Provisional
Translation

Council for Promotion of Foreign Direct Investment in Japan
Working Group for Revising Regulations and Administrative Procedures
Immediate Report
December 22, 2016
I. History of discussion
Through the promotion of Abenomics, the government of Japan has proceeded with theestablishment of environments that facilitate conduct of business for not only Japanesecompanies but also foreign companies. The Council for Promotion of Foreign Direct
Investment in Japan especially made efforts to improve the business environment for foreigncompanies and the living environment for foreigners by determining the “Five Promises for
Attracting Foreign Businesses to Japan” (March 17, 2015) and the “Policy Package for
Promoting Foreign Direct Investment into Japan to Make Japan a Global Hub” (May 20, 2016)
to expand foreign investments. Partly because of the effects of these solutions, foreigncompanies’ evaluation of Japan as a target of their investments has improved, resulting in an
increase in direct investments in Japan.
On the other hand, foreign companies have continued to point out that the complexity of
regulations and administrative procedures is one of the main factors for hindering their conductof business in Japan. For this, in the “Policy Package for Promoting Foreign Direct Investment
into Japan to Make Japan a Global Hub”, “Basic Policy on Economic and Fiscal Management
and Reform 2016” (Cabinet decision on June 2, 2016), and the “Japan Revitalization Strategy
2016” (Cabinet decision on June 2, 2016), the government of Japan will draw conclusions
within a year concerning fundamentally simplification of regulations and administrative
procedures related to foreign companies’ investments in Japan (Matters on which conclusions
can be reached early on will be addressed ahead of others by deciding on concrete solutions by
the end of this year).
Responding to these policies, the Working Group for Revising Regulations and Administrative
Procedures under the Council for Promotion of Foreign Direct Investment in Japan held
discussions from this August concerning the issues about regulations and administrative
procedures pointed out by foreign companies and experts supporting them and about solutions
for reviewing the issues. Based on the discussion so far, the Working Group has compiled thefollowing immediate report to show the concrete solutions to be carried out by the related
government agencies. The solutions summarized in this immediate report shall be promptly
implemented.
We will continue to discuss and draw the conclusion around next spring.

II. Issues and solutions in each field
1. Incorporation and registration of companies(1) Payment certificate
Issue 1
When a foreign company incorporates a subsidiary stock company in Japan, the contribution
in money for the capital must be paid to the bank account (in Japan) of the incorporator or the
person appointed as representative director of the subsidiary. In addition, a document1

evidencing the completion of payment of the contribution (payment certificate) must be
attached at the time of the application for registration of incorporation. However, in reality,
incorporating foreign companies or the prospective representative directors living in a foreigncountry have difficulties in opening a bank account in Japan because they do not have addresses
in Japan. As a result, the payment of the contribution cannot be executed, and smooth
implementation of the procedure for corporate foundation is hindered.
(Solutions) In order to allow a third party’s bank account as the bank account for payment certificate, if
the incorporator have substantial custody of paid contribution at the time of the incorporation
as the asset of the subsidiary stock company, consider detailed requirements promptly andapply them by around the end of FY2016. [Ministry of Justice]Regarding the range of financial institutions to which contribution in money can be paid
under the Companies Act, the Director-General of the Civil Affairs Bureau of the Ministryof Justice issued a notification on December 20, 2016 to clarify and inform the parties
concerned that contribution can be paid to overseas branches of Japanese banks, in addition
to domestic branches of Japanese and foreign banks. Moreover, since October the Financial
Services Agency has requested the Japanese banks that have bases all over the world (the socalled three megabanks) to develop a framework, and each of them is planning to develop
such a framework promptly. [Ministry of Justice; Financial Services Agency](2) Signature certificate
Issue 2In the application for corporate registration by a foreigner who does not have a seal certificate,a signature certificate issued by the authorities of the home country may be needed as thesubstitute for a seal certificate. The applicant had to acquire a signature certificate in theforeigner’s home country or in Japan (the country’s consul in Japan 1). Because of this, if aforeigner lived in a third country, he or she needed to go to the home country or Japan to acquirea signature certificate, which was a great burden.
(Solutions) In order to reduce the inconvenience in the acquisition of a signature certificate, the DirectorGeneral of the Civil Affairs Bureau of the Ministry of Justice issued a notification on June
28, 2016. Concretely, regarding a foreigner’s signature certificate for corporate registration,
those issued by the home country’s authorities in a third country (such as the home country’s
consul in his/her country of residence) were permitted. In addition, the notification also
specified that, a signature certificate issued by a Japanese notary or the authorities in the
country of residence was permitted as a relief measure if a signature certificate could not be
acquired from the home country’s authorities due to inevitable reasons, such as legal reasonsin the home country. [Ministry of Justice]

