Thursday, September 12, 2013

Q: Government business subsidy to a foreign firm.

A: A definition of “foreign company” is not clearly defined under investment regulation of Japan, but any corporation with more than one third of foreign investment usually is so. Most national administrative organs apply this term when judging the issue of subsidies. Under Foreign Exchange and Foreign Trade Act (“Foreign exchange regulation”), a foreign investor is defined as follows:

1. Non-resident individual person
2. A corporation established under a foreign company law, including the foreign company’s branch in Japan
3. A corporation invested directly or indirectly more than 50% by one of the preceding investors
4. A Japanese corporation dominated more than half by officers who is a non-resident individual person or officers having representation rights

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