JAPAN Law and Practice Contributed by: Hiroki Aoyama, Yuki Matsuda and Shuhei Takaishi, Mori Hamada
8.7 Natural Resources Mining natural resources such as oil, natural gas and minerals may be subject to a licence requirement under the Mining Act and other relevant regulations. The export of natural resources is not subject to any special restrictions under the Foreign Exchange and Foreign Trade Act. Under the Foreign Exchange and Foreign Trade Act, a prior notification to the government should be filed with respect to any foreign investment in a Japanese company that is engaged in the operation of certain types of infrastructure, such as electricity generation. There is a 30-day waiting period from the date of the receipt of the notification, which may be shortened to two weeks in the absence of any substantial issues. During this period, the government will review the proposed investment, taking national security, public order and public safety into consideration. 8.8 Environmental, Health and Safety Laws The basic environmental policy of Japan is set out under the Basic Environment Act. There are also vari- ous additional environmental, health and safety laws, such as the Air Pollution Control Act, the Water Pol- lution Control Act, the Soil Contamination Counter- measures Act, the Noise Regulation Act, the Vibration Regulation Act, the Industrial Water Act, the Offensive Odour Control Act, the Waste Management and Public Cleaning Act, and the Environment Impact Assess- ment Act. Most of these Acts are administered by the Ministry of Health, Labour and Welfare, and the Ministry of Land, Infrastructure, Transport and Tourism.
including electricity, gas, oil, telecommunications, water supply, and transportation, the foreign investor is required to make a filing 30 days prior to the invest- ment. In response to the filing, the government may order a suspension of, or change to, the investment if it is perceived as a threat to national security. Also, there are some specific industries where there is an upper limit to foreign ownership, such as aviation and telecommunications. Such restrictions may be obsta- cles to foreign lenders acquiring pledged shares by virtue of the exercise of security interest. To use river water, permission must be obtained from the central or local government under the River Act. Permission can be obtained by a foreign entity. 8.5 Structuring Deals The most common legal forms of a project company are stock corporations ( kabushiki kaisha ) and limited liability companies ( godo kaisha ). A stock corporation is the most general form of corporation, and a limited liability company is a more summary form. If the lender provides the project company with a commitment line and would like to rely on the exemp- tion under the Commitment Line Act (see 3.10 Usury Laws ), the project company cannot be a limited liabil- ity company. There are no material restrictions on foreign investment in a stock corporation or a limited liability company, other than notification under the Foreign Exchange and Foreign Trade Act. 8.6 Common Financing Sources and Typical Structures Bank facilities are the major sources of financing for domestic projects.
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