How to Get Merger Clearance in Japan, JFTC Notification Process (step‑by‑step)

Understanding how to get merger clearance in Japan is essential for any deal team planning a notifiable transaction involving Japanese assets or operations. The Japan Fair Trade Commission (JFTC) is the sole authority responsible for reviewing pre‑merger notifications under the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade (Antimonopoly Act). This guide sets out the complete pre‑merger clearance process, from eligibility checks and filing thresholds through to the mandatory 30‑day waiting period, required documents, costs, and 2026 procedural updates, giving in‑house counsel, private‑equity teams and M&A lawyers an operational checklist they can apply immediately to their next closing.

Overview of the Merger Clearance Process and Who It Applies To

Japan operates a mandatory, suspensory merger control regime. Any transaction that meets the statutory filing thresholds must be notified to the JFTC before closing. The parties may not complete the transaction until the JFTC has cleared it or the statutory waiting period has expired without the JFTC taking action.

The JFTC’s jurisdiction covers five categories of business combination (known collectively as kigyō ketsugo):

• Mergers (gappei), statutory mergers between two or more companies.
• Share acquisitions, acquiring voting rights that cross a specified ownership threshold in another company.
• Corporate splits (kaisha bunkatsu), absorption‑type or incorporation‑type splits transferring a business division.
• Joint share transfers, two or more companies forming a new joint holding company.
• Business transfers, acquiring the whole or a substantial part of another company’s business.

This article is aimed at deal teams preparing to file, or deciding whether a filing obligation exists, and applies equally to domestic Japanese transactions and cross‑border acquisitions involving a Japanese target or acquirer. Where a foreign acquirer is involved, additional screening under the Foreign Exchange and Foreign Trade Act (FEFTA) administered by the Ministry of Economy, Trade and Industry (METI) may also apply, and deal teams should factor that parallel process into their timetable.

Eligibility and Prerequisites, JFTC Filing Thresholds

Not every transaction requires JFTC notification. A filing obligation arises only when both parties exceed specific domestic sales thresholds set out in the Antimonopoly Act. “Domestic sales” means the aggregate turnover in Japan of all corporations within the same “combined business group” (ultimate parent and all subsidiaries), not simply the revenue of the transacting entity itself.

The thresholds differ slightly depending on the transaction type, but the core structure is a two‑limb test. Both limbs must be met for the notification obligation to apply.

The calculation is based on total domestic sales reported in the most recent fiscal year. For share acquisitions, the filing obligation is triggered each time a party’s voting‑rights ratio crosses the 20 % or 50 % threshold, meaning a creeping acquisition may generate successive filing obligations.

Transactions that fall below both thresholds do not require notification, although the JFTC retains residual authority to investigate any transaction it considers may substantially restrain competition, regardless of thresholds. Industry observers note that the JFTC has increasingly scrutinised transactions involving digital platforms and data‑intensive businesses, even where conventional turnover figures are modest.

The notifying party is ordinarily the acquirer, the company acquiring shares, the surviving entity in a merger, or the company acquiring the business. In a statutory merger between equals, both merging companies file jointly.

How to Get Merger Clearance in Japan, Step‑by‑Step Procedure

The merger notification process in Japan follows a structured sequence. The numbered steps below cover the full journey from internal preparation through to clearance or remedies.

Step 1, Conduct the Internal Threshold Check and Pre‑Filing Diligence

The deal team’s first task is to confirm whether the JFTC filing thresholds are met. This requires compiling group‑wide domestic sales data for both the acquirer side and the target side. Where the acquirer is a foreign entity, the Japanese‑source revenue of the entire worldwide group must be aggregated, a step that frequently requires coordination with local finance teams and auditors. Allow one to two weeks for this exercise, which can run concurrently with broader transaction due diligence.

At this stage, counsel should also map out whether the transaction triggers filing obligations in other jurisdictions, so that a coordinated multi‑jurisdictional filing timetable can be built.

Step 2, Engage in Pre‑Notification Consultation with the JFTC

The JFTC accepts, and actively encourages, pre‑notification consultation (jizen sōdan). This is an informal, voluntary process in which parties submit a draft notification and supporting materials to the JFTC before making the formal filing. The JFTC then provides preliminary feedback on the likely scope of review, identifies any data gaps, and indicates whether the transaction is likely to raise substantive competition concerns.

Pre‑notification consultation is not mandatory, but it is strongly recommended for transactions involving overlapping product markets, novel digital or technology markets, or high combined market shares. The process typically takes two to four weeks to schedule and one to two weeks for written exchanges. It can significantly reduce the risk of delays at the formal review stage.

For cross‑border deals, counsel experienced in JFTC filings can coordinate the pre‑notification consultation with parallel informal approaches to regulators in other jurisdictions, an approach that has become standard practice in multi‑jurisdictional M&A. Practitioners seeking Japan‑qualified counsel in Japan should ensure their adviser has direct experience of JFTC pre‑notification engagement.