To enable a foreigner who visits to Japan to acquire a signature certificate necessary forcorporate foundation, consider permitting signature certificate issued by a Japanese notaryin the case that the home country’s consul in Japan does not issue a signature certificate, even
if a signature certificate can be acquired in the home country or the country of residence. 2

1

Some countries’ consuls in Japan do not issue a signature certificate for corporate foundation.
Consider detailed procedures for replacing a seal certificate with a signature certificate prepared by a Japanese notary
and a report to the effect that the home country’s consul does not issue a signature certificate. And consider accepting
the report if it states that the applicant asked the embassy and received a response that they had not issued a signature
certificate.

22Make a conclusion within this fiscal year and carry out the measure. At the same time, specify
example cases where a signature certificate prepared by a Japanese notary or the authorities
in the country of residence is permitted. [Ministry of Justice](3) Provision of information on notifications concerning incorporation
Issue 3
Because notifications concerning incorporation, except for some simple descriptions, areunavailable on the website of the Ministry of Justice, foreign companies planning to foundsubsidiaries in Japan and their supporters cannot easily check the procedures related to theCompanies Act.
(Solution)
 On September 28, 2016, the Ministry of Justice created a web page showing “Main
Notifications related to Commercial and Corporate Registration” on its website 3 and began
to show the whole texts of related notifications issued after the Companies Act came into
force in 2006. [Ministry of Justice](4) Translation of application documents for registration
Issue 4
When a foreign company establishes a subsidiary or branch in Japan, the Legal Affairs Bureau
and the notary usually request the company to translate the application documents into Japanese.
In such cases, they sometimes request the company to translate portions not related to theapplication. 4 This is a burden to the company.
(Solution)
 By around the end of FY2016, based on the practice of corporate registration, specify andinform the cases where foreign companies can omit Japanese translation of the documents tobe submitted for the authorization of the articles of incorporation, the registration of adomestic stock company and the registration of a foreign company, etc. [Ministry of Justice](5) Tally signature procedure
Issue 5
When a company applies for the certification of articles of incorporation, etc., tally seals arenecessary for guaranteeing the genuineness of the preparation in practice. If the applicant is aforeign company, the representative of the company is required to affix tally signatures as analternative to tally seals. Because a tally signature is unfamiliar in foreign countries, it
practically takes a lot of time and effort to explain it to the representative and exchange
documents with a foreign country by mail.
(Solution)
 Consider taking a measure without using a tally signature for the procedure for certifying thearticles of incorporation, etc. when a foreign company or resident is the incorporator. Draw
a conclusion within FY2016. [Ministry of Justice]3

http://www.moj.go.jp/MINJI/minji06_00098.html
For example, when the foreign company applies for registration of a business office (branch) in Japan, the company
may have to translate portions not related to the information on the business office described in the minutes of therelated meeting of the board of directors.

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(6) Opening of a bank account after incorporation
Issue 6
Because it takes time to open a bank account for a Japanese company newly founded as aforeign company’s subsidiary or because the opening of such a bank account may be denied,foreign companies that wish to begin business in Japan in earnest often suffer time or economicloss.
(Solution) The Financial Services Agency requested the three megabanks to promptly develop aframework for smooth opening of bank accounts for domestic subsidiary companies orbranches of foreign companies, such as in the listing of bank branches where such procedures
will be handled smoothly, sharing of information, handling of appropriate clerical affairs, etc.
Responding to the request, the three megabanks are planning to develop such a framework
by around the end of this year. [Financial Services Agency]

