As of December 21, 2017

Q&A on Amendment of the Basic Rules for Duties of
Gaikokuho-jimu-bengoshi and the Basic Rules Concerning Foreign
Special Members

Q1. I hear that the Basic Rules for Duties of Gaikokuho-jimu-bengoshi and the
Basic Rules Concerning Foreign Special Members have been amended. Pleaseprovide me with an outline of the amendment.
A. Article 11-2 has been newly added to the Basic Rules for Duties of
Gaikokuho-jimu-bengoshi. Where equity interests or voting rights of a foreignbusiness entity which has the purpose of providing legal services (hereinafter,“Foreign Entity”) are granted to non-lawyers (a person who is not an attorney atlaw or a foreign lawyer (the same shall apply hereinafter)) who are not engaged
in the business of the Foreign Entity, a Gaikokuho-jimu-bengoshi isunconditionally prohibited from belonging to the said Foreign Entity. Where
equity interests or voting rights of the Foreign Entity are granted to non-lawyers
who are engaged

in the business of the said Foreign Entity, aGaikokuho-jimu-bengoshi is prohibited from belonging to the said Foreign Entity
if the said Foreign Entity does not meet either or both of the following two
requirements: (1) the existence of the Foreign Entity is permitted under the laws
and regulations of the jurisdiction where the said Foreign Entity is located; and(2) equity interests or voting rights of non-lawyers are constrained to less than
50% or otherwise control by attorneys at law or foreign lawyers is structurally
and effectively secured. Further, a general provision stating that a
Gaikokuho-jimu-bengoshi is prohibited from belonging to the Foreign Entity if
involvement of non-lawyers in the said Foreign Entity is deemed to have the riskof impairing the independence of the duties of Gaikokuho-jimu-bengoshi, wasalso added to the said Article. In connection with this amendment, if a
1

As of December 21, 2017

Gaikokuho-jimu-bengoshi belongs to a Foreign Entity which has the purpose ofproviding legal services, its name, the name of the country where it is locatedand the address where it is located are now required as matters to be registeredin the Roll of Gaikokuho-jimu-bengoshi under the Basic Rules Concerning
Foreign Special Members. Under the amendment, when requests forregistration of Gaikokuho-jimu-bengoshi, requests for transfer of registration toa different bar association and reports of changes in registered matters are
made, a letter pledging that the Foreign Entity does not fall under a Foreign
Entity which a Gaikokuho-jimu-bengoshi is prohibited from belonging to under
Article 11-2 of the Basic Rules for Duties of Gaikokuho-jimu-bengoshi anddocuments certifying the pledged matters must be submitted together with otherrequired documents. Further, it is provided that, if the Foreign Entity comes tofall under any of the types of Foreign Entity which a Gaikokuho-jimu-bengoshi isprohibited from belonging to under Article 11-2 of the Basic Rules for Duties of
Gaikokuho-jimu-bengoshi after submission of the said letter and documents, theGaikokuho-jimu-bengoshi must immediately report such change to the JFBA via
the bar association to which he/she belongs and withdraw or resign from thesaid Foreign Entity or take any other appropriate measures.

Q2. When will the amended provisions come into force?
A. The amended provisions will come into force as of April 1, 2018.

Q3. Who will be affected by the amendment?
A. Both foreign lawyers

who plan to register with the JFBA and

Gaikokuho-jimu-bengoshi already registered will be affected by the amended
provisions.

2As of December 21, 2017

Q4. Are any transitional measures provided?
A.

A Gaikokuho-jimu-bengoshi who actually belongs to a Foreign Entity which

has the purpose of providing legal services at the time of enforcement of theamended provisions must file, with the JFBA, its name, the name of the country
where it is located and the address where it is located within two (2) weeks fromthe date of enforcement pursuant to the provisions regulating the changes in theregistered matters.

