Issuing Body: Guozun Cathay Associates Japan Office
Date of Conclusion: 28 August 2026
Key Outcomes: Full-process compliance delivery across dual jurisdictions; compliant outbound remittance of RMB 530,000 equity investment funds and completion of equity delivery; establishment of a regular inbound channel for service trade funds; zero risk of foreign exchange violations
This case was jointly handled by the Japan Office of Guozun Cathay Associates and the cross-border investment compliance team of the Beijing Head Office. In strict compliance with foreign exchange administration, overseas investment and corporate law regulations of both China and Japan, and leveraging Guozun Cathay Associates’ global cross-border legal service network and dual-jurisdiction practice qualifications, the team provided Chinese individual investors with a full-chain compliance solution from scheme design to implementation and settlement.
This case has been selected for inclusion in Guozun Cathay Associates’ 2026 Library of Typical Cross-Border Investment Compliance Cases in Northeast Asia. Its case-handling model of “ODI record-filing as the foundation, service trade as the complement, and simultaneous implementation across both jurisdictions” has been widely applied to scenarios of small-scale Sino-Japanese cross-border investment and capital channel establishment.
I. Case Background and Retainer Process
Ms. L, a Chinese investor, intended to invest approximately RMB 530,000 to acquire equity in a Japanese education technology company. To support subsequent promotion, operation and capital transactions, she had incorporated a domestic operating company in Chengdu, which had not yet commenced actual business operations. Due to concerns over the complexity of formal procedures, Ms. L initially planned to transfer the investment funds abroad through informal channels, and proposed that the Japanese company would remit approximately RMB 50,000 in “promotion expenses” to the Chengdu company on a monthly basis to cover daily expenditure. The entire arrangement carried obvious compliance risks, including fictitious transaction background and illegal foreign exchange trading.
On 20 May 2026, Ms. L was referred to the Japan Office via the Beijing Head Office of Guozun Cathay Associates. Given that the case involved four core challenges – Sino-Japanese dual-jurisdiction foreign exchange supervision, overseas investment record-filing, equity delivery of the Japanese company, and cross-border service trade compliance – the Japan Office activated the Sino-Japanese Emergency Collaborative Case Handling Mechanism on the same day, and established a dedicated case team together with the Beijing Head Office. Two local practising lawyers in Japan were responsible for company registration, foreign exchange liaison and document compliance at the Japanese end, while three members of the Foreign-Related Lawyer Talent Pool of the Beijing Lawyers Association took charge of China-end ODI record-filing, foreign exchange policy advice and scheme design, acting as the exclusive representative for the full-process compliance restructuring and implementation of this investment.
II. Full Procedure of Sino-Japanese Collaborative Case Handling
This case adopts the standardised collaborative model whereby “the Beijing Head Office oversees policy compliance and investment path coordination under Chinese jurisdiction, while the Japan Office manages local judicial implementation and capital settlement liaison”. All stages are documented in writing with verifiable deliverables:
1.20 May – 25 May 2026: Dual-Jurisdiction Compliance Risk Assessment
a.Beijing Head Office: Comprehensively identified the legal risks of the client’s original plan, quantified the scope of administrative penalties for illegal foreign exchange trading and the criminal liability for the offence of illegal business operation, issued the Risk Assessment Report on Cross-Border Investment Schemes under Chinese Law, and explicitly ordered the cessation of the non-compliant operation route.
b. Japan Office: Verified the equity structure, registered capital and operating status of the target education company through the commercial registration system of the Japanese Legal Affairs Bureau, confirmed industry access requirements for foreign equity participation, and simultaneously liaised with local Japanese correspondent banks to verify the document checklist for capital inflow and equity fund settlement, removing pre-existing obstacles to equity delivery and capital inflow.
2.26 May – 15 June 2026: Design of Cross-Border Investment and Foreign Exchange Compliance Scheme
a. Beijing Head Office: Taking the Chengdu company as the domestic investment entity, and in strict alignment with ODI (Overseas Direct Investment) record-filing requirements of the National Development and Reform Commission and the Ministry of Commerce, designed a standardised investment path of “domestic company ODI record-filing → bank foreign exchange registration → compliant foreign exchange purchase and outward remittance”, and formally issued the Cross-Border Investment and Foreign Exchange Compliance Plan, specifying the processing time limits and document checklists for each stage.
b. Japan Office: Simultaneously designed the full procedure for Japanese-end equity delivery, drafted the equity transfer agreement and supporting documents for shareholder amendment under Japanese law, confirmed the foreign exchange declaration procedure after the inflow of investment capital, and ensured that commercial change registration could be initiated within 3 working days after the funds are received.
