We are pleased to share the August 2022 issue of Japan Corporate & Finance Insights. This newsletter is designed to keep you current on what we consider to be important recent legal developments involving Japanese corporate and finance matters.

＜TOPICS＞
Investment in Japanese Startups (By Yusuke Hayashi)

In recent years, foreign investors have begun investing in Japanese startups. Because Japanese startup finance practices share many similarities with those in Silicon Valley, the “mecca” of startups, it should be easy for foreign investors to understand them. On the other hand, the startup environment in Japan has some unique features that are attributable to Japanese laws and business practices.

Some say that foreign investors will be hesitant to invest in Japan in the future due to rising interest rates in the U.S.  However, we believe that investors will continue to be drawn to promising startups in Japan even under such adverse conditions, and understanding the latest practices in venture financing will become even more important. In this letter, we introduce certain features of Japanese startup finance practices which foreign investors should be aware of, as well as recent amendments to the Foreign Exchange and Foreign Trade Act (“FEFTA”) and corporate registry practice in Japan.