When reporting, a letter pledging that the said Foreign

Entity does not fall under any of the types of Foreign Entity which a
Gaikokuho-jimu-bengoshi is prohibited from belonging to under Article 11-2 ofthe Basic Rules for Duties of Gaikokuho-jimu-bengoshi and documents
certifying the pledged matters must be submitted as attached documents to the
JFBA

via

the

bar

association

to

which

he/shebelongs.

A

Gaikokuho-jimu-bengoshi, who actually belongs to a Foreign Entity which
he/she is prohibited from belonging to under Article 11-2 of the Basic Rules for
Duties of Gaikokuho-jimu-bengoshi at the time of enforcement of the amended
provisions, will be given a grace period of up to one (1) year from the date on
which the new rules come into effect regarding said Article unless the
Gaikokuho-jimu-bengoshi changes the Foreign Entity to which he/she belongs.
In such case, the Gaikokuho-jimu-bengoshi will not be required to submit aletter stating that the said Foreign Entity does not fall under any of the types ofForeign Entity which a Gaikokuho-jimu-bengoshi is prohibited from belonging tounder Article 11-2 of the Basic Rules for Duties of Gaikokuho-jimu-bengoshi
and documents certifying the pledged matters during such grace period. The
Gaikokuho-jimu-bengoshi is expected to take measures such as withdrawing
from the said Foreign Entity within the grace period.

3

As of December 21, 2017

[Procedures (for persons qualified to become a foreign lawyer)]Q5. I will register as a Gaikokuho-jimu-bengoshi in Japan. Is it possible to havethe documents checked in advance as to whether the Foreign Entity to which I
belong is permitted?
A.

If you submit the JFBA a draft letter pledging that the Foreign Entity towhich you belong does not fall under any of the types of Foreign Entity which a
Gaikokuho-jimu-bengoshi is prohibited from belonging to under Article 11-2 ofthe Basic Rules for Duties of Gaikokuho-jimu-bengoshi and documents
certifying the pledged matters, JFBA will review them in advance and notify theapplicant for registration of the results of such review. In the case of an office ofa Gaikokuho-jimu-bengoshi or a Gaikokuho-jimu-bengoshi corporation fromwhich more than one Gaikokuho-jimu-bengoshi are expected to apply forregistration in the future, if the office submits draft documents certifying thepledged matters which will be attached to the pledge letter of each applicant forregistration, the JFBA will review them in advance and notify the office of theresults.

Q6. When should I submit the documents to the JFBA?
A.

It is common practice to apply to the Ministry of Justice for preliminary

examination of qualification approval if a person intends to become a
Gaikokuho-jimu-bengoshi. We recommend that you receive advance review
by submitting the JFBA a draft letter pledging that the Foreign Entity to which
you belong does not fall under any of the types of Foreign Entity which a
Gaikokuho-jimu-bengoshi is prohibited from belonging to under Article 11-2 ofthe Basic Rules for Duties of Gaikokuho-jimu-bengoshi and documents
certifying the pledged matters, simultaneously with the application to the
Ministry of Justice for preliminary examination or prior thereto.
4

As of December 21, 2017

Q7. What advantage will I have for the subsequent registration if I have my
documents checked in advance?
A.

As the results of the advance review conducted by the JFBA will be shared

as reference materials with the bar association to which you intend to join
thereafter, the opinions of the JFBA will also be respected when such bar
association expresses its opinions to the JFBA when the actual application forregistration is made.

[Procedures (Gaikokuho-jimu-bengoshi)]Q8. I am currently a Gaikokuho-jimu-bengoshi. What procedures will be
required in connection with this amendment?
A.

If a Gaikokuho-jimu-bengoshi does not belong to a Foreign Entity which

has the purpose of providing legal services, you are not required to take any
specific procedures. If a Gaikokuho-jimu-bengoshi belongs to a Foreign Entity
which has the purpose of providing legal services, it is necessary to file, with the
JFBA, its name, the name of the country where it is located and the address
where it is located, pursuant to the provisions governing the changes inregistered matters and when filing, a letter pledging that the Foreign Entity does
not

fall

under

any

of

the

types

of

Foreign

EntitywhichaGaikokuho-jimu-bengoshi is prohibited from belonging to under Article 11-2 ofthe Basic Rules for Duties of Gaikokuho-jimu-bengoshi and documents
certifying the pledged matters must be submitted as attached documents to the
JFBA

via

the

bar

association

to

which

he/shebelongs.