Step 3, Draft and Submit the Formal Notification

The formal notification is prepared using the JFTC’s prescribed form, which follows the structure set out in the JFTC notification template (aligned with the International Competition Network’s recommended template format). The notification must be filed in Japanese. Where supporting documents are in a foreign language, Japanese translations are required.

The notification must include all information and attachments specified in the JFTC template, see the Required Documents section below for a complete checklist. Incomplete filings will not be accepted, which delays the start of the statutory waiting period.

Filing is made directly to the JFTC’s Mergers and Acquisitions Division. There is no electronic filing portal; submissions are made in hard copy or by arrangement with the JFTC. The notifying party, ordinarily the acquirer, must sign the notification through an authorised representative, and counsel acting on the party’s behalf should hold a valid power of attorney.

A critical planning point: the notification must be submitted and accepted at least 30 days before the planned closing date. Deal teams should therefore work backwards from the expected closing, allowing time for drafting (one to three weeks) and for any revisions the JFTC may request before it formally accepts the filing.

Step 4, Receive Formal Acceptance and Begin the 30‑Day Waiting Period

The JFTC reviews the submitted notification for completeness. If all required information and documents are included, the JFTC issues a formal acceptance. The 30‑day waiting period begins on the date of acceptance, not the date of submission. During this period, the parties are prohibited from closing the transaction.

If the notification is incomplete, the JFTC will return it to the notifying party with a request for corrections or additional information. The waiting period does not start until the corrected notification is accepted.

For straightforward transactions with no overlapping markets, the JFTC frequently clears the transaction before the full 30 days have elapsed by issuing an early‑clearance notice. In practice, routine filings are often cleared within two to three weeks.

Step 5, Respond to JFTC Requests for Additional Information

During the Phase I review period, the JFTC may issue requests for information (RFIs) if it needs further data to assess the competitive effects of the transaction. Typical RFI topics include more granular market share breakdowns, customer lists, internal strategy documents, and details of competitive dynamics in the relevant product or geographic market.

Parties should respond promptly and thoroughly. While an RFI issued during the initial 30‑day Phase I window does not automatically extend the waiting period, the JFTC may determine that a more detailed review is required, triggering a referral to Phase II. Preparing a “Q&A playbook” in advance, anticipating the JFTC’s likely questions based on the market overlaps identified during pre‑filing diligence, is the most effective way to avoid delays.

Step 6, Phase II Procedure and Possible Remedies

If the JFTC determines during Phase I that the transaction may substantially restrain competition in a particular field of trade, it refers the matter to a Phase II JFTC review. The JFTC notifies the parties of this decision before the Phase I waiting period expires.

In Phase II, the JFTC conducts an in‑depth investigation, which may include requests for extensive internal documents, third‑party market inquiries, and economic analysis. The JFTC must conclude Phase II by the later of 120 days from the date of acceptance of the initial notification or 90 days from the date of receipt of all materials requested during Phase II.

If the JFTC concludes that the transaction would substantially restrain competition, it may negotiate remedies with the parties, typically structural remedies such as divestiture of overlapping business lines, or behavioural commitments such as continued supply obligations. The parties may submit remedy proposals at any stage, and early engagement on remedies can shorten the overall timeline. If no agreement on remedies is reached, the JFTC may issue a cease‑and‑desist order prohibiting the transaction.

The following timeline table consolidates the typical sequence and duration of each step in the merger clearance process:

Documents Required for Merger Filing with the JFTC

The JFTC notification template prescribes the information and supporting documents that must accompany the formal filing. The table below lists each required item, together with practical notes on format, issuer, and evidence standards. Incomplete filings are the single most common cause of delay in the acceptance process, so deal teams should treat this as a binding checklist.

All documents originally in a language other than Japanese must be accompanied by a Japanese translation. The JFTC may accept working translations for initial review, but certified translations may be requested during the review process. Where commercially sensitive information must be included, the JFTC permits confidential treatment requests, parties should clearly mark any confidential materials and provide a non‑confidential summary for the public file.

Practitioners involved in cross‑border transactions should note that the domestic sales breakdown is frequently the most time‑consuming document to prepare, particularly where the acquirer is a multinational group that does not routinely disaggregate Japanese revenue at the entity level. Starting this data‑gathering exercise early, ideally during the due‑diligence phase, is the most effective way to avoid delays. The International Business lawyer directory lists practitioners experienced in preparing these filings.

Merger Timeline Japan, Key Deadlines and the 30‑Day Waiting Period

The central planning discipline for any notifiable transaction is the 30‑day waiting period. This is an absolute prohibition on closing: the parties may not consummate the transaction until 30 calendar days have elapsed from the date the JFTC formally accepts the notification, unless the JFTC grants early clearance.

The practical rule for deal teams is straightforward: if closing is scheduled for Date X, the formal notification must be accepted by Date X minus 30 calendar days at a minimum. Working backwards, that means submitting the notification at least 32–35 days before closing (to allow for acceptance processing), and beginning the drafting and document‑assembly process at least six to eight weeks before closing.

