Japan joins US to restrict foreign ownership of tech firms

KKR-japan

Japan has just mimicked the United States in restricting foreigners from owning technology companies in the country.

Japan’s finance ministry, trade ministry and communications ministry said in a joint statement that the decision was:

“Based on increasing importance of ensuring cyber security in recent years, we decided to take necessary steps, including addition of integrated circuit manufacturing, from the standpoint of preventing as appropriate a situation that will severely affect Japan’s national security.”

Analysts who spoke to Reuters claimed that Japan wants to prevent a leakage of technology deemed important for national security or damage to defense output and technological foundation, they added.

The new rule will affect about to sectors in information and communications industries.

Under the foreign exchange and foreign trade control law, Japan brings certain industries such as airplanes, nuclear-related sectors and arms manufacturing under foreign capital controls.

The law requires foreign investors to report to the Japanese government and undergo inspection in case they buy 10% or more of stocks in listed Japanese companies or acquire shares of unlisted firms.

It would be recalled that President Donald Trump signed an executive order earlier this year that restrict foreign companies from acquiring and owning indigenous technology firms.

Technology analysts said the move is an affront target at China given the Chinese tech giants’ ramp up to acquire semiconductor companies in the US which was blocked.

The US recently banned Huawei from doing business in the US and as well with American tech companies.

Huawei’s founder said he will not support a tit-for-tat approach to respond to America’s trade ban on the company and by extension, China.