Japan to tighten foreign investment rules for national security

Oct. 5 06:00 am JST 9 Comments
TOKYO
The government is set to tighten regulations on foreign investment in Japanese companies in areas sensitive to national security, including space development and nuclear energy, government sources said.

The government will revise the foreign exchange law to require foreign investors to seek prior approval before obtaining a 1 percent or higher stake in such a company, lowering the threshold from the current 10 percent, the sources said. It will submit a relevant bill to the Diet during its session that started Friday.

The stricter rules will also cover arms producers as well as the aeronautics industry, they said, while the government also plans to simplify procedures to encourage foreign investment in sectors not related to national security.

The move comes as the United States and European nations have enhanced investment controls amid growing concern about possible leaks of sensitive technology to countries such as China.

The government will also require foreign stakeholders to give prior notification before influencing management through measures such as dispatching board members and selling core businesses, the sources said. Violators will be ordered to sell their shareholdings.

© KYODO

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