Japan Finalizes Revised FEFTA Regulations, Impacting Foreign Investment Screening in ICT and Sensitive Technologies
Japan has finalized implementing regulations for its revised Foreign Exchange and Foreign Trade Act (FEFTA), which will significantly alter the foreign investment screening regime, particularly for Information and Communications Technology (ICT) investments. The amendments, promulgated on September 16, 2026, and taking effect on February 3, 2027, streamline prior notification requirements for general software and SaaS businesses. However, they introduce a new focus on companies holding specified sensitive technologies, including AI infrastructure software, machine-learning models, and AI support tools. Investments in these areas will now be subject to stringent prior notification screening, even if the business does not fall into traditionally designated sectors. The Ministry of Finance (MOF) has indicated it will publish concrete examples of products and services subject to these new designations.