Japan: What happened in 2020 and significant events in 2021
Foreign Direct Investment Restrictions Amendments (Overall): The amendment to the Foreign Exchange and Foreign Trade Act and the relevant regulations (the “FDI Amendments”) became effective on 8 May 2020, and with certain exceptions effective on 7 June 2020. The FDI Amendments, among others, lower the threshold of 10% to 1% for prior notification/clearance where a foreign investor wishes to buy shares in a Japanese listed company that operates in certain designated sectors (certain medicine and/or medical device manufacturing sectors have been newly added to such designated sectors since 15 July 2020). The FDI Amendments have also recently introduced certain exemptions to such prior notification/clearance requirements, which include certain asset management-related exemptions.
Further, the FDI Amendments expand the scope of actions subject to the notification requirements (i.e. prior notification/clearance or post notification), and business transfers (including those by way of a merger or corporate split) from a Japanese company to a foreign investor are now subject to the notification requirements.
Data Protection Law Amendments: The amendments to the Act on Protection of Personal Information have been enacted and were promulgated on 12 June 2020. They will become effective within two years from the promulgation date with certain exceptions. The amendments include, among others, expanding the rights of a data subject (e.g. it is now easier to request the suspension or deletion of personal data), a mandatory reporting obligation in the case of data leakage, more severe criminal sanctions, and tougher requirements for overseas data transfer. These amendments are in line with the general trend of approaches taken by foreign regulations, such as GDPR.