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Recalibrating Your Business Presence in Japan for the New Normal: Guide to Downsizing and Exit Options
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Recalibrating Your Business Presence in Japan for the New Normal:
Guide to Downsizing and Exit Options

Nov 2021
Update Nov 30, 2021
Practice Areas Restructuring/Insolvency and Bankruptcy

Authors Zentaro Nihei Masaki Fujita Satoshi Ogino Kanako Watanabe Sachiko Jimbo Akira Hidaka Ayako Sophia Tanabe

With the tapering of pandemic restrictions, businesses around the world are looking to settle into the new normal. It is a time of optimism but also some lingering uncertainty. Some businesses have survived through cost-cutting and downsizing of employees and may need time to recover. In some cases, the pandemic has ignited the momentum for digital transformation and has been a catalyst for business innovation. “Work from home” became widespread during the pandemic and changed the way many businesses and employees view the workplace. This has caused some businesses to rethink their office space needs.

For business owners reassessing their physical footprint in Japan and whether to withdraw fully or simply streamline the local presence, there are a variety of legal issues to consider. For business owners wishing to pull out from Japan, but are unable to sell of their shares in such businesses, the “ordinary liquidation” or “special liquidation” procedures under the Companies Act may be useful. On the other hand, “bankruptcy” protection procedures under the Bankruptcy Act of Japan may be more appropriate for business owners that are faced with threats, from multiple creditors, of legal actions to enforce their rights against the business.


This guidebook provides an overview of the some of the key considerations for reducing and/or shutting down business operations in Japan, including overviews and analyses of the following:

  • (i) the considerations relevant to a reduction in the scope of business operations in Japan;
  • (ii) the methods by which business owners may fully exit the Japanese market, including by way of share sale and asset transfer;
  • (iii) the legal procedures available in Japan for business owners to fully exit the Japanese market when share sale, asset transfer and other methods of business disposal are not feasible;
  • (iv) bankruptcy protection procedures in Japan in situations where efforts to save or sell off a business have failed and where liquidation procedures are not suitable; and
  • (v) situations where pre-bankruptcy transactions may be deemed invalid or avoidable.

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