2. Status of residence(1) Burden of carrying out procedures
Issue 1
It is burdensome to carry out the procedures for status of residence, including those to be carriedout at the Immigration Bureau. In addition, it takes time to carry them out because the
Immigration Bureau is congested.
(Solution)
 To start the on-line system for carrying out the procedure for status of residence in FY2018,
proceed with the preparations after considering the whole vision and details of the on-line
system, such as the range of target procedures, approximately within the first half of 2017.
[Ministry of Justice]
Issue 2
Although the standard period for handling the procedure for status of residence has been
publicly announced, it is difficult to estimate time necessary for the completion of theprocedures because it may take a certain period of time from application to authorization.
(Solution)
 Begin to publish data on the results of procedure periods in early FY2017 so that applicants
can refer to the data for estimating the time necessary for completing the procedure. In
addition, when considering establishing an online system for the procedure for status ofresidence, also consider introducing a system for online check of the status of progress foronline applications (application accepted, under examination, result notified, etc.). [Ministryof Justice](2) Highly skilled foreign professionals
Issue 3Highly - skilled foreign professionals should be invited further. It is difficult to invite highly–skilled foreign professionals to Japan because of severe requirements for status of residence
related to accompanying persons, such as restriction on spouse's employment and accepting
domestic workers.
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(Solution)
 Establish the world’s fastest system for obtaining “Japanese Green Card for Highly Skilled
Foreign Professionals” within FY2016 to shorten the residence period of five years necessary
for an application for permanent residence permission . [Ministry of Justice]Regarding highly skilled foreign professionals, spouses’ full-time employment and theacceptance of domestic workers are permitted. Revise points-based system for highly–skilled
foreign professionals in terms of requirements such as evaluation items within FY2016 to
facilitate the acceptance of highly skilled foreign professionals. [Ministry of Justice]To satisfy highly skilled foreign professionals’ need to live with domestic workers, who haveengaged in housework for the family members living in the country of origin, after coming
to Japan, consider revising the requirements for the acceptance of domestic workers
accompanying highly skilled foreign professionals and take necessary solutions. [Ministryof Justice]

3. One-stop administrative services (Tokyo One-Stop Business Establishment Center)
Issue 1In April 2015, the Tokyo One-Stop Business Establishment Center was founded in a national
strategic special zone. The Center has booths that integrate procedures related to corporate
foundation, such as notaries’ authorization of articles of incorporation, commercial registration,
tax affairs (national and metropolitan taxes), pension and social insurance, and issue ofcertificates for status of residence. However, because limitations are imposed on its services,such as not accepting applications related to national taxes and commercial registration, itsconvenience should be improved.
(Solution)
 As of December 22, 2016, the Tokyo One-Stop Business Establishment Center is able toaccept all eight types of applications, giving advice about the preparation of documents.
[Cabinet Office (Secretariat for Promotion of Regional Revitalization), etc.]In addition, establish an environment for personal computers and IC card reading and writing
devices so that electronic applications can be submitted in six fields, including commercial
registration, taxes, pensions, etc., and create a support system for electronic applications.
[Cabinet Office (Secretariat for Promotion of Regional Revitalization), etc.]

Issue 2
Because the Tokyo One-Stop Business Establishment Center limits the acceptance of
applications for status of residence to “business manager” and “intra-company transferee” andbecause applications have to be submitted within six months after corporate foundation, theconvenience of the application system should be improved.
(Solution)
 On December 22, 2016, “engineer, specialist in humanities, international services” wasadded to the types of status of residence for which the Tokyo One-Stop Business
Establishment Center can accept applications. In addition, the range of companies that can
submit applications to the Center will be expanded gradually from those within six months
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after the foundation to those within five years after the foundation by around April 2018.
[Cabinet Office (Secretariat for Promotion of Regional Revitalization), etc.]

4. Provision of information in foreign languages
Issue 1Government offices do not provide sufficient information in foreign languages. A lot of
information in foreign languages has not been provided or updated.
(Solution)
 Strengthen each government office’s provision of information in foreign languages
concerning highly necessary information about business activities and living.
<Examples of solutions> Prepare manuals on main operations of e-Tax, which are expected to be used by foreign
taxpayers and information for main tax return forms, main notifications, and otherdocuments in English, and show them on the website. [National Tax Agency] Prepare guides to social insurance, etc., in English and show them on the website.
[Ministry of Health, Labour and Welfare]
Issue 2
Even if each government office provides information in foreign languages, it is difficult to finddue to poor listing.
(Solution)
 Use the website of JETRO as the portal site for each government office’s information inforeign languages. Establish a system for smoothly expanding and updating information.

