April 01, 2009

Capital Gain Tax Scrap Bill for Foreign Investors Have Passed

As we reported last December and as was reported in the Nikkei newspaper in January, the bill to scrap capital gains taxes for foreign investors who hold stakes in Japanese companies through Japanese domestic limited partnership was submitted to the Diet. According to a reliable source, the bill was passed, although detailed operating procedures are yet to be finalized.

While there are several conditions for the capital gain tax exemptions, this change will generally allow foreign investors (who do not have business/offices in Japan) to directly invest in Japanese domestic private equity funds without assuming permanent establishment status.

We will keep you posted as we learn more details about this change.
For questions on this matter or on any other matters relating to Japan private equity, please send emails to mail@brightrust.jp. We will do our best to answer your questions.

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