EU-Japan Economic Partnership Agreement
The EU and Japan's Economic Partnership Agreement entered into force on 1 February 2019. EU firms already export over €58bn in goods and €28bn in services to Japan every year. The EU-Japan Economic Partnership Agreement reduces trade barriers that European firms face when exporting to Japan and helps them to better compete in this market.
The agreement at a glance
The EU-Japan Economic Partnership agreement entered into force on 1 February 2019.
What are the benefits for your business?
The trade agreement with Japan
- removes tariffs and other trade barriers and makes it easier for companies on both sides to import and export
- ensures the openness of services markets, in particular financial services, telecommunications and transport
- guarantees non-discriminatory treatment of EU businesses operating in the public procurement markets
- improves the protection of intellectual property rights in Japan as well as the protection of high-quality European agricultural products, so-called geographical indications (GIs)
- saves companies of both sides substantial amounts of money and time when trading goods on the bilaterally
- provides for enhanced support of smaller firms which are disproportionately affected by trade barriers
Japan is already the EU's fourth biggest market for agricultural exports. Market access will be improved for many European products, notably
Tariffs
The agreement removes the vast majority of duties paid by European and Japanese companies.
On entry into force, the agreement eliminated 99% of EU tariff lines and 97% of Japan’s tariff lines. On not yet eliminated tariffs, tariff rate quotas or tariff reductions were agreed.
To check the tariffs for your product, you must know the product code, which is based on Harmonised System (HS) HS2017 code, for both European and Japanese codes.
You can find your product code using My Trade Assistant
The agreement opens the Japanese market to EU agricultural exports, for example
- duties on many cheeses such as Gouda and Cheddar will be eliminated over time
- a duty-free quota is established for fresh cheeses (such as Mozzarella and Feta)
- tariffs on wine exports disappeared upon entry into force
- on beef, EU exporters will benefit from a reduced tariff
- on pork only low duties remain for fresh meat exports to Japan and the agreement fully eliminated duties on processed meat.
Tariff dismantling schedules
Tariffs for a vast majority of products are either immediately eliminated upon entry into force of the agreement or gradually following a tariff dismantling schedule.
The starting point of elimination or reduction of custom duties is a “base rate” and reductions occur on this base rate. By means of the customs tariff code of the product you will be able to find the reduction that applies to the base rate of your product.
- general notes to help you read the tariff dismantling schedules of both the EU and Japan
Importing from Japan
- the tariff dismantling schedule of the EU
- notes for the schedule of the EU
Exporting to Japan
- the tariff dismantling schedule of Japan
- notes for the schedule of Japan - this contains in particular the description of the 25 tariff rate quotas conceded by Japan to the EU on agricultural and processed agricultural products
Tariff rate quotas (TRQs)
TRQs are also applicable on certain products. These are specific volumes of goods, which will be entitled to preferential tariff treatment in a given timeframe
- there are twenty-five Japanese agri-food products with tariff rate quotas
- tariff rate quotas of Japan
- The Japanese Ministry of Agriculture, Forestry, and Fisheries (MAFF) provides information on the TRQ application and allocation, for each tariff line, such as sugar, wheat products, dairy products, and other foods (including confectionaries and certain chocolates) under the EU-Japan EPA (Japanese).
For dairy products, the allocation of TRQs and collection of levies are done by the Agriculture & Livestock Industries Cooperation (ALIC).
Importation of designated dairy products (e.g., butter and whey) within the tariff quota are subject to a state trading system.
Information sheets by the EU-Japan Centre for Industrial Cooperation (EU Business in Japan)
- EU-Japan EPA Factsheet—Dairy Products (English)
- Dairy in Japan—An Analysis of the Current Market and its Opportunities for European SMEs (2018, English)
- EU-Japan EPA Factsheet—Processed Agricultural Products (PAPs) (2019, English)
Some marine products are subject to import quotas and the importers are obliged to apply.
More information on the application and allocation of TRQ in Japan.
Japanese Law Translation Database System provided by Ministry of Justice, Japan.
Safeguard measures
The EU-Japan trade agreement also provides for bilateral safeguard measures. The aim of a “safeguard” action (i.e. restrict imports of a product temporarily) is to protect a specific domestic industry from an increase in imports of any product which is causing, or threatening to cause, serious injury to the industry. In this agreement, agricultural safeguard measures are used to protect specific products from such surges in imports.
