Are there any legal restrictions on foreign investors acquiring real estate?
There are no discrepancies between the legal restrictions applicable to foreign investors and those applicable to domestic investors other than the followings.
Under the Foreign Exchange and Foreign Trade Act, a foreign (non-Japan resident) investor who purchases real estate from a Japan resident seller for profit must report the purchase to the Bank of Japan within 20 days of the purchase.
Under the Act on the Review and Regulation of the Use of Real Estate Surrounding Important Facilities and on Remote Territorial Islands, the authority may designate certain areas surrounding important facilities or on remote territorial islands that need to be monitored for national security purposes as ‘Monitored Areas’ (chushi-kuiki) or ‘Special Monitored Areas’ (tokubetsu-chushi-kuiki). If real estate is located in the Monitored Areas, the authority may (i) investigate the use status of such real estate, (ii) require the relevant local authority to provide information relating to such real estate (eg the names of the user, and the like (User, etc.) of such real estate), (iii) require the User, etc, to provide reports and materials with regard to the use of such real estate and (iv) if there is an apparent potential for such real estate being used to interfere with the functions of defence facilities, remote islands (such as to define any border of Japan), or the like, prohibit the use of such real estate or order other necessary measures. If real estate is located in the Special Monitored Areas, in addition to the authority’s rights relating to the Monitored Areas above, any investor intending to acquire such real estate is required to prior to the acquisition, notify the authority of its name and address, the purpose of the acquisition and any other matters specified in the relevant ordinances.