65. Import into Japan(1) Statistical codes of commodities (such as HS codes 5)
Issue 1
It sometimes takes a lot of time to classify and check the statistical codes of commodities used
for customs clearance, and the procedure has become a burden to companies. In addition,although the Japan Customs provide information on statistical codes, commodity names, otherlaws and regulations, 6 tariff rates, etc. on its website, information on the procedures necessary
under other laws and regulations is insufficient.
(Solution)
 Regarding the statistical codes of commodities related to apparel and clothing, streamline
national subdivisions that are unnecessary in light of tariff rate and are not much required forcollecting trade statistics, starting with T-shirts in the next fiscal year and considering
reviewing for other items in the fiscal year after next. Regarding the national subdivisions of
the commodities other than apparel and clothing, the related ministries shall proceed withmeasures for reduction. The national subdivisions of toys are planned to be merged in theamendment of Customs Tariff Law in FY2017. [Ministry of Finance, etc.]When holding consultation about the classification of commodities, ensure not to impose an
excessive burden on the business operators by requesting the provision of more thannecessary Japanese information on English materials or by asking unnecessary questions. 7[Ministry of Finance]To aim for making improvements within FY2016 so that the legal procedures of other laws
and regulations and the competent government offices can be confirmed by each concerningcommodity in the customs tariff schedules (in Japanese and English) on the website of Japan
Customs. Moreover, to improve the convenience by linking to the competent government
offices’ web pages that show concrete procedures under other laws and regulations or others.
[Ministry of Finance]To improve users’ convenience when referring to a database of answering advance rulings
for the classification of commodities, consider adding photos of the goods at issue on thewebsite, if consent is gained from business operators. [Ministry of Finance]

5

The purpose of the HS codes is to classify imported commodities. Each code consisting of the six digits identified
internationally by WCO (World Customs Organization) is referred to commonly as the HS code. Each country can add
and code at a level beyond that of the HS. Japan has added three digits after the six digits (national subdivisions) forthe purpose of setting the tariff rates and collecting trade statistics, resulting in nine digits in total (statistical codes ofcommodities). As of December 2016, the members of the HS (Harmonized System) Convention are 153 countries,
including Japan, and the EU. The HS codes are used by more than 200 countries and regions, including countries thathave not acceded to the Convention. Over 98% of the merchandise in international trade is classified in terms of the
HS. The classification of goods in the HS Nomenclature is governed by the “General Rules for the interpretation of theHarmonized System” to achieve uniform classification. If a foreign country has a different view on the classificationof the commodity, Japanese government endeavors to secure uniform interpretation and application in cooperation withother member countries through WCO’s HS Committee and other occasions.
6 When some types of commodities are imported, as a precondition for the permission of the import it is necessary toprove to the customs house the completion of the procedures specified in any law or regulation other than those related
to tariff (such as the Food Sanitation Act and the Act on Domestic Animal Infectious Diseases Control).
7 Even before obtaining the customs house’s permission of import, if it takes a lot of time to classify a new type ofcommodity, the importer can exceptionally receive the commodity by carrying out the required procedures.

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(2) Japanese Industrial Standards (JIS)
Issue 2
Because it takes a few years between the agreement of international standards for a product andthe reflection of the standards in JIS, even if a foreign company has completed inspection
according to the new international standards, the company sometimes has to inspect the productagain according to the old standards only to export it to Japan. In addition, Japan’s standards
for the indication of goods are not very consistent globally.
(Solution)
 Promote measures to revise JIS quickly after the enforcement of international standards, suchas beginning the revision of JIS (the preparation of a draft) at the stage of preparing theinternational standards. If Japanese standards are highly likely to be referred to under theElectrical Appliances and Materials Safety Act, make them well-known among industrial
associations at the beginning of discussions at an international conference about the revisionof the standards, in order to encourage them to participate in the conference and, if necessary,facilitate the start of examination about JIS at an early stage. [Ministry of Economy, Tradeand Industry]

Make the processes for examination of JIS by the Ministry of Economy, Trade and Industry’s
Japanese Industrial Standards Committee more prompt by increasing the frequency of
examination meetings. [Ministry of Economy, Trade and Industry]

