Amendments to Foreign Exchange and Foreign Trade Act of Japan (FEFTA)

The amended Foreign Exchange and Foreign Trade Act on foreign direct investment (FDI) was implemented in May 2020 and aims to tightens FDI in Japan from several aspects such as industry sectors and report content. Under the new rules, foreign investors to obtain approval from regulators for investments in a wide range of sectors (Designated Business and Core Business sectors defined by FEFTA) when the investor plans to buy 1% or more of a Japanese company's issued shares or total voting rights. The original threshold before the amendment was 10% of more of the company's issued shares.

As part of the regulation, the scope of Designated Businesses and Core Businesses was specified. In the energy sectors, the businesses include:

• Power sector business: Transmission, Distribution, Generation (business operators that possess power plants with more than 50MW of capacity)
• Gas sector business: Gas pipeline and gas production, LP gas business
• Oil sector business: Oil refinery, oil storage, crude oil, and natural gas mining

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