{"id":916,"date":"2023-10-12T17:27:51","date_gmt":"2023-10-12T08:27:51","guid":{"rendered":"https:\/\/taurus-financial.com\/en\/\/?page_id=916"},"modified":"2023-10-23T17:34:14","modified_gmt":"2023-10-23T08:34:14","slug":"special-business-for-overseas-investors-etc","status":"publish","type":"page","link":"https:\/\/taurus-financial.com\/en\/special-business-for-overseas-investors-etc\/","title":{"rendered":"Special Business for Overseas Investors etc."},"content":{"rendered":"\n
\n

What is the Special Permitted Business for Overseas Investors
\nEstablishment of Special Permitted Business for Overseas Investors<\/h2>\n

Attracting Foreign Asset Managers to Japan is an important policy to improve the position of the Tokyo Financial Market. Therefore, the Japanese Government will start a preferential treatment for Foreign Asset Managers from the end of 2021 to the beginning of 2022.<\/p>\n

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Special Permitted Business for Overseas Investors<\/strong>
\nEstablishment of \u201cSpecially Permitted Business for Overseas Investors\u201d has been established as a permanent system, and Fund Management Business and Offering or Private Placement Business for group investment schemes (that meet specific requirements) with \u201coverseas investors\u201d allow to carry out by notification.<\/p>\n

Specially Permitted Business During Transition Period<\/strong>
\nIn addition to the Specially Permitted Business for Overseas Investors, there is a unique system for \u201cSpecially Permitted Business During Transition Period.\u201d Specially Permitted Business During Transition Period can carry out within 5 years only from the notification. It is a time-limited measure for 5 years from the law\u2019s enforcement date. This is a license for an Asset Manager who is currently licensed in a foreign country and wants to move the investment base to Japan. It is not allowed to solicit domestic customers who live in Japan.<\/p>\n

The law stipulates the reasons for refusal to register \u201cSpecially Permitted Business During the Transition Period\u201d such as those who have not received a license in a foreign country, those who have not passed the period (specified by a Cabinet Order) after receiving the license, and those who do not have a proper organizational structure. The law expects companies with a proven track record to carry out Investment Management in foreign countries.<\/p>\n

After submitting a notification of \u201cSpecially Permitted Business During the Transition Period,\u201d the Foreign Investment Manager can carry out Discretionary Investment Business, Investment Trust Consignment Business, Fund Management Business of a foreign collective investment scheme, and other business specified by Cabinet Order at the office established in Japan.
\nBesides, \u201cSpecially Permitted Business During the Transition Period\u201d can carry out the offering or private placement of<\/p>\n

beneficiary certificates of foreign investment trusts,
\nforeign investment securities and foreign collective investment
\nschemes that are managed by themselves at the discretion of
\nthe investment management business operator
\nforeign investment trust beneficiary securities as a consignor,\nforeign collective investment schemes or private placements as an issuer.<\/p>\n

General<\/h2>\n

The \u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d is designed very similarly to the \u201cSpecially Permitted Businesses for Qualified Institutional Investors.\u201d<\/p>\n

It is noted that the difference between the \u201cSpecially Permitted Businesses for Qualified Institutional Investors, etc.\u201d and \u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d is \u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d includes the public offering business of the collective investment scheme.<\/p>\n

\u201cSpecially Permitted Businesses for Qualified Institutional Investors\u201d is limited to carry out the private offering, and the number of right holders per fund is limited to 499 (including 49 investors who are eligible for Specially Permitted Business), which is the maximum limit of private offering of paragraph 2 securities. However, it will be possible to establish and manage a more significant number of funds by \u201cSpecially Permitted Businesses for Overseas Investors, etc. \u201c<\/p>\n

Investment or contribution mainly from non-residents<\/h3>\n

The fund invested or contributed to the collective investment scheme of \u201cSpecially Permitted Businesses for Overseas Investors, etc.,\u201d
\nis limited to mainly invested or contributed by non-residents and excluded the fund specified by the Cabinet Office Ordinance, which risks protecting investors.<\/p>\n

In the Financial Instruments and Exchange Act, \u201cmainly\u201d means more than 50%. It means that the requirement for notification is the investment from non-residents should be more than 50%.<\/p>\n

Restriction on Double-layer structure<\/h3>\n

When a fund of \u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d receives investments from SPCs or funds, it does not fulfill the requirements for \u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d if some investors do not qualify as \u201coverseas investors.\u201d<\/p>\n

Overseas Investors<\/h3>\n

Based on (draft) Article 63-8, Paragraph 2 of the Financial Instruments and Exchange Act, \u201cForeign Investor\u201d is defined as below, which clarifies that foreign corporations and certain non-residents, qualified institutional investors, and closely related persons are eligible to carry out \u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d<\/p>\n

A Foreign Company or an Individual who has an address in a foreign country defined by a Cabinet Office Ordinance in consideration of the knowledge, experience, and property status.
\nQualified institutional investors (including those specified by Cabinet Office Ordinance as equivalent persons, excluding foreign companies and individuals in the preceding item)
\nA person who has a close relationship with a person who carries out the acts listed in the preceding items specified by a Cabinet Office Ordinance.
\nDetailed requirements are entrusted to Government Ordinances and Cabinet Office Ordinances; we expect the range of Investors and closely related parties for \u201cSpecially Permitted Business for Foreign Investors\u201d are similar to that of \u201cSpecially Permitted Businesses for Qualified Institutional Investors, etc.\u201d<\/p>\n

Notification<\/h2>\n

Regarding the notification procedure for \u201cSpecially Permitted Businesses for Overseas Investors, etc.,\u201d the notification items are as follows:<\/p>\n

