Issuing Body: Guozun Cathay Associates, Tokyo Office
Date of Conclusion: 28 August 2026
Key Outcomes: Full-process dual-jurisdiction compliance delivery; completion of RMB 530,000 equity investment outbound remittance and equity delivery in full compliance with regulations; establishment of a regularised service trade fund inbound channel; zero foreign exchange violation risks.
This case was jointly handled by the Tokyo Office of Guozun Cathay Associates and the cross-border investment compliance team of the Beijing Head Office. Strictly abiding by foreign exchange administration, outbound investment and company law regulations of both China and Japan, and relying on Guozun’s global cross-border legal service network and dual-jurisdiction practice qualifications, we provided Chinese individual investors with a full-chain compliance solution from scheme design to final delivery and settlement.
This case has been included in Guozun’s 2026 Typical Case Library for Cross-Border Investment Compliance in Northeast Asia. Its case-handling model – “ODI filing as the foundation, service trade as the supplement, and synchronous delivery across dual jurisdictions” – has been widely applied to scenarios of small-value Sino-Japanese cross-border investment and fund channel establishment.
I. Case Background and Engagement Process
Ms. L, a Chinese investor, intended to invest approximately RMB 530,000 to acquire equity in a Japanese education and technology company. To support subsequent promotion, operations and fund transfer needs, she had established a domestic operating company in Chengdu, which had not yet commenced actual business activities. Due to concerns over the complexity of formal procedures, Ms. L initially planned to remit the investment funds overseas through informal channels, and subsequently arrange for the Japanese company to remit around RMB 50,000 per month as “promotion fees” to the Chengdu company to cover daily expenses. The entire scheme carried obvious compliance risks, including fabricated transaction backgrounds and illegal foreign exchange trading.
On 20 May 2026, Ms. L was referred to the Tokyo Office through the Beijing Head Office of Guozun Cathay Associates. Given that the case involved four core challenges – cross-jurisdictional foreign exchange supervision between China and Japan, outbound investment filing, equity delivery of the Japanese company, and cross-border service trade compliance – the Tokyo Office activated the Sino-Japanese Emergency Collaborative Case Handling Mechanism on the same day, and set up a dedicated case team together with the Beijing Head Office. Two locally licensed Japanese lawyers were responsible for company registration, foreign exchange liaison and document compliance on the Japanese side, while three members of the Beijing Lawyers Association’s foreign-related lawyer talent pool took charge of China-side ODI (Outbound Direct Investment) filing, foreign exchange policy advice and scheme design, undertaking full representation for the full-process compliance restructuring and delivery of this investment.
II. Full Process of Sino-Japanese Joint Case Handling
This case adopted a standardised collaborative model: the Beijing Head Office is responsible for policy compliance and investment path coordination under the Chinese jurisdiction, while the Tokyo Office is responsible for local judicial delivery and fund settlement liaison. All procedural links have written records and verifiable deliverables:
1. 20 May 2026 – 25 May 2026: Dual-Jurisdiction Compliance Risk Assessment
Beijing Head Office: Comprehensively mapped the legal risks of the client’s original scheme, quantified the range of administrative fines for illegal foreign exchange trading and the criminal risk of the crime of illegal business operations, issued the Risk Assessment Report on Cross-Border Investment Schemes under Chinese Law, and explicitly ordered the cessation of the non-compliant operational route.
Tokyo Office: Verified the equity structure, registered capital and operating status of the target education company via the commercial registration system of the Japanese Legal Affairs Bureau, confirmed industry access requirements for foreign equity participation, and simultaneously liaised with the local Japanese depository bank to verify the document checklist for capital injection and equity fund settlement, removing pre-existing obstacles to equity delivery and fund inbound remittance.
2. 26 May 2026 – 15 June 2026: Design of Cross-Border Investment and Foreign Exchange Compliance Scheme
Beijing Head Office: Taking the Chengdu company as the domestic investment entity, and strictly aligning with ODI filing requirements of the National Development and Reform Commission and the Ministry of Commerce, designed a standardised investment path of “domestic company ODI filing → bank foreign exchange registration → compliant foreign exchange purchase and outbound remittance”. It formally issued the Cross-Border Investment and Foreign Exchange Compliance Planning Scheme, clarifying processing timeframes and document checklists for each stage.
