When a person who does not reside in Japan purchases real estate in Japan, a report must be submitted to the Minister of Finance within twenty (20) days. In recent years, there has been an increase in the number of foreigners purchasing real estate in Japan. Today, let’s take a look at the submission of this report.
Submission of reports based on the Foreign Exchange Act
CONTENTS
1. Report on acquisition of real estate in Japan or rights related thereto
2. Transactions or actions that require reporting
3. Report deadline and submission destination
4. Establishment of a company/corporation and acquisition of shares by non-residents
5. Penalties
1．Report on acquisition of real estate in Japan or rights related thereto
Submission of report to the Minister of Finance：
When a non-resident acquires real estate in Japan or rights related to real estate such as leasehold rights, the non-resident must submit a “Report on the acquisition of real estate in Japan or rights related thereto” to the Minister of Finance via the Bank of Japan within twenty (20) days after the acquisition.
This report must be submitted if the acquisition was made for so-called investment purposes.
What are residents in this context?：
Residents in this contextmeans individuals who have an address or residence in Japan, and corporations and other organizations whose principal offices are in Japan (including branches of foreign corporations located in Japan).
What are non-residents?：
Non-residents in this context means individuals, corporations, and other organizations other than the above residents.上記居住者以外の個人及び法人その他の団体を言います。
2．Transactions or actions that require reporting
Transactions or actions that require reporting：
- When a non-resident acquired real estate in Japan (including acquisition through inheritance, bequest, etc.);
- When a non-resident acquired rights (lease rights, superficies rights, mortgages, etc.) regarding real estate in Japan.
* Submission is not required if any of the following apply.
Cases where reporting is not required：
- In cases where acquired for the purpose of residence by the non-resident, the non-resident’s relatives, employees, and other employees (a report must be submitted for use as a short-term stay such as a vacation home or second home);
- In cases where acquired by a non-resident who conducts non-profit business in Japan for the purpose of carrying out said business;
- In cases where acquired for the non-resident’s office use;
- In cases where acquired from other non-residents.
| ’Basis Clause’ Article 12 of the Reporting Ministerial Ordinance |
3．Report deadline and submission destination
Report deadline：
You must report within 20 days from the date you acquired the property.
- If the 20th day is a holiday (meaning a day other than a Bank of Japan business day), it needs to submit by the day after the holiday.
- If sent by mail, it is mandatory that it must arrive within 20 days.
submission destination：
It must be submitted to the Minister of Finance via the Bank of Japan.
４．Establishment of a company/corporation and acquisition of shares by non-residents
Establishment of a company/corporation and acquisition of shares by non-residents：
Please note that when a non-resident establishes a corporation such as a stock company or other legal entity in Japan, or when he/she acquire or transfer stock, there are cases that it is necessary to submit a prior submission or post-mortem report under the Foreign Exchange Act.
５．Penalties
The Foreign Exchange Act stipulates penalties for failure to submit submissions or reports.
Penalties vary depending on the nature of the violation.
E.G.:
- Punishment with imprisonment for up to 5 years or a fine of up to 10 million yen, or both.
- Punishment with imprisonment for up to 6 months or a fine of up to 500,000 yen, etc.
| ’Basic Clause’ Chapter 9 “Penalties” of the Foreign Exchange Act |
Should you have any inquiry, please contact us.
This article is based on the information available at the time of writing. Please be sure to check the latest laws and regulations.