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An Introduction to FEFTA for Foreign Startups Considering Entry into Japanby：Kensho Onoda、Watchaya Peungnam Japan’s Foreign Investment Regulations (overview) When acquiring a company, making an investment, or taking over a business in Japan, some countries only require consideration of company law, competition law, or investment agreements. In contrast, Japan’s Foreign Exchange and Foreign Trade Act, commonly known as the FEFTA, is also crucial. The FEFTA does not generally prohibit investment in Japan itself. However, it establishes a system where authorities can review certain investments in advance if they relate to national security, public order, public safety, or the Japanese economy. This is the first point of caution for foreign startups….
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Cross-border Transfer of Personal Databy：Kensho Onoda、Poom Kerdsang Introduction When foreign startups expand into Japan, their Japanese operations frequently need to transfer data back to the home country. Typical examples include centrally managing Japanese customer data on a headquarters server or having the home country’s engineering team analyze Japanese user data. This article explains key points to be aware of under the APPI when conducting cross-border transfers of personal data. It highlights Japan’s unique regulatory framework and differences from the EU’s GDPR. Overview Under the APPI, providing personal data to a “third party located abroad” is subject to special regulations compared to ordinary third-party…
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Regulation of Business Outsourcing in Japan : the Amendment to the Subcontract Actby：Kensho Onoda、Poom Kerdsang What is the Act on the Amended Subcontract Act? The Act Against Delay in Payment of Fees, etc. to Small and Medium-sized Entrusted Business Operators in Manufacturing and Other Specified Fields (the “Amended Subcontract Act”) is designed to protect small and medium-sized enterprises (SMEs) and ensure transaction fairness. Previously known as the Subcontract Act, the legislation was substantially amended and renamed, with the new regulatory framework taking effect on January 1st, 2026. The Amended Subcontract Act imposes certain restrictions on the principle of contractual freedom, mandating specific obligations and prohibitions on the Entrusting Business Operator. Therefore,…
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Navigating Contract Law in Japan: A Guide to Civil vs. Common Law for Startupsby：Kensho Onoda、Poom Kerdsang Introduction Establishing a business in Japan requires navigating a legal landscape fundamentally different from other countries. A core premise is that Japan operates under a Civil Law system, distinct from the Anglo-American Common Law tradition. Contract under Civil Law 1. Civil Law Characteristics Civil law is a legal system developed primarily in France and Germany. It is characterized by a comprehensive legal order built around codified statutes. Japan’s Civil Code, enacted in the late 19th century, was also significantly influenced by the German and French Civil Law systems. Consequently, Japanese legal practice begins by considering “which…
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Overview of Japan’s Personal Information Protection Lawby：Kensho Onoda、Poom Kerdsang Summary Introduction Japan’s Act on the Protection of Personal Information (“APPI”) is a comprehensive data protection framework designed to balance the protection of individual (data subject) rights while promoting the effective use of data. APPI imposes obligations such as specifying and notifying the purpose of use, prohibiting use beyond the specified purposes, implementing security safeguards, restricting the provision of personal information to third parties, and responding to requests from individuals. While APPI shares similarities with other major data protection regimes, including the GDPR, it also incorporates several unique concepts, such as “Personal Related Information”, that require…
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JAPAN Corporate Governance Structureby：Kensho Onoda、Poom Kerdsang Introduction One of the most important initial decisions when establishing a corporation in Japan is to decide on an appropriate corporate governance structure. The corporate governance structure determines how decision-making, business execution, and oversight are structured within the company. Under Japan’s Companies Act, companies have a certain level of flexibility in selecting and combining governance bodies, provided that the statutory requirements are met. An effective governance structure should reflect the company’s size, capital composition, and shareholder relationships. This article provides a detailed explanation of the fundamental concepts of corporate governance structure, available legal framework, and practical…