Tokyo Office: Simultaneously designed the full equity delivery process on the Japanese side, drafted the share transfer agreement and supporting shareholder change documents under Japanese law, and confirmed the foreign exchange declaration procedure after investment capital entry, ensuring that industrial and commercial change registration could be initiated within 3 working days of fund receipt.
3. 16 June 2026 – 10 July 2026: Cross-Border Service Trade Structure Establishment and Document Signing
Beijing Head Office: Following the foreign exchange administration principle of “genuine transactions under current accounts”, assisted both parties in drafting the Service Agreement for Promotion and Publicity of Education Projects in Greater China, defined service scope, delivery standards and consideration benchmarks, and formulated supporting service traceability specifications (including delivery of work outputs, monthly email reconciliation, and archiving of deliverable screenshots), laying a legal settlement foundation for subsequent monthly fund inflows.
Tokyo Office: Conducted Japanese law compliance review of the service agreement, confirmed that service consideration conformed to fair market standards in Japan, verified declaration requirements and document checklists for service trade foreign exchange payments, and assisted both Chinese and Japanese parties in negotiating and formally executing the Chinese-Japanese bilingual version of the agreement.
4. 11 July 2026 – 2 August 2026: Implementation of ODI Filing and Foreign Exchange Registration
Beijing Head Office: Guided the Chengdu company throughout the submission of ODI filing applications to local development and reform and commerce authorities, followed up review progress and supplemented materials, and successfully obtained the Enterprise Outbound Investment Certificate and NDRC project filing notice. Simultaneously, it assisted the enterprise in completing foreign exchange registration for outbound direct investment at a designated foreign exchange bank, opening up the regulatory channel for foreign exchange purchase and outbound remittance.
Tokyo Office: Simultaneously prepared a full set of Legal Affairs Bureau registration materials for the Japanese company’s equity change, communicated in advance with the competent Legal Affairs Bureau on review points for foreign shareholder changes, and reserved processing time for industrial and commercial alterations, ensuring seamless alignment with the equity delivery process upon fund arrival.
5. 3 August 2026 – 15 August 2026: Investment Fund Outbound Remittance and Equity Delivery
Beijing Head Office: Guided the Chengdu company through foreign exchange purchase procedures for the investment funds, monitored the progress of bank cross-border transfers, confirmed that fund remittance complied with foreign exchange supervision requirements, and retained filing certificates and bank vouchers throughout the process.
Tokyo Office: Upon confirming full receipt of the investment funds equivalent to RMB 530,000 in Japanese yen, completed the update of the target company’s shareholder register and issuance of capital contribution certificates on the same day, and submitted the equity change registration application to the Japanese Legal Affairs Bureau. All industrial and commercial change formalities were completed within 3 working days, formally concluding the equity delivery.
6. 16 August 2026 – 28 August 2026: Service Trade Fund Inbound Remittance and Project Closure
Beijing Head Office: Guided the Chengdu company in collating the first month’s promotion service deliverables, submitted a service trade settlement application to the bank, and successfully completed the settlement and crediting of the first service fee equivalent to RMB 50,000, verifying the feasibility of the regularised fund inbound channel.
Tokyo Office: Assisted the Japanese company in completing foreign exchange payment declaration for service trade to ensure smooth fund remittance. Simultaneously, it delivered the full set of Japanese company equity change registration certificates and compliance document files to the client. The project achieved a full-process compliance closed loop and was successfully concluded.
III. Core Case Handling Difficulties and Authoritative Solutions
The difficulties encountered in this case represent common issues in small-value Sino-Japanese cross-border investment. Drawing on dual-jurisdiction professional expertise and practical experience, the Guozun joint team has developed a replicable, standardised solution framework:
1. Lack of Compliance Pathways for Small-Value Cross-Border Investment and Grey Channel Risks
Professional Basis: Regulations of the People’s Republic of China on Foreign Exchange Administration, Measures for the Administration of Outbound Investment of Enterprises (China); Foreign Exchange and Foreign Trade Act (Japan)
Solution: Reject the misconception that “small amounts do not require filing” and shun non-compliant channels such as underground banks. Adhere to the formal ODI filing route for domestic entities to achieve compliant outbound remittance of capital account items, while aligning with Japanese registration requirements for foreign equity participation. This approach blocks administrative and criminal risks of illegal foreign exchange trading at the source, safeguarding investors’ personal and property safety.
