The Japanese financial system is characterized by aspects which are similar to those of the major developed states. These aspects include a commercial banking system, specialized-government-owned financial institutions, securities companies, capital markets and money markets. Our company formation consultants in Japan can offer assistance related to setting up a Japanese financial company.
Table of Contents
The regulator of the financial markets in Japan
The regulating authority for financial institutions in Japan is the Financial Services Agency of Japan (FSA) which belongs to the Cabinet Office.
The FSA in Japan maintains the stability of the financial systems in the country and protects the interests of the deposit holders, security investors and insurance policy holders.
It also makes sure that the financial systems in Japan operate smoothly by issuing the appropriate policies and supervising the private financial institutions. Our Japan company formation advisors can offer more details on this matter.
Moreover, the Securities and Exchange Commission, a branch of the FSA, was created to confer “fair, equitable, transparent and sound markets in both securities and financial futures”.
Even though it is not a regulatory authority, the Bank of Japan also possesses some powers to effectuate on-site examinations of the banks which have been opened into bilateral agreements and have current accounts with the Bank of Japan.
Licenses for investment banks in Japan
Investment banks which undertake the following activities must obtain a license or have to register with the Prime Minister in Japan:
• The sale and purchase of securities;
• Brokerage, intermediary or agency of the sale and purchase of securities;
• Underwriting and offering securities;
• Advisory services which are non-discretionary;
• Management services which are discretionary.
The Japan Banking Act
The Japan legislation stipulates that the commercial and investment banking institutions are separated.
The main law which regulates the commercial banking activities in Japan is the Banking Act.
The registration and operation of securities and derivative-related business activities are regulated by the Financial Instruments and Exchange Act of Japan (FIEA). Our company registration representatives in Japan can provide further details on this subject.
Banks in Japan are usually restricted from engaging in securities and derivatives-related activities. In case a bank wants to do such transactions, it has to establish and register a separate entity.
Investors who open a financial company can obtain Japan residency when they make the investment and at the same time apply for the business manager visa which grants them permission to acquire the status of residence. Because several conditions apply in order for the application to be favourably considered by the authorities, we advise those interested to apply with our help.
As an investor in the country, one can also be interested in Japan immigration. Relocating permanently to the country is possible, however, under the standard route, the foreign national will need to have spent ten consecutive years in Japan before submitting his application. In some cases, exemptions can apply if the individual meets the criteria for the reduced period.
In case you would like to know more about the Japanese financial institutions, or if you need assistance in starting a company in Japan, please contact our Japan company formation advisors.