Ifa

Gaikokuho-jimu-bengoshi requests transfer of his/her registration to a different
bar association, it is necessary to submit, to the JFBA via the bar association towhich the Gaikokuho-jimu-bengoshi intends to join, a letter pledging that theForeign Entity to which he/she belongs does not fall under any of the types of5As of December 21, 2017

Foreign Entity which a Gaikokuho-jimu-bengoshi is prohibited from belonging tounder Article 11-2 of the Basic Rules for Duties of Gaikokuho-jimu-bengoshi
and documents certifying the pledged matters.

Q９. Is there a due date for the procedures?
A.

The procedures must be performed within two (2) weeks from theenforcement date.

Q10. Can I, as a Gaikokuho-jimu-bengoshi, have the documents checked inadvance as to whether the Foreign Entity to which I belong is permitted?
A.

If you submit the JFBA a draft letter pledging that the Foreign Entity towhich you belong does not fall under any of the types of Foreign Entity which a
Gaikokuho-jimu-bengoshi is prohibited from belonging to under Article 11-2 ofthe Basic Rules for Duties of Gaikokuho-jimu-bengoshi and documents
certifying the pledged matters, the JFBA will review them in advance and notify
the Gaikokuho-jimu-bengoshi of the results of the review. In the case of an
office of a Gaikokuho-jimu-bengoshi or Gaikokuho-jimu-bengoshi Corporation towhich many Gaikokuho-jimu-bengoshi belong, if the office submits draft
documents certifying the pledged matters which will be attached to the pledge
letter of each Gaikokuho-jimu-bengoshi, the JFBA will review them in advanceand notify the office of the results of the review.

Q11. If a Gaikokuho-jimu-bengoshi has failed to submit the documents to besubmitted under this amendment by the due date, what will happen?
A.

The Gaikokuho-jimu-bengoshi may be subject to disciplinary actions due tohaving violated the provisions concerning Gaikokuho-jimu-bengoshi in the JFBA
Rules.
6

As of December 21, 2017

Q12. What procedures will be required if I transfer to a different Foreign Entity?
A.

In such case, the Gaikokuho-jimu-bengoshi is required to immediately

submit a report of change in registered matters to the JFBA. When reporting, itis necessary to submit to the JFBA, via the bar association to which he/shebelongs, a letter pledging that the Foreign Entity to which he/she belongs does
not

fall

under

any

of

the

types

of

Foreign

EntitywhichaGaikokuho-jimu-bengoshi is prohibited from belonging to under Article 11-2 ofthe Basic Rules for Duties of Gaikokuho-jimu-bengoshi and documents
certifying the pledged matters.

[Procedures (When a person who is qualified to become a foreign lawyer
requests registration with the JFBA and a Gaikokuho-jimu-bengoshi requests
transfer to another bar association or submits changes in the registeredmatters)]

Q13. The amended provision lists a “pledge letter” and “certifying documents.”
What should I write in these documents?
A.

The JFBA will publish a form of the pledge letter and certifying documents

in Japanese and English. As for the certifying documents, you may submit laws
and regulations, the rules of the foreign bar association to which you belong,
and/or the articles of incorporation, partnership agreement, etc. of the Foreign
Entity to which you belong, as the basis of your pledge, in lieu of the above
form.
＊Please make sure that you attach Japanese translations to any foreign
language documents.

7

As of December 21, 2017

Q14. The Foreign Entity to which I belong is a business entity of a jurisdiction
where Foreign Entities falling under the amendment are prohibited. Even so, do
I have to submit the pledge letter and certifying documents in a similar manneras the other foreign lawyers, etc.?
A. Yes, you still need to submit the letter and documents in such case.

