Japan Update: What are the principal legal structures used for Alternative Investment Funds?

The principal legal structure used for Alternative Investment Funds is an investment trust formed pursuant to the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951, the “AITIC”) (“Japanese Investment Trust”). Japanese Investment Trusts are formed when a settlor (i.e., manager) enters into a trust agreement with a trustee under which investors acquire divided beneficiary interests in the trust.

Investment corporations formed under the AITIC (“Japanese Investment Corporations”) are vehicles commonly used for investment in real property, which is known as a Japanese real estate investment trust (“J-REIT”).

Collective investment schemes (“CIS”), including limited partnerships (“Japanese Limited Partnerships”) formed pursuant to the Limited Partnership Act for Investment (Act No. 90 of 1998), silent partnerships (tokumei kumiai, or “TKs”) formed pursuant to the Commercial Code (Act No. 48 of 1899), and partnerships (“NKs”) formed pursuant to the Civil Code (Act No. 89 of 1896) are also commonly used.

Foreign Alternative Investment Funds of similar structures (e.g., foreign investment trusts, foreign investment corporations, foreign limited partnerships) may also be offered in Japan.

Certain types of CIS, including TKs and NKs (and similar foreign partnerships), that directly invest in real properties are subject to the Act on Specified Joint Real Estate Ventures (Act No. 77 of 1994). Given the parameters of this document, a description of Alternative Investment Funds has been omitted.

The marketing, management, and disclosure of Alternative Investment Funds are primarily regulated by the Financial Instruments and Exchange Act (Act No. 25 of 1948, the “FIEA”). Investment trusts and investment corporations are also subject to the AITIC.

By Anderson Mori Tomotsune, Japan, a Transatlantic Law International Affiliated Firm. 

For further information or for any assistance please contact japan@transatlanticlaw.com

Disclaimer: Transatlantic Law International Limited is a UK registered limited liability company providing international business and legal solutions through its own resources and the expertise of over 105 affiliated independent law firms in over 95 countries worldwide. This article is for background information only and provided in the context of the applicable law when published and does not constitute legal advice and cannot be relied on as such for any matter. Legal advice may be provided subject to the retention of Transatlantic Law International Limited’s services and its governing terms and conditions of service. Transatlantic Law International Limited, based at 42 Brook Street, London W1K 5DB, United Kingdom, is registered with Companies House, Reg Nr. 361484, with its registered address at 83 Cambridge Street, London SW1V 4PS, United Kingdom