This article summarizes the 2026 amendments to the Foreign Exchange and Foreign Trade Act, which strengthen the screening of inward direct investment, focusing on the purpose of the amendments, the implementation schedule, practical considerations, and the establishment of Japan’s CFIUS.
This feature explains the amendments to the Foreign Exchange and Foreign Trade Act concerning inward direct investment and other matters, along with their practical implications. The background to the amendments includes the aim of balancing the promotion of investment with economic security, as well as a review of the scope of prior notification, the codification of risk-mitigation measures, the introduction of regulations on indirect acquisitions, the expansion of deemed provisions, measures applicable to non-designated industries, and the establishment of Japan’s CFIUS and introduction of a new system.
As for the implementation schedule, the amended Act was promulgated on 5 June 2026, with some provisions taking effect on the same day and the remaining provisions scheduled to take effect within one year of promulgation. Specific proposals for cabinet and ministerial orders and other regulations will be published and considered in due course, and the public comment process is also expected to continue. In addition, the establishment of Japan’s CFIUS and the introduction of a new system targeted for fiscal 2028 are planned.
In practical terms, the introduction of regulations on indirect acquisitions will require an understanding not only of direct ownership but also of group structures, including parent companies. The review period and required information for risk-mitigation measures will also be expanded, which is expected to affect notification and review schedules. The scope of the deemed provisions, under which residents are included in the calculation of foreign investors, is also expected to be expanded for high-risk investors. The establishment of orders for measures and other actions against investments in non-designated industries is likewise under consideration.
These amendments are expected to have a significant impact on collaboration and equity investments involving foreign and Japanese companies, with the review criteria and scope of application for individual cases expected to be specified in cabinet orders and other regulations. The planned introduction of a new system for online submission of various information is also intended to strengthen post-investment monitoring and improve operational efficiency.