Hello, this is Hamamoto from TIMEWELL.
Every company has a representative listed in its registry and shareholders lined up in its share ledger. But who really runs the company is sometimes impossible to tell from a glance at the surface of the paperwork. It is not unusual for a representative who merely lent their name to stand out front while a different person holds the voting rights behind the curtain. In a puppet show, you want to know not the puppet moving on stage, but the person pulling the strings behind the curtain. The "person pulling the strings" is what we call the beneficial owner. In English the term is Beneficial Owner, often shortened to BO.
On June 26, 2026, the Yomiuri Shimbun reported that the government is considering a new law that would require every corporation to file this beneficial owner information[^yomiuri][^docomo]. The stated aims are countering money laundering (the act of obscuring the origin of money obtained through crime) and strengthening economic security. If you read only the headline, it sounds as if "filing has become mandatory." But from what I have been able to confirm, the law has not yet been enacted, and no bill has even been submitted to the Diet. We are at the stage where the government has firmed up a policy direction and is aiming, at the earliest, to submit a bill to the extraordinary Diet session in the autumn of 2026. I want to share this sense of where things stand at the outset. Please read this not as an explanation of a settled system, but as a way of sorting through a story that may only now be starting to move. Writing about unsettled parts as if they were certain would, if anything, lead to mistaken preparations.
Today's "beneficial owner list system" is voluntary
Before turning to the new law, let me cover the mechanism that already exists. Since January 31, 2022, Japan has had a "beneficial owner list system" in operation[^moj116]. When a joint-stock company applies on its own initiative, a registrar at the commercial registry office (the Legal Affairs Bureau window that handles corporate registration) checks the contents of the submitted beneficial owner list against supporting documents, keeps it on file, and issues a copy bearing a certification statement. When opening a bank account and in similar situations, the company can use that copy as an official endorsement that "this is our beneficial owner." There is no fee.
What matters here is that the system is entirely voluntary. The Ministry of Justice explicitly states that it "issues a copy of the beneficial owner list based on a voluntary application" and that "whether to apply is also voluntary"[^moj116]. In other words, it is a mechanism in which companies that want to file do so; it is not imposed on every company. The scope is also limited to domestic joint-stock companies (including special limited companies), and foreign companies, general incorporated associations and foundations, NPOs, and the like are not included[^moj119].
So who counts as a beneficial owner? In the Ministry of Justice's framing, the first candidate is a natural person who directly or indirectly holds more than 50% of the company's voting rights. Where no such person exists, a natural person holding more than 25% of the voting rights becomes a candidate[^moj119]. The key point is that you trace all the way back to a flesh-and-blood human being (a natural person). For example, if 100% of one company's shares are held by another company, and one individual holds the bulk of that holding company's shares, then that individual is the beneficial owner. Even when the shareholder is a company, you do not stop there; you follow the chain to the human at the end. Japan's anti-money-laundering framework has rested on roughly three pillars: this voluntary list system, a mechanism by which financial institutions verify the beneficial owner when opening accounts or conducting transactions, and a mechanism by which notaries (legal professionals who officially attest to contracts and articles of incorporation) verify it during the certification of articles at company formation[^mof][^koshonin]. The new law is reported to head toward elevating the list system, which remains voluntary, into an obligation. As long as it stays voluntary, the very companies that most want to hide will not apply.
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What the reporting confirms, and what remains unclear
Let me line up the substance of the reporting, dividing it into the parts that are solid and the parts that are still vague. According to the Yomiuri report, the entity creating the new law is the government, and the purpose is to strengthen anti-money-laundering and economic-security measures. The information to be filed is the beneficial owner of a corporation, and the scope is said to cover all corporations, including unlisted ones[^yomiuri]. The filing destination is described as "a public institution such as the Legal Affairs Bureau," which is still a wide-open phrasing. On top of that, the reported direction is to build a mechanism that lets investigative authorities and relevant ministries make rapid inquiries. The image is one of keeping the question of who controls a company in a state where authorities can pull it up immediately whenever they need to.
