You can see the rules and regulations in other jurisdictions.
Moneylending and intermediary services must be registered as moneylending businesses, as described in Section IV. Loan-type crowdfunding (crowd-lending or peer-to-peer lending) must also be registered as a moneylending business.1
Unlike banks and fund transfer service providers, issuers of prepaid payment instruments, which are widely used for small settlements, are not subject to KYC or reporting suspicious transactions under Japanese AML laws because they generally do not repay cash to their customers. The amount of prepaid payment instruments that can be issued to each user under the PSA is also not limited.1
A mortgage, like a factory foundation mortgage (teitouken), is a legal agreement where one party uses property as collateral to secure a loan from another party. In renewable energy projects, this often involves using land and surface rights as collateral. For power generation, a factory foundation mortgage specifically uses land rights and power facilities as collateral, and it becomes official once it's registered at the Legal Affairs Bureau's land registry.2
A pledge is a form of security interest where a lender, in case of default on the loan, has the right to receive payment from the proceeds of specific assets used as collateral, including movable assets, real estate, and receivables. In project financing in Japan, it's common to pledge receivables owned by the project owner. The perfection of a pledge depends on the type of asset: for movable assets, the lender must possess them; for real estate, the mortgage must be filed at the Legal Affairs Bureau; and for receivables, it involves notifying or obtaining consent from the debtor or registering the pledge.2
An "option contract for the transfer of contractual status" is a security arrangement where one party assigns their contractual rights to a specified third party through an option agreement. This grants the assignee the right to take over the contract under certain conditions, with the original counterparty agreeing to this arrangement. In project financing in Japan, these contracts are commonly used to secure agreements made by project owners. Similar to assigning payment obligations of a third-party debtor, obtaining the consent of the original contract counterparty with a certified date stamp (kakutei hiduke) is typically required to finalize the option contract structure.2
In project financing in Japan, security by assignment (jyoto-tanpoken) is frequently utilized to secure movable assets owned by the project owner due to its straightforward perfection requirements. Unlike pledging movable assets, which necessitates physical transfer of possession, security by assignment can achieve perfection through constructive transfer of possession. This distinction makes security assignments a practical choice for securing movable assets. Perfection of security interests in movable assets and receivables involves various methods such as delivery of movable assets or notification and consent from third-party obligors, with options to register assignments at the Legal Affairs Bureau for additional security.2
Security can be established over receivables in Japan through either a pledge or a collateral assignment, formalized by agreement between the pledgor and pledgee, or assignor and assignee, without involving the debtor initially. However, the security interest isn't fully perfected against the debtor until they are notified or acknowledge the security's creation. Similarly, it isn't perfected against third parties until such notification or acknowledgment is officially recorded or the security interest is registered at the Legal Affairs Bureau. Notifying the debtor typically takes precedence over Bureau registration for perfecting the security interest. Once established, the pledgee or assignee gains the right to collect receivables, though the pledgor or assignor usually retains collection rights until a default event occurs, after which the pledgee or assignee can enforce the security interest by notifying the debtor and collecting receivables directly, with payments directed as per the security agreement terms.2
Security over cash deposited in bank accounts can be established through either a pledge or a collateral assignment, with pledges being more commonly used. There is some debate regarding the enforceability of security interests, especially those termed "floating security," in bank deposits that fluctuate daily. However, these arrangements are generally accepted in the market as valid. To perfect this security interest, notification or consent from the bank holding the account is necessary, often requiring a specific date stamp on the notification or consent document for validity.2
In Japan, security can be taken over shares in companies, which may be issued in certificated form depending on the entity type. For kabushiki kaisha (stock companies), shares can be certificated, and a pledge over these shares is typically perfected by delivering the share certificates to the pledgee. However, share certificates are often not issued by kabushiki kaisha, making registration in the company's shareholder ledger necessary for perfection. In the case of godo kaisha (limited liability companies), membership interests are not issued in certificated form. Perfection of a pledge over godo kaisha membership interests involves obtaining written acknowledgment from the company, along with a date stamp from a notary public, similar to the process for perfecting pledges over receivables.2
When creating security over real property (land), plant, machinery, and equipment, such as pipelines, whether underground or overground, regulatory or similar consents are generally not required beyond obtaining consent from the landowner if the property is leased. Additional consent obligations may arise if specified in contractual agreements, particularly regarding the establishment of security interests over assets. Moreover, if a project receives subsidies from central or regional governments, approval from the relevant governmental authority is necessary to create a security interest over assets acquired with these subsidies, as stipulated in the Act on Regulation of Execution of Budget Pertaining to Subsidies.2
