To open a trust in Japan, a settlor draws up a trust agreement, effectively appointing a trustee to handle assets on behalf of a beneficiary. The objectives of the trust can be varied, and the trust property can be defined by the settlor. Our experts in company formation in Japan detail the main structure used for this fiduciary arrangement and can also help you open a trust in Japan.
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What is the structure of a trust in Japan?
The trust is an arrangement made to suit the goal(s) of a settlor in reference to specific objectives and the treatment of the indicated trust property. The trust deed (the document that is used to set up the trust) defines the objective and property, and names the parties to the trust.
To open a trust in Japan, the following parties gather to sign the trust deed:
- The settlor: the one who sets up the trust in Japan, and the one who sets forth the trust objectives;
- The trustee: the one who will take responsibility for the management of the trust, according to the instructions of the settlor;
- The beneficiary: the one who will ultimately benefit from the assets placed in the trust, and who will receive said assets from the trustee, at a pre-defined time, or according to the pre-defined conditions of the settlor. The beneficiary does not need to be a natural person and, in most cases, they do not change for the duration of the trust in Japan.
What is a trust used for?
A trust can be used for various purposes, among which our team lists the following:
- Asset management: used to manage assets at the discretion of the trustee, as instructed by the settlor;
- Asset administration: the same as for the asset management type, with the condition that the trustee administers the assets as instructed;
- Asset securitization: interested parties open a trust in Japan for securitization purposes when they plan on securing assets;
- Other purposes, such as property-related ones (this category can include other property trusts.
In the examples offered above, the trust is Japan is diversified, meaning that it can hold various types of assets (cash and securities, for example).
Our team that can help you open a company in Japan will also assist with the formation of a trust, according to its function and purpose.
What are the duties and obligations of the trust parties?
The trustee who is entrusted with asset management and control enters a fiduciary relationship. They have a duty of care and a duty of loyalty towards the beneficiary, and they agree to manage the assets in the best interest of the said beneficiary.
To open a trust in Japan, the parties will observe the rules and regulations in force, which detail the conditions to form the trust but also their duties and obligations. The Trust Act is the most important of these laws.
How can your team assist me when I open a trust in Japan?
Our agents who specialize in company registration in Japan can also help you draw up the agreement for setting up a trust. Additionally, we can help those interested understand the conditions applicable to all types of trusts, especially those that are subject to specific requirements for listing, such as securities trusts, money trusts, and pension trusts.
According to the Investment Trusts Association in Japan, and as per a report prepared by the Japan Securities Dealers Association (JSDA), the number of publicly offered investment trusts incorporated at the end of 2023 was 5,913. Other data shows that:
- The total assets under management for publicly offered investment trusts had a value of 196,906 billion YEN;
- There were 118 real-estate investment trusts and 8,392 private placement investment trusts;
- The net assets held by trusts were significant in the case of stock investment trusts, estimated at 181,345 billion yen at the end of 2023.
Contact us for more information on how to open a trust in Japan. Our experts will provide all the needed details and, upon request, can also assist with company formation in Japan.