JAPAN Law and Practice Contributed by: Akira Matsushita, Norihito Sato, Hideki Ben and Nobuhiko Suzuki, Mori Hamada
Mori Hamada & Matsumoto 16th Floor, Marunouchi Park Building 2-6-1 Marunouchi, Chiyoda-ku Tokyo 100-8222 Japan
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1. Market Conditions 1.1 Geopolitical and Economic Factors There has been no particular trend worth noting in 2025 or expected in 2026 with respect to joint ven - tures (JVs). Generally speaking, JVs are used in many situations in Japan, when parties wish to combine their resources – such as technology, market access, distribution channels, production capability, human resources and financing resources. In particular, JVs tend to be used where: • the other party’s technology is necessary for the business due to the development of new products or services; • heavy capital expenditure is required for the busi - ness; or • a foreign company expands its business into Japan. The authors have not seen any specific impact of recent geopolitical and economic events – such as inflation, interest rate fluctuations, wars in Ukraine and the Middle East, geopolitical challenges and US foreign policies (including tariffs) – on JV activities in Japan. 1.2 Industry Trends and Emerging Technologies No specific industry or sector has been more active than others with respect to JVs in Japan. Emerging technologies and related regulations – particularly concerning artificial intelligence, intellectual property, data sharing, storage and usage, and liability for new technologies – do not affect JV vehicles in Japan.
2. JV Structure and Strategy 2.1 Typical JV Structures
JVs are not a distinct legal concept under Japanese law, and are generally recognised as a business ven - ture established for a specific purpose by two or more independent parties. Typically, a corporation – espe - cially a stock company ( kabusihiki-kaisha ) or a limited liability company ( godo-kaisha ) – is used for JVs in Japan. JVs can also be implemented through contrac - tual arrangements, such as a partnership or a busi - ness alliance agreement, in certain situations. The key advantage of corporate JVs is the limited liability of the JV partners. In corporate JVs, the JV entities are, in principle, managed independently from the JV partners and can own their own assets, rights and liabilities. Taxes are imposed on the JV entities in the case of corporate JVs; whereas in contractual JVs the taxes are imposed on the JV partners. 2.2 Strategic Drivers for JV Structuring In Japan, a stock company ( kabushiki-kaisha ) is most commonly used as the JV vehicle. As discussed in 2.1 Typical JV Structures , a stock company has advan - tages in terms of limited liability and independence. If a stock company is used, the JV parties can utilise (without setting out detailed rules in the articles of incorporation (AoI) or JV agreements) the default rules under the Companies Act (CA), which many business people are familiar with since a stock company is the most popular form of corporation in Japan. If a corporation (stock company or limited liability company) is used, all gains and losses are attributed
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