Japan to limit foreign ownership for firms in 12 sectors: Nikkei

Japan‘s government will identify 12 industries for which foreign investors purchasing a stake of 1 percent or more in the Asian nation’s companies will be subject to pre-screening, the Nikkei newspaper reported on Friday.

The 12 industries would include sectors like defence, nuclear power, aerospace, utilities, gas and telecommunications, the paper said without citing sources.

About 400 to 500 listed Japanese companies will fall under this criteria. The government plans to publish the list of the firms in April, the Nikkei said.

Tokyo passed a change in law through Parliament that would tighten reporting requirements for foreign investment in sectors related to national security. The move reflects concern China could gain access to key confidential technology.

The move followed similar steps taken by the United States and Europe in recent years to allow greater scrutiny of ownership in industries deemed as critical to national security.

Under a draft of the changes under consideration, the government will target 12 sectors for which foreign investors must get pre-approval before acquiring a stake of 1 percent or more in a company. The current threshold is 10 percent, the Nikkei said.

To avoid discouraging foreign investors from investing in Japanese stocks, the government will grant exemptions on pre-reporting requirements for overseas investors who meet a set of criteria, the paper said.