The EU products subject to these measures are
- beef and pork (including processed pork)
- whey protein concentrate (WPC), whey powder
- fresh oranges
- racehorses
Additional information on safeguard measures concerning race horses
My Trade Assistant provides you with detailed information about the tariffs, the measures applicable to your product and market, and displays the tariff dismantling schedules for the relevant tariff lines.
Rules of origin
In order to qualify for preferential treatment, your product will need to satisfy the rules of origin under the agreement. Please check the interactive “Rules of Origin Self Assessment tool (ROSA)” in My Trade Assistant to assess whether your product fulfils the rules of origin and find out how to prepare the correct documents.
General information about the rules of origin and the origin procedures can be found in this section.
Origin is the 'economic nationality' of traded goods. If you are new to the topic, you can find an introduction to the main concepts in the goods section.
Rules of origin
Where can I find the rules of origin?
The rules of origin are set out in Chapter 3 on rules of origin of the EU-Japan Economic Partnership Agreement (OJ L330, 27.12.2018, p. 21).
Does my product originate in the EU or Japan?
For your product to qualify for the lower or zero preferential tariff under the EU-Japan Economic Partnership Agreement, it must originate in the EU or Japan.
A product 'originates' in the EU or in Japan, if it is
- wholly obtained in the EU or Japan, or
- produced exclusively from materials originating in the EU or Japan, or
- produced in the EU or Japan using non-originating materials in compliance with the product specific rules set out in ANNEX 3-B "Product specific rules of origin"
See also ANNEX 3-A "Introductory notes to product specific rules of origin". Furthermore, Appendix 3-B-1 "Provisions related to certain vehicles and parts of vehicles" provides for alternative product specific rules for certain vehicles and vehicles' parts.
The product also needs to fulfil all other applicable requirements specified in the Chapter (for example insufficient working or processing, the non-alteration rule). There are also some additional flexibilities to help you comply with product specific rules (for example tolerance or cumulation).
Examples of the main types of product specific rules in EU trade agreements
- the value-added rule – the value of all of the non-originating materials in a product cannot exceed a certain percentage of its ex-works price
- the change of tariff classification – the production process results in a change of tariff classification between the non-originating materials and the final product – for example production of paper (Harmonized System Chapter 48) from non-originating pulp (Harmonized System Chapter 47)
- specific operations – a specific production process is required, for example spinning of fibres into yarn – such rules are mostly used in the textiles clothing and chemical sectors
Tips to help you comply with the product specific rules
The agreement provides additional flexibility to help you comply with the product specific rules such as tolerance or cumulation.
Tolerance
- the tolerance rule allows the producer to use non-originating materials that are normally prohibited by the product specific rule as long as their value does not represent more than 10% of the ex-works price or the free on board price of the product
- this tolerance cannot be used to exceed any maximum-value threshold of non-originating materials listed in the product specific rules
- however, and this is a particularity in the EU-Japan agreement, this tolerance can be used in cases where the weight of non-originating materials exceeds the threshold in weight foreseen in the product specific rules, provided that the value of those materials does not exceed 10% of the final product's ex-works price - beyond this 10% in value, those materials need to be originating in the EU or in Japan
- specific tolerances apply to textiles and clothing classified in Harmonized System Chapters 50 to 63, which are included in Notes 6 to 8 of Annex 3-A Introductory notes of product specific rules of origin
Cumulation
The EU-Japan Economic Partnership Agreement provides for two ways of cumulating origin
- bilateral cumulation — materials originating in Japan can be counted as originating in the EU (and vice versa) when used in the production of a product in the EU
- full cumulation — the working or processing carried out on non-originating materials in the EU or Japan can be counted as originating to help comply with the product specific rule (in other words processing carried out in Japan can be counted as qualifying operations in the EU, regardless of whether the processing is sufficient to confer originating status to the materials themselves (and vice-versa)
Other requirements
Your product also needs to fulfil all other applicable requirements specified in the Chapter on rules of origin, such as insufficient working or processing, or the non-alteration rule.
Non-alteration rule
Originating products must be transported from the EU to Japan (and vice-versa) without being further processed in a third country.
