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Japan: Regulatory changes and business opportunity in 2016

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Japan: Regulatory changes and business opportunity in 2016

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Over the past 12 months, Japan has implemented two major regulatory changes that are likely to impact business in 2016: the Residency requirement for company representatives and the My Number law.

Dr. Junichi Kato, Managing Director of TMF Japan, outlines recent regulatory changes – the impact and business opportunity that every company operating in Japan should know.

Residency requirement for company’s representative

To establish a legal entity in Japan, one of the requirements was that at least one director resided in the country. This residency requirement was abolished from 16 March 2015, for the most popular legal forms: K.K. (= Inc.) and GK (= LLC). The change is aimed at boosting foreign investment, making it easier for overseas companies to legally bind the subsidiary.

My Number

Japan has just introduced “My Number”, a resident record system similar to the social security number in the US; its main uses will be for social security, taxation and disaster response. Passed in 2013, the My Number law requires all companies in Japan collect and manage the numbers for their employees, both part-time and full-time. As My Number is classified as Sensitive Personal Information (SPI), companies are required to have the highest level of security for data and paper handling of the numbers. Those who leak the identity numbers/data will face criminal punishment and/or civil penalties.

2016 business opportunity

The Trans-Pacific Partnership (TPP) signed on 5 October 2015, is a new set of trade rules to build economic order and promote investment in the Asia-Pacific region. The TPP is expected to serve as a foundation for broader free trade in the region, and provide momentum to push forward other economic partnership negotiations that Japan is pursuing.

The Japanese Cabinet Secretariat estimates that the TTP would boost the country’s economy by 14 trillion yen (equivalent to 2.6% of its GDP in 2014) – a positive impact on both outbound and inbound businesses in Japan.

How we can help

TMF Group Japan can provide companies with local support for the registration process when appointing a representative director abroad, as well as a comprehensive solution for the My Number lifecycle management to help safeguard data. We also have offices in all the TPP countries – Japan, the United States, Australia, Peru, Malaysia, Vietnam, New Zealand, Chile, Singapore, Canada and Mexico (except Brunei), for clients operating in these jurisdictions.

Get in touch with our experts in Japan.


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