Amendments to the Foreign Exchange and Foreign Trade Act (“FEFTA“) intended to facilitate beneficial inbound investment while strengthening Japan’s ability to address investments that may raise national security concerns were promulgated on 5 June 2026. On 16 September 2026, Japan’s Ministry of Finance (“MOF“) published the results of public consultations on changes to foreign direct investment (“FDI“)-related regulations to implement the June 2026 FEFTA amendments. Revised regulations subject to public comment included the relevant cabinet orders, ministerial ordinances and notices. The amended regulations are scheduled to take effect on 4 January 2027 and fully enter into force on 3 February 2027.
The MOF’s announcement provide the first definitive indication of the timing and final form of the regulatory framework that will implement the June 2026 FEFTA amendments.
Background
The principal objectives of the FEFTA amendments are as follows:
- Strengthen screening of investments that could affect Japan’s national security.
- Address transactions that result in indirect acquisition of control of Japanese businesses through overseas entities.
- Introduce a risk mitigation framework.
- Enhance the relevant authorities’ reporting and information-gathering powers.
- Continue to promote legitimate foreign direct investment into Japan.
Public consultation results
The public consultation period ran from 3 July to 2 August 2026. According to the MOF and the e-Gov public comment portal, 52 comments were submitted. The authorities published detailed responses to the comments received and explanatory materials. The final regulatory package includes amendments to cabinet orders, ministerial ordinances and various ministerial notices relating to Japan’s FDI screening framework. It also reflects certain revisions made following the consultation process.
Timing
The MOF has announced the following implementation schedule:
| Event | Date |
| Regulations effective | 4 January 2027 |
| Full entry into force | 3 February 2027 |
Practical implications for investors
Foreign investors, multinational groups, private equity sponsors and other transaction parties contemplating investments involving Japanese businesses should review ongoing and upcoming transactions in light of the forthcoming changes.
In particular, parties should assess the following:
- Does a proposed investment fall within the expanded scope of FEFTA review?
- If a transaction includes indirect acquisition structures involving overseas entities, will it trigger notification requirements?
Additional analyses will be required during the planning stages of a transaction and transaction documents and timetables should be updated to reflect the new regime.
The publication of the final implementing measures significantly reduces uncertainty regarding the structure of the revised framework and enables investors to begin preparing for implementation before the regime takes effect in early 2027.
Looking ahead
With the public consultation process complete and the implementing regulations formally promulgated, companies considering acquisitions, investments, joint ventures or restructurings involving Japanese businesses should assess at an early stage whether the amended FEFTA rules may affect their transaction planning, filing strategies or timetables. We will continue to monitor official guidance and developments relating to the implementation of the revised FDI screening framework and will provide updates as additional information becomes available.