Some operations can be conducted in a third country if the products remain under customs supervision, such as
- adding or affixing marks, labels, seals or any documentation to ensure compliance with specific domestic requirements of the importing country
- preserving products in good condition
- storage
- splitting consignments
The customs authorities may request evidence of compliance with the rule, such as
- contractual transport documents such as bills of lading
- factual or concrete evidence based on marking or numbering of packages
- any evidence related to the goods themselves
Duty drawback
Under the EU-Japan EPA, it is possible to get a refund on duties previously paid on non-originating materials used to produce a product that is exported under a preferential tariff.
Origin procedures
Exporters and importers have to follow the origin procedures. The procedures are set out in Section B of Chapter 3 on Rules of Origin of the agreement. They clarify, for example, how to declare the origin of a product, how to claim preferences or how the customs authorities can verify the origin of a product.
How to claim a preferential tariff
Importers can claim preferential tariff treatment based on
- a statement of origin provided by the exporter or
- a statement of origin based on ‘importer’s knowledge’
For details please consult
- EU-Japan EPA guidance on claim, verification and denial of preferences
- EU-Japan EPA guidance on confidentiality of information
Statement on origin
Self-declaration by the exporter
Exporters can self-declare that their product originates in the EU or Japan by providing a statement on origin.
In the EU it can be made by
- an exporter registered in the Registered Exporter System (REX), and the same REX number can be also used for some other EU preferential trade agreements (for example the EU’s trade agreement with Canada)
- any exporter provided that the total value of the consignment does not exceed €6,000
In Japan it can be made by
- an exporter with an assigned Japan Corporate Number
What should the statement on origin contain?
- the statement on origin should appear on an invoice or on any commercial document identifying the product
- the text of the origin declaration can be made in any of the official languages of the EU as well as the Japanese language, and can be found in Annex 3-D, the importing country may not require that the importer submits a translation of a statement on origin
- the exporters need to indicate the origin criteria used in their statement on origin with a code (see in Annex 3-D)
Submission and validity
- the statement on origin remains valid for 12 months from the date it was made
- normally the statement on origin will be for one consignment, but it may also cover multiple consignments of identical products during a period not exceeding 12 months.
Importer’s knowledge
- importers can claim preferential tariffs based on their own knowledge of the origin of the imported products - it can be based on supporting documents or records provided by the exporter or manufacturer of the product, which are in the importer’s possession. EU-Japan EPA guidance on importer's knowledge provides additional explanations
- as an importer is making a claim using their own knowledge, no statement on origin is used and no exporter or producer needs to be identified or take any action pertaining to the preferential origin of goods in the exporting Party
- the importer using ‘importer’s knowledge’ does not need to be registered in the REX database
Verification of origin
The customs authorities may verify whether a product imported is indeed originating or fulfils other origin requirements. Verification is based on
- administrative cooperation between customs authorities of the importing and the exporting parties
- checks done by local customs - visits of the importing party to the exporter are not allowed
- the authorities of the importing party determine the origin and inform the authorities of the importing party of the results
Product requirements
Technical rules include technical regulations, standards and conformity assessment procedures. These rules define the specific technical characteristics that your product should have, such as design, labelling, packaging, functionality or performance and are important because they ensure that important public policy objectives, such as the protection of human health or the safety of the environment, are achieved.
These requirements can be related to such issues as
- Technical Rules and Requirements
- Health and Safety Rules and Requirements, SPS
- Environmental Regulations which apply to Imported Goods.
You need to follow these rules so your products can be evaluated to see whether they conform to the necessary technical standards.
To find out about the rules and requirements applicable to your product go to My Trade Assistant and enter your product name or code.
You can check the product categories below for more specific product requirement details and relevant links
- Foods (Meat and meat preparations; Dairy products; other animal products; Marine products; fruits & vegetables and other plant products; other foods includes confectionary liquor)
- Food contact materials
- Machinery and equipment
- Pharmaceuticals, quasi-pharmaceutical products and cosmetics
- Toys
- Wood products in construction materials
Sanitary and phytosanitary (SPS) measures (e.g. laws, regulations, standards) are measures to protect humans, animals, and plants from diseases, pests, or contaminants.
They ensure that food products placed on the market, including imports from outside the EU, are safe for consumers.
You can find more information on SPS measures between the EU and Japan here.
Like the EU, Japan has some of the highest food safety standards in the world. For example, Japan does not allow the use of growth hormones in its beef production, and regulations controlling GMOs are of great importance to Japanese consumers.
All products imported from Japan need to comply with EU standards. This includes the EU's ban on hormone-treated beef and its rules on the use of antibiotics.