On penalties, it is reported that the government is also considering establishing penalties for false filings[^yomiuri]. Because this is only at the consideration stage, we should read it as undecided whether it would become a criminal penalty or stay at the level of an administrative sanction, and what the content would be. Even if filing is made mandatory, it is meaningless if false content is submitted, so how to design deterrence against falsehoods will be the crux of the system. That said, there is not yet enough material to write about this point definitively. As for timing, the government is said to be aiming, at the earliest, to submit a bill to the extraordinary Diet session in the autumn of 2026. It is not as if submission to the autumn session is settled; we should note that the reporting stays at the level of "aiming to." As an international comparison, the report introduces the point that G7 countries such as the United Kingdom and Germany require corporations to create a register of beneficial owners and register it with a government agency, and that Japan is the only G7 country yet to put such a framework in place[^yomiuri]. But this is the Yomiuri report's phrasing, and I have not been able to cross-check the details of each country's system against primary sources myself. As for foreign systems, it is safer to read them as an introduction by way of the reporting.
Conversely, there is much that remains unclear. The official name of the new law, which ministry would oversee it, and the outline of the bill are all matters for which I have been unable to confirm any official announcement at this point. Where the filing destination ends up is also undecided: whether it would extend the existing list system and be filed with the commercial registry office, or whether a separate new register would be created. The content of the penalties also remains at the consideration stage. As for the timing of the next FATF evaluation (explained below), the Yomiuri reports "around the summer of 2028," but for the precise schedule we need to wait for the confirmed timetable from the government and FATF. Do not get ahead of ourselves and assume it has been made mandatory or enacted. What the reporting has firmed up reaches only as far as "the government has decided on a policy of making it mandatory and is aiming to submit a bill in the autumn." That line is the single most important thing this time.
Without knowing the beneficial owner, you cannot uphold sanctions or export control
Why is economic security cited as a reason alongside money laundering? This is the part that is by no means someone else's problem for companies involved in exports and trade. On the front line of economic sanctions and end-user screening (the work of confirming that the party who will ultimately use the product or technology is not a sanctioned or otherwise concerning entity), whether you can correctly discern who the counterparty's "face" really is becomes the starting point for everything.
Suppose, for example, that the name of a counterparty company itself does not appear on any sanctions list. On paper, it looks clean. But what if a sanctioned individual or company held the bulk of that company's voting rights? If you do business looking only at the sign out front, you could in substance be handing goods to a sanctioned party. US regulations include the concept of the "50% rule," under which a company owned 50% or more, directly or indirectly in the aggregate, by sanctioned persons is itself treated as a sanctions target even if the company is not directly named on a list[^ofac]. Slipping in a newly created company to hide one's identity is a textbook technique for evading sanctions, and if you check only the company name, you cannot see behind that single layer. In other words, unless you know who ultimately controls the company, you cannot see through the "front company" prepared to evade sanctions. Export-control violations can occur not only with malicious companies but also in the form of conscientious companies being dragged in because they could not fully verify the counterparty's identity. That is the frightening part. Grasping the beneficial owner is, at the same time as being an anti-money-laundering measure, also the foundation of economic security. I understand the new law's setting out of two purposes side by side as a sign that at root it addresses the same question.
TRAFEED, which we at TIMEWELL are developing, is precisely an AI agent that supports this counterparty screening and classification assessment (determining whether the product or technology being exported falls under a regulated list), as well as the practical work of economic security. It cross-checks counterparties and end users against watchlists, judges applicability to regulations, and keeps up with the rules of each country as they change moment to moment. Verifying a counterparty's identity all the way down to the beneficial owner is a domain that is becoming harder year by year to cover with human effort alone, and the aim is to supplement that with AI. On how to shore up the footing of export control, I think reading my earlier piece on corporate export-control practice alongside this one will give you a picture of classification assessment and screening as a whole. If you are wrestling with how to build the beneficial-owner perspective into your own counterparty screening, please take a look at what TRAFEED offers.
