Japan

Introduction On January 7, 2026, the Subcommittee on Foreign Exchange and Other Transactions of the Council on Customs, Tariff, Foreign Exchange and Other Transactions published its “Report on the Appropriate Framework for the Inward Direct Investment Screening System” (the “Report”). When the Foreign Exchange and Foreign Trade Act (the “FEFTA”) was amended in 2019 (effective May 8, 2020), a supplementary provision was included stipulating that, if deemed necessary in light of how the amended provisions had been implemented in the five years since such amended Act came into effect, such provisions would be reviewed, and appropriate measures taken based on the results of such review. Published five years after the 2019 amendments took effect, the Report examines the framework of the inward direct investment screening system and sets out the direction for its review, from the perspective of balancing two important policy objectives: further promoting inward direct investment that contributes to the sound development of Japan’s economy and ensuring economic security in an environment where the scope of national security considerations increasingly encompasses the economic sphere. This newsletter summarizes the key proposed reforms to the inward direct investment screening system set out in the Report, focusing on those matters with the most significant practical implications for foreign investors.   View original article here. [Author] Oki Osawa (Partner) Mayuko Takamura Tatsuyoshi Kitani

In January 2026, the Intellectual Property Divisions of the Tokyo District Court (the “TDC IP Division”) published their “Guidelines for Standard Essential Patents Judicial Mediation (SEPJM)” (the “Guidelines”)[1] which follows the earlier publication of the TDC IP Division’s “Guidelines for Patent Infringement Lawsuits Involving Standard Essential Patents” (the “SEP Lawsuit Guidelines”)[2],[3].  The Guidelines announced the TDC IP Division’s decision to implement judicial mediation for dispute cases involving standard essential patents (“SEPs”; and such mediation, “SEP Judicial Mediation”), as a special procedure under the intellectual property judicial mediation procedure[4], and set out important points regarding the SEP Judicial Mediation. According to the Guidelines, SEP Judicial Mediation is intended to resolve SEP‑related disputes including disputes over the licensing royalty under fair, reasonable, and non-discriminatory (“FRAND”) terms for the SEP holder’s entire global SEP portfolio (such royalty hereinafter referred to as the “Global FRAND Royalty”), on a global basis (i.e., not limited to disputes that arise in Japan) in a more expeditious manner than a SEP Lawsuit administered under the SEP Lawsuit Guidelines. In addition, where a settlement is not reached through mediation, the Guidelines address a point that is expected to influence consideration of the abuse of rights defense (the so-called FRAND defense) in a subsequent lawsuit or preliminary injunction proceeding. Accordingly, the Guidelines will likely have a significant impact on strategies for SEP-related disputes including whether parties should choose to bring a SEP Lawsuit initially or file a petition for SEP Judicial Mediation. We provide below a basic flowchart (with comments) describing the presumed progression of proceedings in a SEP Judicial Mediation in light of the Guidelines, and notable points regarding the Guidelines. [1] Our unofficial English translation of the Guidelines is provided as an annex to this newsletter for reference purposes only. The Guidelines (in Japanese) are published on the Tokyo District Court’s page on the website of the Courts in Japan (URL: https://www.courts.go.jp/tokyo/saiban/minzi_section29_40_46_47/SEPJM_chizai_jiken_teiki/index_2_1.html) (last accessed: April 1, 2026). As of April 1, 2026, the Intellectual Property Divisions of the Osaka District Court have not published similar guidelines for SEP-related judicial mediation. [2] For a overview analysis of the SEP Lawsuit Guidelines, please see our firm’s newsletter “Publication of the “Guidelines for Patent Infringement Lawsuits Involving Standard Essential Patents” by the Intellectual Property Divisions of the Tokyo District Court.” (NO&T IP Law Update No.17 (March, 2026)) [3] To add some further context regarding SEP lawsuits in Japan, in the Samsung Electronics Co., Ltd. v. Apple Japan GK case, the Intellectual Property High Court, in its judgment of May 16, 2014, ruled that Samsung, the patent holder, was not entitled to seek an injunction against Apple to stop sales of certain Apple products based on its finding that “Apple Inc. and Apple Japan have a willingness to obtain a license on FRAND terms” and concluded that “the exercise of the injunction right based on the patent right in question constitutes an abuse of rights (Article 1(3) of the Civil Code).” After that decision, there were virtually no court decisions addressing this issue until early 2025. However, on June 23, 2025, in the Pantech v. Google case, the Tokyo District Court issued a judgment (the “Tokyo District Court Judgment”) granting an injunction based on a FRAND-committed SEP for the first time in Japan. For a summary of the Tokyo District Court Judgment and its significance, please see our firm’s newsletter “The Japanese court first judgment to grant an injunction based on a FRAND‑committed SEP” (NO&T IP Law Update No.16 (November, 2025)). [4] The “Operation of the Intellectual Property Mediation Procedure” (in Japanese) setting out the TDC IP Division’s guidelines for intellectual property judicial mediations, is published on the Tokyo District Court’s page on the website of the Courts in Japan (URL: https://www.courts.go.jp/tokyo/saiban/minzi_section29_40_46_47/tizaityoutei/index.html), and a corresponding English guide, “Guide to IP Conciliation Proceedings,” is published on the Intellectual Property High Court’s page on the website of the Courts in Japan (URL: https://www.courts.go.jp/ip/eng/vc-files/eng/file/Guide_to_IP_Conciliation_Proceedings.pdf). Authors: Kenji Tosaki (Partner) Takahiro Hatori (Partner) Yujiro Fukuhara

Introduction Based on the instructions issued by Prime Minister Takaichi at the Meeting of Relevant Cabinet Ministers on November 4, 2025, regarding “the appropriate use and management of national land, including the framework for rules on land acquisition,”[1] public comment procedures have been initiated to amend relevant cabinet and ministerial ordinances to introduce mandatory nationality reporting and related requirements in connection with real estate transactions. This article provides an overview of the proposed amendments to related laws and regulations.   View original article here.   [Author] Eiji Miyagi (Partner) [1] Meeting of Relevant Ministers on Accepting Foreign Nationals and Realization of an Orderly Coexistence Society “On Realization of an Orderly Coexistence Society with Foreign Nationals (Prime Minister’s Instruction)” (https://www.kantei.go.jp/jp/singi/gaikokujinzai/kakuryokaigi/dai1/sorishiji.pdf)

Introduction Under the current Japanese tax framework, income derived from crypto asset transactions is generally not treated as capital gains, but, classified either as business income or miscellaneous income.  As a consequence, such income is subject to income tax in Japan at progressive rates, with a combined national and local maximum rate of 55.945%. This heavy tax burden compared to other developed countries has long been regarded as a major obstacle to crypto-related investment activities in Japan.  It is also an important consideration for foreign individuals holding significant volume of crypto assets when contemplating relocation to Japan or engaging in trading activities of crypto assets connected to the Japanese market. The Outline of 2026 Tax Reform released last December by the ruling parties and government indicates a substantial shift in the policy of crypto related taxation.  The reform contemplates the introduction of a fixed-rate separate taxation regime applicable to certain crypto asset transactions.  Given the potential impact of this development on foreign investors with ties to Japan, it is important to consider both the scope of the proposed regime and its implications to foreign investors.  Please note, however, that, at the time of writing, since the legislative wording related to the new regime has not been fully published, the precise scope of the regime has not yet been fully clarified. View original article here. [Author] Tsutomu Endo (Partner)