2. Compliance Requirements for Transaction Authenticity in Regular Cross-Border Fund Repatriation
Professional Basis: Guidelines for Foreign Exchange Business under Current Accounts (2020 Edition) (China); provisions on service trade payments under the Foreign Exchange and Foreign Trade Act (Japan)
Solution: Prohibit non-compliant practices such as false invoicing and fabricated trade. Establish substantive cross-border service trade relationships and a full-process service performance traceability mechanism to ensure genuine, verifiable transaction backgrounds and fair, reasonable service consideration. This meets anti-money laundering and settlement review standards of banks in both jurisdictions, enabling regular compliant monthly fund transfers.
3. Effectiveness Alignment and Adaptation of Transaction Documents Across Sino-Japanese Dual Jurisdictions
Professional Basis: Contract Part of the Civil Code of the People’s Republic of China (China); Companies Act, Electronic Signature Act (Japan)
Solution: Adopt Chinese-Japanese bilingual parallel documents, with key clauses adapted to the legal requirements of both jurisdictions: the Chinese side prioritises investment supervision and foreign exchange settlement compliance, while the Japanese side focuses on company registration and foreign exchange payment compliance. Core legal documents undergo simultaneous dual-jurisdiction validity verification to avoid efficacy defects caused by jurisdictional differences, ensuring legality and validity across the entire transaction chain.
IV. Authoritative Legal Bases Applicable to This Case
(I) Chinese Laws
1.Regulations of the People’s Republic of China on Foreign Exchange Administration: Article 12 – Foreign exchange receipts and payments under current accounts shall be based on genuine and lawful transactions; Article 17 – Domestic institutions and domestic individuals shall complete registration in accordance with provisions for outbound direct investment.
2.Measures for the Administration of Outbound Investment of Enterprises (Decree No. 11 of the National Development and Reform Commission): Article 13 – For non-sensitive projects subject to filing administration, the investment entity shall obtain the project filing notice prior to project implementation.
3.Relevant provisions of the Measures for the Administration of Outbound Investment (Ministry of Commerce): Enterprises shall fulfil filing or approval procedures in accordance with provisions for outbound investment, and obtain the Enterprise Outbound Investment Certificate.
4.Guidelines for Foreign Exchange Business under Current Accounts (2020 Edition): Foreign exchange receipts and payments for service trade shall have a genuine and lawful transaction background, and financial institutions shall conduct reasonable review of the authenticity of transaction documents.
(II) Japanese Laws
1.Foreign Exchange and Foreign Trade Act of Japan: Provisions on the declaration and supervision of capital injection by foreign investors and foreign exchange payments for service trade.
2.Companies Act of Japan: Provisions on equity transfer of limited liability companies, registration of shareholder changes, and issuance of capital contribution certificates.
3.Electronic Signature Act of Japan: Electronic signature documents meeting statutory conditions have the same legal effect as written documents.
V. Authoritative Practical Recommendations Based on Case Experience
Drawing on years of Sino-Japanese cross-border investment compliance service experience of Guozun Tokyo Office, the following three authoritative recommendations are put forward for Chinese individuals and small and medium-sized enterprises investing in Japan:
1.Prioritise compliance of investment pathways: Regardless of investment amount, all outbound equity investment shall complete capital account outbound remittance through formal ODI filing. Never transfer funds in violation of regulations via underground banks, individual splitting, fabricated trade or other means, to avoid incurring substantial administrative fines and even criminal liability.
2.Plan fund requirements in advance: If there is subsequent demand for regular fund repatriation such as service fees and dividends, the corresponding transaction structure shall be designed concurrently at the initial investment stage. Establish a genuine business background and retain complete performance vouchers in advance, to avoid compliance risks arising from ad-hoc operations at a later stage.
3.Engage dual-jurisdiction professionals early: Sino-Japanese cross-border investment involves divergent regulatory rules between the two countries. It is recommended to retain a legal team with Sino-Japanese dual-jurisdiction service capabilities at the project preparation stage, to design schemes and advance processes in parallel, significantly improving delivery efficiency and avoiding compliance blind spots.