We are pleased to share the July 2026 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＞

Amendment to the Foreign Exchange and Foreign Trade Act (Part I) (By Hikocho Irie and Yuki Sato)

On June 5, 2026, an Act to partially amend the Foreign Exchange and Foreign Trade Act ("FEFTA") was promulgated. Among other things, the amendment introduces indirect acquisition rules under which a prior notification may be required even where the target of an M&A transaction is a foreign corporation—provided that such foreign corporation holds a certain percentage of the voting rights in a Japanese company. In other words, even if no change occurs at the level of the Japanese subsidiary's shares themselves, the acquisition of the foreign parent may trigger a filing obligation under the Japanese FDI regime. 

Under the amendment, the exercise of voting rights by a foreign investor with respect to the appointment of officers of such foreign corporation, etc. or its parent company, etc. will also be added to the definition of "FDI". 

With the introduction of these indirect acquisition rules, a prior notification under the Japanese FDI regime may be required when a foreign investor acquires a certain percentage of voting rights in a certain foreign corporation, etc. or exercises voting rights with respect to the appointment of officers of such foreign corporation, etc. or its parent company, etc. Furthermore, the amendment provides for the codification of the treatment of measures relating to national security, etc. in connection with a prior notification. This may help the submitter to predict the timing of completion of the review. 

The effective date is to be “a date specified by Cabinet Order within a period not exceeding one year from the date of promulgation.” This article focuses on the addition of a new category of FDI and codification of measures relating to national security, etc. under the amendment.