Furthermore, all imports of animal products to the EU from Japan must be accompanied by a veterinary certificate.
Only a competent authority in Japan, which the Commission has formally recognised as being able to certify compliance with the EU's import requirements, can issue such a certificate.
The trade agreement helps ensuring that your products are not hindered from entering the Japanese market by unjustified SPS trade barriers and helps streamlining and expediting the procedures for approving your food exports into Japan.
If you are importing from Japan into the EU find out more about SPS requirements here.
Find the specific rules and requirements for your product in My Trade Assistant.
Technical barriers to trade
Although technical rules are important, they can at times act as a barrier to international trade and can thus be a considerable burden for you as an exporter.
- if you think you are facing a trade barrier that slows your business down or prevents you from exporting, you can tell us
- report what is stopping your exports to Japan using the online form and the EU will analyse your situation and take appropriate action
Customs clearance documents and procedures
Customs clearance typically include controls on
- the duties to be paid
- the correct description of the goods, their origin and value
- security and safety measures (smuggling, drugs, cigarettes, weapons, counterfeited products, counterterrorism)
- compliance with specific legislation such as environmental legislation, health requirements, veterinary, phytosanitary, and quality regulations
The EU-Japan agreement ensures more efficient customs procedures to facilitate trade and reduce costs for businesses.
Documents
You can consult detailed step-by-step guides that describe the different types of documents you should prepare for the customs clearance of your products.
Depending on your product, the customs authorities may require all or some of the elements below
- commercial invoice (find the specific requirements regarding its form and content in My Trade Assistant)
- Bill of lading or Airway bill
- packing list, freight accounts and insurance certificates (necessary in some cases)
- import licences for certain goods
- certificates showing your product complies with mandatory product regulations, such as health and safety requirements, labelling and packaging
- proof of origin - origin declaration
For more certainty, you may wish to apply for Binding Tariff Information, and/or Binding Origin Information in advance.
For detailed information about the documents you need to present for customs clearance for your product, go to My Trade Assistant.
Japan Customs provides information about Japanese customs procedures, including required documents
Japan is also home to nine different customs jurisdictions, and it may be worth contacting the ones relevant to you to make the customs process smoother for your product.
Procedures
For a description of how to prove the origin of your products to claim a preferential tariff and of the rules relating to the verification of origin by customs authorities, please refer to the section on rules of origin above.
For general information on customs procedures for import and export, visit the website of DG Taxation and Customs Union.
Intellectual property and geographical indications
The EU-Japan EPA provides for an enhanced intellectual property rights protection for European companies exporting innovative, artistic, distinct and high-quality products to Japan. The commitments are reinforced and include provisions on protection of trade secrets, trademarks, copyright protection, patents, minimum common rules for regulatory test data protection for pharmaceuticals, and civil enforcement provisions.
The agreement recognises the special status and offers protection on the Japanese market of more than 200 European agricultural products from a specific European geographical origin, known as Geographical Indications (GIs). Owners of bilaterally agreed Geographical Indications in the agricultural, food and beverage sectors benefit from protection against counterfeiting. A list of protected Geographical Indications in the EU and Japan, can be found in Annex 14-B of the EPA.
- The Japan Patent Office provides an introductory overview to intellectual property rights in Japan
- EPA Factsheet on Geographical indicators by The EU-Japan Centre for Industrial Cooperation
- The European IPR Helpdesk offers a Helpline service for direct support on intellectual property issues.
Patents
The EU-Japan EPA affirms that the two parties will work together to maintain strengthen patent protection.
Under the agreement, both the EU and Japan have committed to grant an extension of the duration of the patent protection of pharmaceutical products and agricultural chemical products. To learn more about the patents in Japan, including on the filing and examination processes, please refer to the Japan Patent Office.
Other intellectual property issues
The Japanese Patent Office provides overviews on utility models, designs, trademarks and copyrights.
The Ministry of Economy also explains further about the enforcement of your intellectual property rights.
Services
The agreement makes it easier for EU and Japanese companies to provide services and offers greater mobility for company employees to perform their work on the spot.