Q15. Who should prepare the certifying documents?
A. The certifying document form prepared by the JFBA should be executed by
the person who has the authority to certify the matters that require certificationof the Foreign Entity to which you belong.

Q16. Is it also necessary to submit the pledge letter and certifying documents
when a Gaikokuho-jimu-bengoshi or a Gaikokuho-jimu-bengoshi corporation
does not use the name of the entity to which he/she belongs (as defined in
Article 45, Paragraph 2 of the Act on Special Measures concerning the Handlingof Legal Services by Foreign Lawyers and Article 50-10, Paragraph 2 of thesaid Act) in the name of its office or does not append such name to the name of
the Gaikokuho-jimu-bengoshi or the name of the office?
A.

As long as the Gaikokuho-jimu-bengoshi belongs to a Foreign Entity,

he/she is required to submit the letter and the certifying documents even if thename of the Foreign Entity to which he/she belongs is not used in the name ofthe office or not appended to his/her name or the name of the office in Japan.
In this regard, “business entity to which he/she belongs” is defined in Article 45,
Paragraph 2, of the Act on Special Measures concerning the Handling of Legal
Services by Foreign Lawyers as a corporation, partnership or other business
entity of his/her jurisdiction of primary qualification which has, as its objective,
the provision of legal services and to which he/she belongs. Under Article 50-10,
8As of December 21, 2017

Paragraph 2 of the said Act, applying mutatis mutandis, the above provision,“business entity to which he/she belongs” is defined as a juridical person,
partnership or other business entity of member’s jurisdiction of primary
qualification which has, as its objective, the provision of legal services and towhich the said member belongs. We assume that in most cases, the Foreign
Entity to which the Gaikokuho-jimu-bengoshi belongs is an entity of thejurisdiction of such Gaikokuho-jimu-bengoshi’s primary qualification; however,please note that even if a Gaikokuho-jimu-bengoshi belongs to a Foreign Entityof a jurisdiction which is not his/her jurisdiction of primary qualification, he/she isalso required to submit the letter of pledge and the documents certifying theletter of pledge regarding such Foreign Entity.

[Contents]
Q17. What does “engaging in the business” mean?
A. Article 11-2, Item 2 of the Basic Rules for Duties of Gaikokuho-jimu-bengoshi
considers LDP (Legal Disciplinary Practice) and MDP (Multidisciplinary
Practice) to be applicable Foreign Entities, which means that a non-lawyer
engaging in professional services that support the legal services provided by
the Foreign Entity or adjacent professionals engaging in non-legal professional
services that relate to the legal services in the Foreign Entity are considered tobe “engaging in the business” of the Foreign Entity.

Q18. Is “Foreign Entity to which he/she belongs” limited to the one to which a
Gaikokuho-jimu-bengoshi belongs or does it include a business entity which
directlyorindirectly

controls

theForeign

Entity

to

which

a

Gaikokuho-jimu-bengoshi belongs or a business entity under common control
with the Foreign Entity to which a Gaikokuho-jimu-bengoshi belongs?
9

As of December 21, 2017

A.

If the Foreign entity to which a Gaikokuho-jimu-bengoshi belongs does not

fall under any of the types of Foreign Entity which a Gaikokuho-jimu-bengoshi isprohibited from belonging to under Article 11-2 of the Basic Rules for Duties of
Gaikokuho-jimu-bengoshi, the issue of whether or not a business entity directly
or indirectly controlling the said Foreign Entity or a business entity undercommon control with the said Foreign Entity falls under a prohibited business
entity will not be questioned.

Q19. Is “grants equity interests or voting rights” limited to cases where suchrights are “actually granted” or does it include cases where they “may be
granted?”A.

