Foreign Exchange and Foreign Trade Act (FEFTA) Filing
Why This Matters to You
If you are a non-resident of Japan — whether an individual living abroad or a foreign company — certain transactions you carry out here trigger reporting obligations under Japan’s Foreign Exchange and Foreign Trade Act (外国為替及び外国貿易法, “FEFTA”). Two situations come up most often in our practice:
- Acquiring real estate, or a right related to real estate, in Japan (e.g., ownership, leasehold, or other rights)
- Establishing a company in Japan, which can constitute an “inward direct investment” subject to FEFTA notification or reporting requirements
These filings are made to the Minister of Finance, submitted through the Bank of Japan. Missing or late filings can create complications later — for example, during a subsequent sale, financing, or corporate transaction — so it is worth handling them correctly the first time.
As a judicial scrivener, we regularly handle the real estate and corporate registrations that accompany these transactions. Under an arrangement authorized by the Ministry of Finance, we are also able to act as your agent for the related FEFTA online filings, so you do not need to manage a separate process with a different professional or navigate the system yourself from overseas.
Report on Acquisition of Real Estate or Rights Thereto in Japan
Under FEFTA, when a non-resident acquires real estate located in Japan, or a right related to it (such as a leasehold), the acquirer must submit a “Report on the Acquisition of Real Estate or Rights Thereto in Japan” (本邦にある不動産又はこれに関する権利の取得に関する報告書) within 20 days of the acquisition, filed via the Bank of Japan to the Minister of Finance.
Key points to be aware of:
- The filing requirement applies regardless of the price or size of the property. There is no minimum threshold.
- Who can file: The non-resident acquirer may file the report personally, or it may be prepared and submitted by a resident agent — which can include a real estate broker or, in our case, a judicial scrivener handling your registration.
- Filing method: The report can be submitted on paper or through the Bank of Japan’s online system; we use the online system, which is generally faster.
- Limited exemptions exist for real estate acquired for the non-resident’s own residential use (or that of family members/employees, though second homes and vacation homes do not qualify), for certain non-profit business purposes, or as the non-resident’s own office. These exemptions are narrowly defined, so we assess eligibility on a case-by-case basis rather than assuming a transaction qualifies.
Because this report is closely tied to the real estate registration itself, we typically prepare and file it as part of the same engagement in which we handle your ownership transfer registration — reducing back-and-forth and keeping your acquisition on schedule.
FEFTA Matters Related to Company Formation
When a non-resident — an individual living outside Japan, a foreign company, or a Japan-based company majority-owned by non-residents — establishes a company in Japan, or acquires shares or equity in an existing Japanese company, this generally qualifies as an “inward direct investment” (対内直接投資等) under FEFTA. Setting up a subsidiary in Japan, and similar company-establishment scenarios, typically fall under this category.
Depending on the nature of the investment, one of two procedures applies:
- Prior notification (事前届出). If the company’s intended business falls within one of the industry categories designated as sensitive on national security or public order grounds (for example, sectors involving weapons, aircraft, space development, nuclear energy, or certain advanced or dual-use technologies), a prior notification must instead be filed before the investment is made — generally within the six months preceding the investment — and a statutory waiting period (30 days in principle, which can be shortened or extended) applies before the investment may proceed. In these cases, a post-investment report is also required afterward, within 45 days of completion.
- Post-investment report (事後報告). For most inward direct investments — including incorporating a company in Japan — the standard requirement is a report filed after the investment is made, generally within 45 days of completion, submitted via the Bank of Japan to the Minister of Finance and the minister overseeing the relevant business sector.
Certain qualifying investors may be able to use an exemption from the prior notification requirement (for example, by agreeing not to take a board seat or access non-public technical information), in which case a post-report is still required in lieu of prior notification.
Because the applicable route — post-report or prior notification — depends on the specific business the company will conduct, we review this together with your incorporation plans at the outset, so the FEFTA filing schedule is built into your company formation timeline from the start, rather than discovered afterward.
How We Can Help
- Preparing the required report(s)
- Filing on your behalf through the Bank of Japan’s online system as your authorized agent
- Coordinating the FEFTA filing with the related real estate or corporate registration, so both are handled in a single, streamlined process
If you are a non-resident planning to acquire property in Japan or establish a company here, please contact us early in the process. Handling the FEFTA filing correctly from the outset helps avoid delays and complications down the road.