Temporary movement of company personnel
Annex 8-C: Understanding on Movement of Natural Persons for Business Purposes
The schedule of the European Union and that of Japan in Annex III to Annex 8-B prescribe certain reservations and further provisions as to business visitors for establishment purposes, intra-corporate transferees, investors and short-term business visitors. Annex III to Annex 8-B is available at the following links
- Schedule of the European Union
- Schedule of Japan
Certain reservations, limitations and further provisions as to contractual service suppliers and independent professionals are prescribed in the schedule of the European Union and that of Japan in Annex IV to Annex 8-B. Annex IV to Annex 8-B is available at the following links
- Schedule of the European Union
- Schedule of Japan
The EPA contains a number of provisions that apply horizontally to all trade in services, such as a provision to reaffirm the Parties’ right to regulate services. The EPA affirms the right of authorities to keep public services public and will not force governments to privatise or deregulate public services, such us in the sectors of healthcare, education and water.
Specific commitments were agreed in sectors, such as
- postal and courier services
- telecommunication
- maritime transport services
- financial services
Regarding the commitments for cross-border trade in services, please see Section C of Chapter 8 of the Agreement.
Movement of qualified personnel
General information about visas
- Information about the Classification of Visas for working and long-term stay is available on the Ministry of Foreign Affairs
- Information about Acquiring Visas is provided by the
- Ministry of Foreign Affairs : General information and procedures for acquiring visas.
- Immigration Services Agency of Japan: Application for Certification of Eligibility (English) / Application forms for acquiring visas (English and Japanese).
- JETRO: How to set up business in Japan: Section 2. Visas and Status of Residence (English) / French / German
- Manufactured Imports and Investment Promotion Organization(MIPRO): The Mipro’s Guide to Starting a Business in Japan - Statuses of Residence - (English)
- METI: New System Facilitating Foreign Entrepreneur Business Establishment (English) － Several local governments formulated a plan and obtained METI approval for a project encouraging foreign entrepreneurs to start businesses. Foreign entrepreneurs covered by the approved plan will be eligible to enter and stay in Japan for up to one year, for the purpose of preparation activities to start a business. In order to be covered, foreign entrepreneurs must submit their plan for start-up activities (“a new business implementation plan”) to the relevant local government and obtain its approval.
- Fukuoka Prefecture: Japan’s First “Startup Visa (Entrepreneurial Incentives for Foreigners”) - example
Business activity limitations of contractual service suppliers and independent professionals in Japan
With regard to some services, the scope of business activities are limited in such manner as prescribed in the Appendix IV “Limitations of business activities of contractual service suppliers and independent professionals in Japan” of the Annex 8-B “Schedules for Chapter 8” of the agreement.
There are many labour laws pertaining to the protection of workers in Japan. Those labour laws apply in principle to all employments in Japan, regardless of whether the employer is Japanese or foreign, or whether the company is foreign or incorporated in Japan. The regulation for those laws also applies to foreign workers in Japan as long as the foreign workers meet the legal definition of workers under these laws.
General information about the overall labour law system in Japan related to human resource management can be obtained from the websites mentioned in the following headings
General information about human resource management
- JETRO: How to Set Up Business in Japan: Section 4. Human Resource Management (English) / French / German
- General information concerning employment and labor laws, regulations, and standards in Japan is provided by MHLW: Policy Information: Employment, Security, & Labour (English)
- Manufactured Imports and Investment Promotion Organization(MIPRO): The Mipro Guide to Starting a Business in Japan - Public Insurance and Employment Management -(English)
Rules to be noted in the case of foreign employment
- MHLW: Rules to be noted in the case of foreign employment (Japanese)
- MHLW: Mandatory notification of status of foreign workers and Guideline for Employers concerning Appropriate Approaches to Improving Management of Foreign Workers (English)
Information on the main labour regulations
- Industrial Safety and Health Act (English and Japanese). Up to date information only in Japanese
- Labour Contracts Act (English and Japanese). Up to date information only in Japanese
- Labour Standards Act (English and Japanese). Up to date information only in Japanese
- Labour Laws of Japan (English and Japanese)
Telecommunication and computer information services
- telecommunications is broadly defined by the Telecommunications Business Act as “transmitting, relaying or receiving codes, sounds or images by cable, radio or any other electromagnetic form.”
- telecommunications service is defined as, “intermediating communications of others by using a telecommunications facility, or otherwise offering a telecommunications facility for communications by others”, and
- telecommunications business is then defined as “a business in which the service provider provides a telecommunications service in order to meet the needs of others, except the provision of a broadcasting facility under the Broadcasting Act”.
The Manual for market entry into the Japanese telecommunications business - available only in Japanese - that generally fall under the definition of a “telecommunications business” and thus require notification or registration.