In either Item 1 or 2 of Article 11-2 of the Basic Rules for Duties of

Gaikokuho-jimu-bengoshi, as long as the Foreign Entity to which a
Gaikokuho-jimu-bengoshi belongs does not actually grant equity interest or
voting rights to non-lawyers, the issue of whether the said Foreign Entity ispermitted to grant equity interest or voting rights to non-lawyers under theapplicable laws and regulations, etc. under their home jurisdiction will not be
relevant; provided, however, that, if and when the said Foreign Entity later
actually grants equity interests or voting rights to non-lawyers, and if it falls
under Item 1 or 2, the Gaikokuho-jimu-bengoshi must immediately report suchfact to the JFBA via the bar association to which he/she belongs and the
Gaikokuho-jimu-bengoshi must withdraw or resign from the said Foreign Entity
or take other appropriate measures.

Q20. Under what circumstances can it be deemed that “control by attorneys at
law or foreign lawyers is structurally and effectively secured” other than in thecase where equity interests or voting rights of non-lawyers who are engaged in
10As of December 21, 2017

the services are constrained to less than 50%?
A.

Circumstances such as the ratio of attorneys at law or foreign lawyers to

the total number of members of the management committee, board of directors
or any other similar decision-making body making business decisions of theForeign Entity exceeding 50% is one example. Even in such case, however, it isnecessary to comprehensively determine factors such as the ratio of equity
interests or voting rights of non-lawyers who are engaged in the business andthe conditions of involvement of non-lawyers in the decision-making on thefinancial and business policies in conjunction with individual specific cases.

Q21. What are the circumstances where “it is deemed that there is a risk of
impairing the independence of the duties of Gaikokuho-jimu-bengoshi by the
involvement of non-lawyers”?
A. Article 11-2, Item 3 of the Basic Rules for Duties of Gaikokuho-jimu-bengoshi
is a catch-all provision covering the scope not covered by Items 1 and 2 of thesaid Article. Such provision will be applied when there are circumstances where
the independence of the duties of Gaikokuho-jimu-bengoshi may be impaired
because non-lawyers substantially control the management even though Items
1 and 2 of the said Article do not apply to the situation. It is advisable to consult
with the JFBA in advance if the Foreign Entity may fall under the above
situation.

Q22. Are there jurisdictions where the types of Foreign Entity which a
Gaikokuho-jimu-bengoshi is prohibited from belonging to under Article 11-2 ofthe Basic Rules for Duties of Gaikokuho-jimu-bengoshi are not permitted at allby the laws and regulations, etc.?
A. In the following jurisdictions, it has been confirmed that MDPs are permitted,
11

As of December 21, 2017

but the types of Foreign Entity which a Gaikokuho-jimu-bengoshi is prohibitedfrom belonging to under Article 11-2 of the Basic Rules for Duties of
Gaikokuho-jimu-bengoshi are not permitted under the laws and regulations, etc.
of such jurisdictions: British Columbia and Ontario - Canada, France, Germany,
The Netherlands, and Switzerland.
In the following jurisdictions, it has been confirmed that LDPs are permitted, but
the types of Foreign Entity which a Gaikokuho-jimu-bengoshi is prohibited frombelonging to under Article 11-2 ofthe Basic Rules for Duties of

Gaikokuho-jimu-bengoshi are not permitted under the laws and regulations, etc.
of such jurisdictions: Washington state, U.S.A.
With respect to the following jurisdictions, it has been confirmed that a Foreign
Entity which a Gaikokuho-jimu-bengoshi is prohibited from belonging to under
Article 11-2 of the Basic Rules for Duties of Gaikokuho-jimu-bengoshi is not
permitted under the laws and regulations, etc. of such jurisdictions: All states of
the U.S.A. other than the District of Columbia and Washington, Brazil, China(excluding state-owned law firms), Hong Kong, South Korea, Saudi Arabia andTaiwan.
All of the foregoing is the result of examination as of November 2017 of eachjurisdiction as to which the Minister of Justice has approved as having "aqualification to become foreign lawyer” which is necessary to become a
Gaikokuho-jimu-bengoshi.

12