Resident Directors No Longer Necessary for Corporations in Japan
By TOSHIYUKI ARAI, TIMOTHY A. MACKEY, KOTA KIKUCHI & SACHIKO TANIGUCHI
On March 16, 2015, the Ministry of Justice in Japan (the “MoJ”) repealed an old policy and announced they would accept incorporation applications with respect to all forms of Japanese corporate entities regardless of whether that entity has a local director or not.
Strictly speaking, there was never any statutory requirement that there be at least one resident of Japan acting as a director in order to incorporate a Japanese corporate entity. The MoJ (acting in its role as administrator of the incorporation of corporate entities) implemented the previous policy requiring one director be a resident in Japan based on the rationale that such policy protected the rights of stakeholders and creditors of the company.
The amendment to this policy by the MoJ is one of the few structural reforms which the Abe administration has implemented so far in its efforts to boost Japan’s competitiveness though the Abe administration’s so-called “three arrows”, the other facets of which have been a massive fiscal stimulus and aggressive monetary easing by the Bank of Japan.
The MoJ and the Regulatory Reform Council of the Abe administration have indicated that further discussions with respect to relaxing the issuance of visas and registration of foreign companies are taking place. The Paul Hastings Tokyo office includes Japanese lawyers that can assist in Japanese law commercial needs. We plan to issue further alerts in relation to any upcoming reforms of this nature.