In principle, a corporate reorganization is qualified for tax purposes if assets other than the shares of the company in settlement, etc., are not allocated in return: although there is no special regime for corporate restructurings, the transfer of assets for less than its market value is not prohibited by law. However, where the assets are transferred for a value lower than their market value, the manager(s) of the transferring company may without reason breach their duty of care and loyalty. In addition, the transferring company may be subject to corporation tax on the difference between the market value and the book value, since assets of its market value are considered to be transferred when they are transferred from one company to another. The third point to consider is the amendment that allows a merger or exchange of shares to be fiscally qualified, even if (i) assets other than the shares of the denied company or the 100% subsidiary are allocated to the shareholders; (ii) two-thirds or more of the shares of the denied company or of the company that becomes a 100% subsidiary; by the surviving company or.dem sole owner, (iii) prior to the reorganization of the corporation and (iv) as long as other conditions are met for the tax-qualified merger or share exchange. One of the frequently asked questions is, among other things, whether it is possible for an entity with negative assets to participate in a merger as a resolving entity. Although there are no clear provisions or control views on this issue, it is generally considered to be legally possible. There is no official data to provide the number of corporate restructurings in Japan. However, depending on the number of merger and division company registrations requested for this year and last year, the number of these types of corporate restructurings does not appear to have changed significantly. We therefore understand that the number of corporate restructurings in Japan has not changed significantly compared to last year until this year. FETA regulates investments by a foreign or non-resident enterprise in a Japanese resident enterprise or enterprise.

Among other things, the reports of a foreign investor must be submitted to the relevant ministers on the Bank of Japan when corporate restructurings involve the acquisition of shares in a Japanese company (for example.B. acquisition of shares by exchange of shares between a Japanese subsidiary of a foreign company and a Japanese company). . . .