Japan to force companies to re-incorporate
by Brian Turner
Japan has proposed changes in its commercial code that would make “quasi-foreign” companies - companies that do most of their business in Japan but that are incorporated elsewhere - illegal.
The cabinet and the lower house of Japan’s parliament have already approved the changes and the upper house is in the process of doing so.
The European Business Community and the American Chamber of Commerce in Japan are both engaged in talks with Japan’s Ministry of Justice to try to stop the changes, which would force such companies to re-incorporate in Japan.
Such a requirement would cost a company between 10 and several million euros, according to the ECB. Some companies would probably choose to stop doing business in Japan rather than spend that much money.
Most US and European banks operating in Japan, global legal firms, and many companies in other sectors would potentially be affected if the changes are implemented.
If the new regulations are put into force, complaint could be made to the World Trade Organization.
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