Trade name, Company Name, or Personal Name
\nIf you are a company, the amount of capital or the total amount of investment
\nIf you are a company, the company name or name of the officer
\nIf there is an employee required by a Cabinet Order, the name of the person
\nType of business (refers to the type of business related to the acts listed in each item of paragraph 1 of the preceding article)
\nName and location of the main business office (in the case of a foreign company, the main business office in Japan)
\nName and location of the business office that carries out \u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d
\nIf you are doing other business, the type of business
\nOther matters specified by Cabinet Ordinance
\nIn addition to public inspections at the Finance Bureau, it is required public inspections at the main business offices and all offices to carry out \u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d and online public inspection.<\/p>\n

Reasons for Disqualification<\/h2>\n

Section 6 stipulates the reasons for disqualification to carry out \u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d<\/p>\n

Disqualification includes general reasons for disqualification in the Financial Instruments Business, those who do not have a proper organization, and those who are recognized and do not have the necessary systems in place. We expect that \u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d will be subject to substantive examination even though it is regulated as notification.<\/p>\n

Obligation to set up a domestic office<\/h3>\n

Companies that do not have an office in Japan, companies that do not have a representative in Japan, and individuals who do not have an address in Japan will be disqualified.<\/p>\n

Restriction of Business Activity<\/h2>\n

It is necessary to report when there is a change in the notification items. In addition, \u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d is regarded as the Financial Instruments Business Operator and applied some regulations.<\/p>\n

The range of application of the regulation to the Financial Instruments Business Operator is almost the same as that of \u201cSpecially Permitted Businesses for Qualified Institutional Investors\u201d
\nHowever, it differs from the \u201cSpecially Permitted Businesses for Qualified Institutional Investors, etc.\u201d in terms of \u201cBusiness Management System Setting\u201d that is applied only to the \u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d<\/p>\n

\u201cThe Financial Instruments Business Operator must establish a Business Management System in accordance with the Cabinet Office Ordinance to properly carry out the Financial Instruments Business or Registered Financial Institution business.\u201d It is necessary to wait for Cabinet Order and Cabinet Office Ordinance regarding regulations related to the obligation to establish the Business Management System.<\/p>\n

Obligation to notify upon losing qualification<\/h3>\n

Finance Bureau can order to take the necessary measures within 3 months for the following cases:
\n-When the fund that managed by the \u201cSpecially Permitted Businesses
\nfor Overseas Investors\u201d is no longer meets the requirements for
\n\u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d or<\/p>\n

When the money invested or contributed is no longer mainly
\ninvested or contributed by non-residents<\/p>\n

\u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d companies are obliged to notify without delay in the above cases.<\/p>\n

Others<\/h3>\n

Specially Permitted Businesses carried out by the \u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d does not apply to
\n\u201cSpecially Permitted Businesses for Qualified Institutional Investors.\u201d
\nas there is overlapping of the business and target Investors for \u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d and \u201cSpecially Permitted Businesses for Qualified Institutional Investors, etc..\u201d
\nThe Financial Instruments Business Operator can carry out \u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d<\/p>\n

It is required to prepare accounting books, Business Reports and submit them within 3 months after each business year (the period specified by Cabinet Order for foreign companies). Public inspection of explanatory documents or publication on the Internet is required.<\/p>\n

Punishment<\/h2>\n

The Prime Minister can issue an order to suspend or abolition business while setting a period of up to 6 months for the \u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d applicants if they fall under any of the following.<\/p>\n

In addition, there are systems for reporting and inspection. \u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d are supervised as Financial Instruments Business Operators and \u201cSpecially Permitted Businesses for Qualified Institutional Investors, etc.\u201d<\/p>\n

When violating a law or a disposition of an administrative agency based on the relevant laws related to \u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d
\nWhen there is a fact that harms the investors\u2019 interest regarding the operation of \u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d
\nWhen the situation is particularly serious due to fraudulent or extremely unjust acts related to \u201cSpecially Permitted Businesses for Overseas Investors, etc.\u201d\u3002<\/p>\n

Special feature: Promotion of entry of overseas asset managers
\nThe Financial Services Agency is encouraging the entry of overseas asset managers, and else, with the aim of establishing Japan\u2019s position as an international financial center open to the world.
\nFull-scale regulatory reforms are underway, such as tax reform, the establishment of The special business for overseas investors and The special business for the transition period, and simplification of procedures.<\/p>\n

Read more<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"What is the Special Permitted Business for Overseas Investors Establishment of Special Permitted Business for Overseas Investors Attracting Foreign Asset Managers to Japan is an important policy to improve the position of the Tokyo Financial Market. Therefore, the Japanese Government will start a preferential treatment for Foreign Asset Managers from the end of 2021 to […]","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":[],"acf":[],"_links":{"self":[{"href":"https:\/\/taurus-financial.com\/en\/wp-json\/wp\/v2\/pages\/916"}],"collection":[{"href":"https:\/\/taurus-financial.com\/en\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/taurus-financial.com\/en\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/taurus-financial.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/taurus-financial.com\/en\/wp-json\/wp\/v2\/comments?post=916"}],"version-history":[{"count":3,"href":"https:\/\/taurus-financial.com\/en\/wp-json\/wp\/v2\/pages\/916\/revisions"}],"predecessor-version":[{"id":1051,"href":"https:\/\/taurus-financial.com\/en\/wp-json\/wp\/v2\/pages\/916\/revisions\/1051"}],"wp:attachment":[{"href":"https:\/\/taurus-financial.com\/en\/wp-json\/wp\/v2\/media?parent=916"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}