FG Firms in Japan

[Mulboyne]

[Captain Japan]

[GomiGirl]

Captain Japan - this is big news around the foreign Chambers of Commerce. All of the heads of these organisations are getting together to draft proposed wording changes to the legislation.

It is one of the biggest things to rock the corporate world in Japan since Meiji Restoration times.

This is big big news. This is just the start and it will heat up very soon as the temperature rises this Summer.

[gomichild]

*edited*

[Mulboyne]

Link may expire so whole story posted

FT via Yahoo: Japan law could cost foreign investment banks
Japan's Ministry of Justice has refused to amend a controversial bill that could cost international investment banks hundreds of millions of dollars, making it likely that the proposed law will be passed unchanged by the upper house of parliament this week, lawyers said. The move is a severe blow for the international business community, led by the American Chamber of Commerce, the European Business Council and the International Bankers Association, which lobbied the MoJ to amend the proposed law.

The dispute is over article 821 of the commercial code, which deals with companies that do business in Japan but are incorporated offshore. Most foreign investment banks run their Japan operations through a branch but are incorporated elsewhere. Approval in the upper house would, from April 2006, make so-called quasi-foreign companies illegal and force them to re-incorporate in Japan, a process that could take up to 18 months and trigger hefty administrative costs the EBC estimates at "hundreds of millions of euros".

"The new corporation law including article 821 is likely to be passed this week, possibly even on Wednesday. There seems to be not much political will to be flexible. There will be no amendment. It will not be changed," one lawyer said. Discussions over the proposed changes have infuriated international investment banks, many of whom may now be forced to reincorporate, despite an apparent "get-out clause" designed by the MoJ to try to offset the consequences of the changes.

The MoJ has offered a "favourable interpretation" of the bill that it claims means most international companies will not have to re-incorporate. The ministry has stated in a Diet session that any company that does business only in Japan would not be treated as a quasi-foreign company "if it has a plan to do business overseas". The lawyer said: "The key question then becomes 'what constitutes a plan?' On this there has been no guidance."

The MoJ has claimed this favourable interpretation shows it has listened to the concerns of the business community, but lawyers said this "solution" provides no certainty as there is no guarantee the MoJ's interpretation will always be the official interpretation. At a meeting last Thursday between the FSA and the international investment banks, the regulator sought to reassure the banks that the MoJ's solution should provide them with "comfort" but bankers in Tokyo said they were not reassured.

They said that in the past authorities in Japan have selectively interpreted rules and regulations to penalise foreign companies, providing international investment banks with no assurance that they should trust their future legal status to the MoJ's interpretation. The MOJ declined to comment.

[omae mona]

FT via Yahoo: Japan law could cost foreign investment banks
Japan's Ministry of Justice has refused to amend a controversial bill that could cost international investment banks hundreds of millions of dollars, making it likely that the proposed law will be passed unchanged by the upper house of parliament this week, lawyers said. .

Crap. One more blow to Omae Mona's chances of ever getting himself back on The Package.

No PACKAGE. No come.

[Tsuru]

What is this bill for anyway?

[Mulboyne]

What is this bill for anyway?

Tax, I would assume. Ripplewood's profits on Shinsei Bank went largely untaxed since most of the investment vehicles were offshore. It would also allow the regulators a closer look at what business is being conducted by investment banks and hedge funds. Although the FT focuses on financial companies, there are a whole range of industries likely to be affected by the change.