Entry into the Japanese market
- Ministry of Internal Affairs and Communication: Manual for Market Entry into the Japanese Telecommunications Business, June 2016 (English). Please consider that English version may not be up-to-date. In addition, supplementary materials (including, inter alia, example cases indicating whether the notification requirement is applicable to particular businesses) are available only in Japanese version, dated May 2019, as well as the supplement thereto dated October 2019.
- Following manuals and guidelines are also available here:
- Manual for Market Entry into General Cable Broadcasting Business (English);
- Manual for Construction of Networks by Telecommunications Carriers (English); and
- Guidelines for Use of Poles, Ducts, Conduits and Similar Facilities Owned by Public Utilities (English).
Tightening regulations applicable to foreign investment in IT sector
Addition of Businesses Required to Submit Prior Notification Concerning Inward Direct Investment (METI, English) - IT-related businesses have been added to the industries subject to the prior-notification requirement regarding inward direct investments.
Public procurement
Every year, national, regional and municipal governments in Japan and the EU buy – or procure – goods and services worth billions of euros from private companies. They issue public contracts or tenders which companies then bid for.
The EPA extends the access to public procurement contracts and opens new markets for companies of both sides.
The EU and Japan have agreed on rules that
- prohibit unfair discrimination by one side against bidders from the other side
- maximise transparency in tendering for public contracts to ensure firms are aware of opportunities on both sides
- maximise the opportunities for EU firms to participate in public tenders in Japan at all government levels – national, regional and municipal
The increased access for EU companies to contracts put out for tender in Japan cover sectors such as
- railways
- hospitals
- academic institutions
- electricity distribution
- public procurement factsheet (EU)
- public procurement factsheet
- public procurement guidelines
- public procurement presentation
- Guide for EU Suppliers on Government Procurement in Japan
Investment
The agreement promotes investment between the EU and Japan and reaffirms the right of each party to regulate legitimate policy objectives agreed in a non-exhaustive list. Bilateral negotiations are ongoing for concluding a potential agreement on investment protection.
With regard to cross-border trade in services and investment liberalisation, the EU-Japan EPA has adopted a negative list system that lists the existing and future non-conforming measures to be reserved while liberalising all cross-border trade in services and investment areas in principle.
Regarding the commitments for investment liberalisation, please see Section B of Chapter 8 of the Agreement.
Regarding the reservations for existing measures of the European Union and Japan, please refer to the schedule of the European Union and that of Japan set out in Annex I to Annex 8-B of the Agreement, available at the following links:
- Schedule of the European Union
- Schedule of Japan
Regarding the reservations for future measures of the European Union and Japan, please refer to the schedule of the European Union and that of Japan set out in Annex II to Annex 8-B, available at the following links:
- Schedule of the European Union
- Schedule of Japan
Regarding the movement of investors for business purposes, please refer to the Services section above.
How to set up business in Japan
Overview of setting up business in Japan
- Registration procedures where a foreign national establishes a company in Japan, or where an officer of a company or corporation lives abroad are provided by the Ministry of Justice (MOJ): Procedures for commercial and corporation registration for foreign nationals and expatriates (English)
- Manufactured Imports and Investment Promotion Organization (MIPRO) provides:
- Guide to starting a business in Japan
- The Mipro’s Guide to Starting a Business in Japan - Drawing up a Business Plan (English)
- The Mipro’s Guide to Starting a Business in Japan - Tax Edition (English)
- The Mipro’s Guide to Starting a Business in Japan - Establishing a Company (English)
- The Mipro’s Guide to Starting a Business in Japan - Preparation for Start-up (English)
- Guidebook for Starting a Business in Japan - Authorization (English)
- How to Set Up Business in Japan (English) / French / German
- Investing in Japan’s local regions
- In addition to providing information on the above web-page, JETRO provides assistance to foreign-affiliated companies that have already invested in Japan and are planning to set up additional establishments in local regions: Support for foreign-affiliated companies (English)
Required forms
- JETRO provides English translations of blank forms and English samples of documents required for setting up a business in Japan: Step 1. Incorporation Your Business (English)
- MOJ provides blank forms for incorporation including the originals of the English translations listed in JETRO’s website above: Forms for incorporation (Japanese)
- MOJ provides information about Online incorporation procedure (Japanese)
Restrictions on foreign direct investment into Japan
Overview of the procedures under the Foreign Exchange and Foreign Trade Act
Foreign Exchange and Foreign Trade Act (English and Japanese). However, please consider that the English translation is not always up to date. For up to date information please consult the Japanese version
Explanation about the scope of applicability of the Foreign Exchange and Foreign Trade Act
Under Article 26(1) of the Foreign Exchange and Foreign Trade Act (“FEFTA”), ‘foreign investor’ means any one of the following persons who makes inward direct investments, etc. listed in the items of Article 26(2) of the FEFTA, or a specified acquisition defined in Article 26(3) of the FEFTA:
(i) an individual who is a non-resident of Japan;
(ii) an entity established pursuant to a foreign law or having a principal office in a foreign country;
(iii) a Japanese company in which the sum of the voting rights held directly, or indirectly through a prescribed company, by persons as set forth in (i) and/or (ii) above is 50% or more of the total voting rights; or
(iv) a Japanese entity in which persons as set forth in (i) above constitute either a majority of all of the officers of the company or a majority of the officers having representative authority.