3.16 June – 10 July 2026: Establishment of Cross-Border Service Trade Structure and Document Signing
a.Beijing Head Office: In accordance with the foreign exchange administration principle of “genuine transactions for current account items”, assisted both parties in drafting the Greater China Education Project Promotion and Distribution Service Agreement, defining service scope, delivery standards and consideration criteria, and formulated supporting service traceability specifications (including delivery of work deliverables, monthly email reconciliation, and archiving of deliverable screenshots), laying a legal foundation for foreign exchange settlement for subsequent monthly capital inflows.
b. Japan Office: Conducted compliance review of the service agreement under Japanese law, confirmed that the service consideration conformed to fair market standards in Japan, verified the declaration requirements and document checklist for foreign exchange payment in service trade, and assisted both Chinese and Japanese parties in negotiating and formally signing the bilingual (Chinese-Japanese) version of the agreement.
4.11 July – 2 August 2026: Implementation of ODI Record-Filing and Foreign Exchange Registration
a.Beijing Head Office: Provided full guidance to the Chengdu company in submitting ODI record-filing applications to local development and reform authorities and commerce departments, followed up on the review progress and supplemented materials as required, and successfully obtained the Enterprise Overseas Investment Certificate and the NDRC project record-filing notice. Simultaneously, assisted the enterprise in completing foreign exchange registration for overseas direct investment at designated foreign exchange banks, opening up the regulatory channel for foreign exchange purchase and outward remittance.
b. Japan Office: Simultaneously prepared the full set of registration documents for equity change of the Japanese company with the Legal Affairs Bureau, communicated in advance with the competent Legal Affairs Bureau on the review points for foreign shareholder changes, and reserved the processing period for commercial change registration to ensure seamless connection with the equity delivery process upon receipt of funds.
5.3 August – 15 August 2026: Outward Remittance of Investment Funds and Equity Delivery
a.Beijing Head Office: Guided the Chengdu company in completing the foreign exchange purchase procedures for the investment funds, followed up on the progress of bank cross-border transfer, confirmed that the outward remittance of funds complied with foreign exchange regulatory requirements, and retained the full set of record-filing vouchers and bank documents throughout the process.
b. Japan Office: Upon confirming the 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 commercial change procedures were completed within 3 working days, formally concluding the equity delivery.
6.16 August – 28 August 2026: Inbound Remittance of Service Trade Funds and Project Closure
a.Beijing Head Office: Guided the Chengdu company in collating materials for the first month’s promotion service deliverables, submitted a service trade foreign exchange settlement application to the bank, and successfully completed the settlement and inward remittance of the first service fee equivalent to RMB 50,000, verifying the feasibility of the regular capital inflow channel.
b. Japan Office: Assisted the Japanese company in completing the foreign exchange payment declaration for service trade to ensure smooth outward remittance of funds. Simultaneously, delivered the full set of equity change registration certificates and compliance document files of the Japanese company to the client. The project achieved a full-process compliance closed loop and was successfully concluded.
III. Key Case Handling Difficulties and Authoritative Solutions
The difficulties encountered in this case are common issues in small-scale Sino-Japanese cross-border investment. Relying on dual-jurisdiction professional expertise and practical experience, the Guozun joint team has developed a replicable standardised solution:
1.Lack of Compliance Pathways and Grey Channel Risks for Small-Scale Cross-Border Investment
a.Professional Basis: Regulations of the People’s Republic of China on Foreign Exchange Administration, Measures for the Administration of Overseas Investment of Enterprises, and Japan’s Foreign Exchange and Foreign Trade Act.
b. Solution: Reject the misconception that “small amounts do not require record-filing” and avoid illegal channels such as underground banks. Adhere to the formal ODI record-filing route through domestic entities to achieve compliant outbound remittance of capital account items, and simultaneously align with the registration requirements for foreign equity participation at the Japanese end. This blocks administrative and criminal risks of illegal foreign exchange trading from the source, and protects investors’ personal and property safety.