The following table sets out typical total timelines for common transaction types:

Where the JFTC refers a transaction to Phase II, the maximum review period is the later of 120 days from acceptance of the original notification or 90 days from receipt of all materials requested during Phase II. In practice, Phase II cases in Japan are resolved within three to five months, though complex cases involving market‑definition disputes or significant divestiture negotiations may take longer.

For multi‑jurisdictional transactions, deal teams should map the JFTC timeline against the timetables of other reviewing authorities, the EU Commission, US FTC/DOJ, and the Korean Fair Trade Commission are the most common parallel filings. Misalignment of timelines is a frequent source of closing delays. Early indications suggest that the JFTC has become more receptive to informal timing coordination with peer agencies, particularly for transactions reviewed simultaneously in multiple Asia‑Pacific jurisdictions.

Costs, Fees, and Tax Considerations for Merger Clearance in Japan

The JFTC does not charge a filing fee for merger notifications. This distinguishes Japan from several other major merger‑control jurisdictions. However, the external costs of preparing and managing a JFTC filing can be significant, particularly for cross‑border transactions.

Advisory fees are subject to Japanese consumption tax (currently 10 %). Deal teams should confirm fee treatment with local counsel at the engagement stage.

What Changes in 2026, Merger Clearance Process Updates

No amendment to the Antimonopoly Act’s merger filing thresholds or statutory waiting periods has taken effect in 2026. The core procedural framework, including the ¥20 billion / ¥5 billion threshold structure and the 30‑day Phase I waiting period, remains unchanged.

However, several operational and enforcement‑practice developments are relevant for deal teams filing in 2026:

• Stricter domestic sales allocation expectations. The JFTC’s review of FY 2024 notification data has prompted closer scrutiny of how multinational groups allocate revenue to Japan. Deal teams should expect more detailed questions on transfer‑pricing methodologies and inter‑company allocation bases during pre‑notification consultation.
• Phase II timing transparency. The JFTC has reinforced its commitment to completing Phase II reviews within the 120‑day / 90‑day statutory maximum. Industry observers expect the JFTC to continue publishing annual statistics on notification volumes and review timelines, providing clearer benchmarking data for deal teams.
• Enhanced focus on digital and data‑intensive markets. Consistent with international trends, the JFTC has signalled heightened attention to transactions involving data aggregation, platform markets, and AI‑related business combinations, even where conventional market‑share metrics may not indicate significant overlaps.
• Translation and filing quality. The JFTC has informally communicated expectations for higher‑quality Japanese translations of supporting documents, particularly internal strategy and board materials submitted as evidence of competitive effects.

The likely practical effect of these developments is that deal teams should build additional preparation time into their filing timetable, particularly for the domestic sales breakdown and for the translation of key documents, compared to filings made in prior years.

Common Pitfalls in the Merger Clearance Process and How to Avoid Them

• Closing before clearance (gun‑jumping). Completing a notifiable transaction before the JFTC’s waiting period has expired is a violation of the Antimonopoly Act. The JFTC may issue administrative orders requiring the parties to unwind the transaction, divest assets, or take other corrective measures. Penalties for closing before clearance also include potential criminal fines. Mitigation: include a merger‑control condition precedent in the transaction agreement, and structure any interim‑period arrangements carefully to avoid exchanging competitively sensitive information before clearance.
• Incomplete domestic sales breakdowns. Failure to provide a sufficiently granular Japan‑source revenue breakdown is the most common reason for the JFTC to decline to accept a notification. Mitigation: begin the data‑gathering exercise during due diligence; engage local accountants if the group does not routinely report Japan sales at the entity level.
• Inadequate market definition. Filing a notification with an overly broad or unsupported product‑market definition invites JFTC pushback and delays. Mitigation: prepare a defensible market definition with supporting evidence (industry reports, customer surveys, internal documents) before filing.
• Late responses to RFIs. Slow or incomplete responses to JFTC information requests during Phase I significantly increase the risk of a Phase II referral. Mitigation: prepare a Q&A playbook anticipating likely questions before the formal filing is submitted; designate an internal point of contact with authority to approve document production on short notice.
• Poor cross‑border coordination. Filing in Japan without coordinating the timing and substance of parallel filings in other jurisdictions can lead to inconsistent remedy commitments or conflicting timetables. Mitigation: appoint a lead coordination counsel to manage the global filing calendar and ensure consistency of market definitions and evidence across jurisdictions.
• Neglecting FEFTA screening for foreign acquirers. Foreign investors acquiring shares in a Japanese company in certain designated sectors must separately notify the Ministry of Finance / METI under the Foreign Exchange and Foreign Trade Act. Missing this parallel requirement can delay or derail closing independently of the JFTC process. Mitigation: run a FEFTA screening check in parallel with the JFTC threshold analysis.

Sources

1. Japan Fair Trade Commission, Mergers
2. JFTC, ICN Merger Notification and Procedures Template (Japan)
3. Act on Prohibition of Private Monopolization and Maintenance of Fair Trade (Antimonopoly Act), e‑Gov
4. Ministry of Economy, Trade and Industry (METI), Foreign Exchange and Foreign Trade Act
5. International Competition Network, Merger Notification and Review Procedures
6. OECD, Competition Policy (Japan country notes)