending sanctions beyond monetary penalties to include the suspension of voting rights.Under the second mechanism, the principal sanction for non-compliance would be the suspension of voting rights. The MOJ proposes that the issuer itself determines whether voting rights should be suspended and would notify the beneficial shareholder accordingly. As the proposal does not contemplate prior judicial review, it creates a potential risk that issuers could exercise this authority inappropriately or inconsistently.To mitigate this risk, any suspension of voting rights should be subject to robust procedural safeguards. At a minimum, such a decision should require formal approval by the board of directors, including the support of independent outside directors, and should be limited to cases involving intentional non-compliance or gross negligence rather than inadvertent or technical breaches.(Kindly contributed by International Bankers Association of Japan)

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URGENT ISSUES

No Issue found.

RESOLVED ISSUES

  • published_date_iconPublished:

    Temporary in-activation of gaiben licence

    Committee:
    Legal Services
    status:
    Resolved

    With the increased use of secondments within the legal services field, it is not uncommon that registered gaiben temporarily leave Japan and then come back to again practise foreign law in Japan. For a domestic lawyer it is possible to either (1) continue paying their bar membership fees while remaining on the bar rolls with their original registration number or (2) stop paying fees whilst temporarily suspending their license only to re-activate it when returning to Japan through a simple application process. This is not possible for a gaiben. The only thing possible for a gaiben is to re-apply from scratch. The EBC sees no reason for this blatant discrimination of foreign lawyers.

  • published_date_iconPublished:

    Branches

    Committee:
    Legal Services
    status:
    Resolved

    Legislation was finally passed in 2014, permitting a gaiben law firm to incorporate  as a hojin, and thereby become eligible to open more than one branch. However, the 2014 legislation did not permit gaiben and bengoshi together to establish a hojin. The effect is to severely limit the usefulness of the 2014 legislation. We understand that the changes in the Act to permit gaiben and bengoshi to establish a hojin together have been enacted and we await confirmation that the changes have been implemented by no later than September 2020.

  • published_date_iconPublished:

    Malt and quota management system

    Committee:
    Food & Agriculture
    status:
    Resolved

    Japan had a tariff quota system for malt even from before the EPA, which introduced a quota for EU origin malt. However, only companies manufacturing beer themselves or importing exclusively for the use of a particular brewery were allowed to apply for a quota, discriminating against traders wishing to import on their own account for selling to multiple customers in small volumes or on short notice. Following multi-year efforts by the EBC and the EU, this was remedied in late 2021, opening the door to importers to provide for a large variety of EU-origin malts even in smaller quantities for the flourishing craft beer market, and for non-brewery users.  However, an administrative burden remains, which is unreasonable considering the quota is not fully utilized and all eligible quota applications are being granted.

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Eurobiz_June2022_cover_HI

Eurobiz Japan

JUNE 2022

VIEW ARCHIVE

NEWS FEED
  • Japan mulls exception to non-nuclear principles in security strategy (The Mainichi)
  • Japan Govt to Establish Cyberattack Response Team Involving Public, Private Sectors (The Japan News)
  • Japanese Companies Increasing Efforts to Develop Battery Energy Storage Business amid Ongoing Mideast Situation (The Japan News)
  • New Institute to Use AI to Analyze Global Research Data; Aims to Identify Trends in Vital Areas of Science, Technology (The Japan News)
  • EU’s new levy on parcels kicks in (Japan Today)
  • Narita airport to consolidate its 3 terminals into 1 for easier movement (Kyodo News)
  • Japan’s Finance Industry Step Up Efforts to Secure IT Talent Through Student Internships Amid Shortage of Personnel (The Japan News)
  • Law to establish “second capital” to back up Tokyo goes into effect (Kyodo News)
  • Takaichi, Merz Confirm Aim of Strengthening Economic Security Cooperation (The Japan News)
  • Japan seeks creation of arms corporation to bolster defense (The Asahi Shimbun)
  • Japan to compile emergency cybersecurity package by next week: Takaichi (The Mainichi)
  • Japanese Government Rushes to Establish Bilateral Consultations with Like-Minded Nations for Times of Crisis (The Japan News)
  • Industries with Dual-Use Technology to Get Government Help; Japan Aims to Boost Economy, Prepare for Contingencies (The Japan News)
  • Japan weighs registry to strengthen monitoring of foreign interference (Kyodo News)
  • World’s 1st hydrogen engine for large ships cuts CO2 emissions by 95% (Kyodo News)
  • Hiring of Foreign Drivers in Japan Spreading in Logistics Industry, Aim to Cope with Worker Shortage (The Japan News)
  • Japan to overhaul tax-free shopping for foreign visitors to curb resale (The Mainichi)
  • EU Incentive Scheme Unlikely to Cover Japanese-Made EVs after Franco-German Agreement (The Japan News)
  • Japan Govt Panel to Discuss Strengthening Cyber Defense of Telecom Carriers (The Japan News)
  • Japan Govt Publishes English-Language Booklet on Prime Minister Sanae Takaichi’s Economic Policies (The Japan News)
  • Efforts to Bolster Japan’s Production of Next-Generation Solar Cells Are Powering Up (The Japan News)
  • Japan business manager visa holders leaving without reentry permits surge (Kyodo News)
  • Japan mulls including railways in defense-related expenditure: sources (Kyodo News)
  • Japan Seeks to Ensure Stable Supply of Critical Medical Devices (The Japan News)
  • Defense Ministry to Study Development of Small Rocket That Will Quickly Launch Replacement for Damaged Satellites (The Japan News)
  • Japan’s Government Considers Introduction of Nuclear-Powered Submarines in SDF (The Japan News)
  • IEA to accelerate oil reserve release, says 100 million barrels still to come (Japan Today)
  • Japan remains 12th in global innovation ranking, trails South Korea, China (Kyodo News)
  • Japan Eyes Autonomous Transport Ships for SDF (The Japan News)

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Some 200 of the over 2,500 affiliated local European companies and individuals participate directly in one or more of the EBC’s 24 industry committees covering a wide variety of economic sectors.