2.Compliance Requirements for Transaction Authenticity of Regular Cross-Border Capital Repatriation
a.Professional Basis: Guidelines for Foreign Exchange Business in Current Account Items (2020 Edition) of China, and provisions related to service trade payment under Japan’s Foreign Exchange and Foreign Trade Act.
b. Solution: Reject illegal practices such as false invoicing and fictitious trade. Establish a substantive cross-border service trade relationship and a full-process service performance traceability mechanism, to ensure that the transaction background is genuine and verifiable, and the service consideration is fair and reasonable. This meets the anti-money laundering and foreign exchange settlement review standards of banks in both China and Japan, and realises regular and compliant monthly transfer of funds.
3.Effectiveness Connection and Adaptation of Transaction Documents Across Sino-Japanese Dual Jurisdictions
a.Professional Basis: The Contract Book of the Civil Code of the People’s Republic of China, Japan’s Companies Act and Electronic Signature Act.
b. Solution: Adopt bilingual (Chinese-Japanese) version of documents, with key clauses adapted to the legal requirements of both jurisdictions: the Chinese end focuses on investment supervision and foreign exchange settlement compliance, while the Japanese end focuses on company registration and foreign exchange payment compliance. Core legal documents undergo dual-jurisdiction validity verification simultaneously, to avoid validity defects due to jurisdictional differences and ensure the legality and validity of the entire transaction chain.
IV. Applicable Authoritative Legal Basis for This Case
A. Chinese Laws
1.Regulations of the People’s Republic of China on Foreign Exchange Administration: Article 12 – Foreign exchange receipts and payments under current account items shall have a genuine and lawful transaction basis; Article 17 – Domestic institutions and individuals shall register in accordance with provisions when making direct overseas investment.
2.Measures for the Administration of Overseas Investment of Enterprises (Decree No. 11 of the National Development and Reform Commission): Article 13 – For non-sensitive projects subject to record-filing administration, the investment entity shall obtain the project record-filing notice prior to project implementation.
3.Relevant provisions of the Measures for the Administration of Overseas Investment (Ministry of Commerce): Enterprises shall perform record-filing or approval procedures for overseas investment in accordance with provisions and obtain the Enterprise Overseas Investment Certificate.
4.Guidelines for Foreign Exchange Business in Current Account Items (2020 Edition): Foreign exchange receipts and payments in service trade shall have a genuine and lawful transaction background, and financial institutions shall conduct reasonable review of the authenticity of transaction documents.
B. Japanese Laws
1.Japan’s Foreign Exchange and Foreign Trade Act: Provisions related to declaration and supervision of foreign investors’ capital inflow and foreign exchange payment in service trade.
2.Japan’s Companies Act: Provisions related to equity transfer of limited liability companies, shareholder change registration, and issuance of capital contribution certificates.
3.Japan’s Electronic Signature Act: Electronic signature documents meeting statutory conditions have the same legal effect as written documents.
V. Authoritative Practical Recommendations Based on Case Experience
Combined with years of experience in Sino-Japanese cross-border investment compliance services of Guozun Cathay Associates Japan 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 routes: Regardless of the investment amount, overseas equity investment shall complete capital account outbound remittance through formal ODI record-filing. Do not transfer funds in violation of regulations through underground banks, individual split transfers, fictitious trade or other methods, to avoid triggering huge administrative fines or even criminal liability.
2.Plan capital requirements in advance: If there is subsequent demand for regular capital repatriation such as service fees and dividends, the corresponding transaction structure shall be designed synchronously at the initial stage of investment, with a genuine business background established in advance and complete performance vouchers retained, to avoid compliance risks caused by ad-hoc operations later.
3.Engage dual-jurisdiction professionals at an early stage: Sino-Japanese cross-border investment involves differences in regulatory rules between the two countries. It is recommended to engage a legal team with Sino-Japanese dual-jurisdiction service capacity at the project preparation stage, to design schemes and advance processes simultaneously, so as to significantly improve implementation efficiency and avoid compliance blind spots.