Nagashima Ohno & Tsunematsu | View firm profile
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.
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[Author]
Oki Osawa (Partner)