After global integration of JIS concerning the labeling of washing, the Textile Goods Quality
Labeling Regulations was revised to specify the duty to use marks according to the integrated
part of JIS and came into force on December 1, 2016. [Ministry of Economy, Trade andIndustry; Consumers Affairs Agency](3) Regulations and procedures under the Food Sanitation Act
Issue 3
Whereas the negative list system 8 is used for the standards for utensil, containers andpackaging (such as tableware) under the Food Sanitation Act in Japan, the positive list system9
is used in the countries such as EU and U.S.A., lacking the international consistency.
(Solution)
 Proceed with measures to introduce the positive list system for the standards for tableware,such as considering a concrete system for improving the safety of tableware at the Study
Panel on Regulations for Utensil, Containers and Packaging and compiling the results within
this fiscal year. [Ministry of Health, Labour and Welfare]
Issue 4
When tableware is imported, it is sometimes difficult to know whether the tableware should be
inspected under the Food Sanitation Act and how many samples are needed for the inspection
unless the importer asks the quarantine station. In addition, even if the importer submits thetesting results report, issued by the Foreign Official Laboratories listed by the Ministry of
Health, Labour and Welfare, to the quarantine station, the importer may be required to makean additional confirmation or a correction peculiar to Japan. Moreover, these matters may besometimes handled differently among quarantine stations and impose a burden on companies.
89System for listing the substances which are allowed to be used in principle, but are limited in usage
System for listing the substances which are prohibited to be used in principle, but are allowed to be used8

(Solution)
 Arrange necessary information for inspection of tableware under the Food Sanitation Act,
such as an estimated number of required samples, the items to be included in the testing
results report and other notices, and provide the information through the website of the
Ministry of Health, Labour and Welfare within this fiscal year.10 [Ministry of Health, Labourand Welfare]

6. Others(1) Requirement for construction business license
Issue 1
To obtain construction business license, it is necessary to appoint a person with a certain amountof experience of being responsible for managing construction business (officer or equivalent
person) as full-time officer. However, it is difficult for foreign companies in their personnel
affaires to hire such a person and place the person in its affiliated company in Japan, whichmakes it more difficult to obtain license for construction business.
(Solution)
 According to the Regulatory Reform Implementation Plan established by the Cabinet in June
2015, the following solutions should be carried out to review the standards for construction
business license: Regarding five years’ experience and the number of years of experience as a requirement
for persons of equivalent capacity, examine the possibility of reducing the number ofyears of experience to some extent, for example, by creating a training system as a
substitute for experience. [The examination began in FY2015; the conclusion is madeand the solutions are taken in FY2016.]
 Examine what the standards for construction business license should be to guarantee
appropriate management of construction business, including a review for making therequirements more appropriate and rational so as to fulfill the purpose of the regulation.
[The examination began in FY2015.]
The Construction Industry Policy Conference considers carrying out the above solutions (thefirst meeting held on October 11, 2016), based on the interim report by the Central Council
on Construction Contracting Business’s Basic Problem Subcommittee (discussions began on
January 27, 2016). [Ministry of Land, Infrastructure, Transport and Tourism](2) Translation of application documents concerning employment placement business between
Japan and a foreign country
Issue 2
To conduct employment placement business between Japan and a foreign country, it isnecessary to submit an application or a report to Prefectural Labour Bureau. In this case, theLabour Bureau demands the submission of an entire translation of the related labor laws andregulations in the foreign country, thereby imposing a heavy burden on companies.
(Solution)
 To reduce companies’ burden as much as possible, by the end of January 2017, specify the10Some toys are subjected to the Food Sanitation Act. Although the Ministry of Health, Labour and Welfare has
published “Toys Q&A” on its website, because there are various types of toys, the quarantine stations sometimes makeindividual and concrete judgments.

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range of information necessary for the Labour Bureaus to properly carry out the proceduresfor permission and others, and instruct the Bureaus not to demand the submission of any
original or translated texts of labor laws or regulations in other countries beyond the specified
range. [Ministry of Health, Labour and Welfare](3) Display of unapproved medical equipment
Issue 3
Regarding the display of unapproved medical equipment, it is difficult to understand in whichcases such equipment can be displayed without conflicting with the Pharmaceuticals andMedical Devices Act and in which cases the display is not approved.
(Solution)
 After checking what points are unfamiliar to medical equipment organizations concerning
the enforcement of the regulation consider how to clarify and disseminate rules about
whether to display unapproved medical equipment at exhibitions. [Ministry of Health,Labour and Welfare]10