Japanese Prime Minister Shinzo Abe. (Photo: Franck Robichon / Pool via Reuters)

Limitation of Foreign Capital Ownership in Technology Companies, What's with The New Regulation in Japan?

Japan - It is reported that Japan has a new plan and rule to limit foreign capital ownership in technology companies. This new rule is effective starting from 1 August and the restriction is carried out after the high-tech sector is included in the list of businesses protected by the government. However, the Japanese government did not explicitly mention which countries or companies will be affected by the restrictions on foreign ownership.

Japanese Ministry said in a statement in Reuters that, after seeing the importance of ensuring cyber security in recent years, they have decided to take the necessary steps, including the addition of integrated manufacturing, to prevent an appropriate situation that will greatly affect Japan's national security from now and in the future.

This rule is referred to as Japan's efforts to prevent potential technological leaks that could potentially threaten national security. The Ministry of Finance, Ministry of Commerce, and the Ministry of Communication said the new regulation will also target 20 sectors in the information and telecommunications industry.

This announcement was revealed along with a meeting between US President Donald Trump and Japanese Prime Minister Shinzo Abe in Tokyo. During the meeting, both discussed the topic of global trade and other important issues.

However, the plan for this restriction was announced along with the increased US pressure related to cyber security risk issues involving Chinese technology companies (including Huawei).