Why is it heading toward an obligation? The FATF homework and Tokuryu
Behind the debate over making it mandatory lies international pressure. The FATF (Financial Action Task Force) is, in effect, an international "watchdog" organization that evaluates each country's efforts on anti-money-laundering and counter-terrorism-financing measures. The FATF periodically conducts mutual evaluations of its member countries, and those assessments are directly tied to the credibility of each country's financial system. As for Japan, the report of the fourth-round mutual evaluation was published on August 30, 2021[^fsa]. In that evaluation, Japan was placed in the category of "enhanced follow-up" countries requiring continued improvement[^followup].
In the evaluation, the item "Recommendation 24," which deals with the transparency of corporate beneficial owners, initially received the rather harsh rating of "partially compliant." In subsequent follow-up, the introduction of the beneficial owner list system that began in January 2022 and ongoing customer due diligence by financial institutions were credited, and the rating is said to have been upgraded to "largely compliant"[^mojr24][^pwc]. However, we should understand that this was credited as an alternative means, not as a comprehensive registration system itself. It is not as if Japan reached a system that, like those of the UK and Germany, requires every corporation to register. Japan is reported to face its next FATF evaluation around 2028[^yomiuri], and the sense of crisis that a downgrade there could lead to a loss of credibility for Japanese financial institutions and a chilling of overseas transactions is helping to push the move toward an obligation. In fact, in 2021 the government established a policy council on these measures, co-chaired by the National Police Agency and the Ministry of Finance, and a new action plan running from fiscal 2024 is also under way[^mof].
Another part of the backdrop is the domestic crime situation. The National Police Agency calls criminal groups that lack a clear organizational structure and that come together and split apart through anonymous interactions "anonymous, fluid-type criminal groups," commonly known as Tokuryu[^npa]. Such groups are reported to sometimes use shell corporations as a "front" to obscure the flow of funds. When a town is filled with companies whose controllers are unknown, tracing criminal funds becomes difficult. It is the same as how, in a town full of vacant houses, you cannot grasp who lives where. That is precisely why the thinking connects to wanting every corporation to declare its beneficial owner and to keep that information in a state where investigative authorities can inquire at any time. We can frame it as the international homework of anti-money-laundering measures and the domestic reality of Tokuryu overlapping in the same direction of "making the true face of companies visible."
A "separate story" that is easy to confuse, and what companies can do now
Finally, let me touch on a point that is easy to mistake as you follow the news. Right now, the Legislative Council (an advisory body to the Minister of Justice) is also discussing a mechanism to grasp "substantial shareholders" by amending the Companies Act, for example a proposal to impose a notification obligation on institutional investors that acquire shares[^nikkei]. Because the names are so similar, it is easy to mix the two up, but this is a separate system aimed at corporate governance (the framework for keeping the relationship between shareholders and management sound). It differs in both purpose and responsible body from this time's mandatory beneficial-owner filing aimed at anti-money-laundering and economic security. The reporting treats it as a separate matter as well, so please be careful not to understand the two as one story. I, too, keep these two cleanly separated as different things.
So, with no bill yet submitted, what should companies be doing now? In my view, without even waiting for the law, the first step is to accurately grasp who your own beneficial owner is and to organize it as documentation. The more complexly group companies invest in one another, the more often tracing the voting rights leads to an unexpected individual. In addition, building the perspective of "who is the counterparty's beneficial owner" into your counterparty screening means that, when an obligation does arrive, you will not be caught scrambling, and you will be able to detect a sanctions-evasion front at an early stage. Given that reports suggest the new law's scope may cover all corporations, including unlisted ones, I think it is reasonable to keep in mind that this looks likely to be relevant regardless of company size.
You may have time to wait for the substance of the system to firm up, but preparing to raise the precision of your day-to-day counterparty screening is something you can start on now. If you want to work out concretely how to weave the beneficial-owner perspective into your counterparty screening and end-user screening, and how to rewrite your internal assessment flow and verification documents, please reach out via an individual consultation. Rather than scrambling to respond after the news starts moving, getting the issues in hand first lets you, in the end, take a calmer stance.
References
[^moj119]: Beneficial owner list system Q&A — Ministry of Justice — retrieved June 29, 2026