- Ministry of Finance:
- Amendment Bill of the Foreign Exchange and Foreign Trade Act (October 21, 2019) - The Cabinet approved the Amendment Bill of the Foreign Exchange and Foreign Trade Act on October 18, 2019. The Bill introduces an exemption from the prior-notification requirement and adjusts the coverage of foreign direct investment.
- Frequently Asked Questions on the Amendment Bill of the Foreign Exchange and Foreign Trade Act (English)
- Exemption from Prior-Notification Requirement (English)
- Factors to be considered in the examination process of inward direct investment (English)
Industries in which prior notifications are required
- JETRO: Industries in which Prior Notifications Are Required before Foreign Direct Investment into Japan (English and Japanese)
- METI: Addition of Businesses Required to Submit Prior Notification Concerning Inward Direct Investment, etc. (English) - IT-related businesses have been added to the industries subject to the prior-notification requirement regarding inward direct investments. The public notices related to this revision are:
Notification forms
- Bank of Japan: Prior notification forms required for foreign direct investment into Japan (Japanese)
The correct form to be used will depend on the means of investment.
Government incentives to promote foreign direct investment into Japan
- METI: Measures to promote foreign direct investment in Japan (English)
- JETRO: Incentive Programs (English)
Institutions for inquiries & consultation
Office of Invest Japan
Each of the relevant ministries and agencies has an Invest Japan Office (English), which responds to the following actions by potential investors
- requests for information on investment and on applying for investment opportunities; and
- complaints about processing of the advanced notification system, the so-called “no-action-letter system”, and investment.
- English inquiry forms to contact the Office of Invest Japan in each relevant ministry/agency are provided by JETRO: INVEST JAPAN Offices: Contact Information (English)
- One-stop center for foreign investors planning to establish or expand their business base in Japan is provided by JETRO: Invest Japan Business Support Center (IBSC) (English)
Invest Japan Hotline
- JETRO’s support center for foreign companies and foreign-affiliated companies planning to invest in Japan. Services are available in languages other than Japanese: Invest Japan Hotline (English)
Other useful links
- Cabinet Office: competent government offices and JETRO (English)
SMEs
The EU-Japan agreement contains a dedicated chapter on Small and Medium-sized Enterprises (SME) specifying that the parties shall provide information on access to each other’s market.
Japanese website to support EU SMEs exporting to Japan
This website dedicated for European SMEs includes links to authorities on specific trade issues and a searchable database by customs tariff code to get market access information for the Japanese market.
- website in English
- website in Japanese
Distribution channel
Establishing a practical distribution channel is key to getting your product to Japanese shelves and retailers. It requires securing Japanese national and local distributors, especially to overcome linguistic, technical, and logistical barriers to trade.
The Japan External Trade Organisation (JETRO) also has a platform for matching international business, where Japanese and foreign sellers and buyers can place notices.
Explanation about the importance of the role of trading firms
Trading firms play an important role in the sales of imported goods in Japan acting as liaisons between foreign manufacturers and Japanese purchasers, and vice-versa.
The role of trading firms includes, among other things
- identifying demand
- assisting with negotiations between manufacturers and purchasers
- completing import/export procedures.
Trading firms can provide assistance with identifying demand and/or local partners in Japan and can be
- general trading firms, which deal with almost anything
- specialised trading firms, which deal only with specific products (e.g., steel products, food products, etc.).
