Q.4 Please explain the process of incorporation of a stock company?

　To establish a Kabushiki Kaisha (a joint stock company), simply put, the promoters, who are the investors, decide on the basic matters of the company and prepare the Articles of Incorporation. The Articles of Incorporation must be certified by a Japanese notary. If the Foreign Exchange and Foreign Trade Law requires a prior notification of the acquisition of shares by foreign (legal) persons, the promoters shall notify the Minister of Finance and the minister having jurisdiction over the business in advance via the Bank of Japan before subscribing to the shares and making a capital contribution at the time of incorporation. The investment cannot then be executed until the examination is completed. Therefore, in cases where the prior notification is required, the time required for the establishment procedure is greatly affected.

　Recently, due to the revision of the Foreign Exchange and Foreign Trade Control Law, the scope of the prior notification has been expanded to include IT and semiconductor-related businesses, and many foreign (legal) persons are expected to be affected by this change.

　After the examination of the advance notification under the Foreign Exchange and Foreign Trade Act is completed and the investors have subscribed for shares and paid in capital, the directors, etc. at incorporation are determined. The representative director applies for registration and the company is established.

　On the other hand, under the Foreign Exchange and Foreign Trade Control Law, if the acquisition of shares by foreign (legal) persons can be reported after the fact, then after the investors subscribe to the shares and transfer the capital, an after-the-fact report should be submitted to the Minister of Finance and the minister having jurisdiction over the business via the Bank of Japan. The Foreign Exchange and Foreign Trade Act does not affect the schedule for the establishment procedure.

　

　Refer to Appendix, Flowchart.