Financial Crime World

Japan’s Small Businesses Face Complexity in Achieving AML/KYC Compliance

As one of the world’s leading economies, Japan offers a lucrative market for businesses looking to expand their reach. With its robust economy and excellent infrastructure, it’s no wonder that 49% of companies consider Japan an attractive destination as a test market and 40.5% believe it suits business expansion. However, achieving compliance transparency in Japan’s business ecosystem is a complex challenge that many organizations face.

Challenges in Achieving AML/KYC Compliance

Language Barrier

Most business documents exist only in Japanese, leading to significant issues during company verification, including communication gaps and misunderstandings.

Outdated Technology

Some banks still rely on fax machines to exchange essential documents, hindering the compliance process.

Lack of Transparency in Beneficial Ownership Structures

Japan’s official business registry does not provide any information about ultimate beneficial ownership, making it difficult for companies to navigate intricate ownership structures.

Jurisdictional Limitations

Electronic submission of documents is only available for incorporation, and non-Japanese companies cannot access relevant systems from overseas, complicating the KYC process.

Regulatory Bodies in Japan

  • Financial Service Agency (FSA)
  • Ministry of Economy Trade and Industry (METI)
  • Fair Trade Commission (FTC)

Each of these bodies plays a critical role in ensuring transparency in business regulatory compliance.

The Solution: KYB

The KYB has consolidated business data from over 200 countries and states, providing access to multiple registries in one go. By retrieving business information from official registries such as:

  • Japan External Trade Organization
  • National Tax Agency—Houjin Bangou
  • IDEC Yokohama
  • Financial Services Agency
  • Tokyo Stock Exchange
  • Japan Platform for Patent Information

The KYB helps navigate complex ownership structures and ensure compliance with AML regulations.

Benefits of Using The KYB

  • Simplifies the KYC process, saving time and resources
  • Provides access to multiple registries in one go
  • Helps navigate complex ownership structures
  • Ensures compliance with AML regulations

For small businesses looking to achieve AML/KYC compliance in Japan, it’s essential to understand the challenges and regulatory bodies involved. By working with a reliable partner like The KYB, companies can navigate the complexities of doing business in Japan and ensure compliance transparency.