Adds nine sectors to the FDI screening regime

On 24 April 2023, the Government of Japan announced that it would add nine “core business sectors” to the Foreign Exchange and Foreign Trade Act, the country’s foreign direct investment (FDI) screening regime, citing concerns over national security and technology leakage. The sectors targeted include semiconductors, storage batteries, natural gas, metal 3D printers, and machine tools and industrial robots, fertilizers (potassium chloride, etc.), permanent magnets, marine equipment, metals and mineral products. The amendment means that foreign investors who wish to invest in affected sectors will need to notify the Government in advance. This will be the case for both direct investments or acquisitions, as of May 24 2023.

• Type:

  • Entry and establishment (Approval and admission)

• Industry:

  • Manufacturing (Manufacture of computer, electronic and optical products, and electrical equipment, Manufacture of machinery and equipment n.e.c., Other manufacturing)

• Sources:

  • Government of Japan, Addition to the Core Business Sectors of the FEFTA to Secure Stable Supply Chains, https://www.mof.go.jp/english/policy/international_policy/fdi/relateddocument_20230424.pdf, 24 Apr 2023
  • daijiworld, Japan to limit foreign investment in 9 new security-sensitive sectors, https://www.daijiworld.com/news/newsDisplay?newsID=1073460, 25 Apr 2023
  • fdiintelligence, Japan increases FDI scrutiny, https://www.fdiintelligence.com/content/news/fdi-roundup-japan-increases-fdi-scrutiny-scottish-port-gets-300m-private-equity-boost-netflixs-25bn-south-korea-bet-82429, 25 Apr 2023