International Banking & Finance – Japan – Toshikazu Sakai

Our law firm belongs to the Cast Global Group, a comprehensive professional group in Japan. Our group has (i) 11 professional group companies (a law firm, a tax accountant firm and a judicial scrivener firm, etc.); (ii) a trust company (a financial institution and has licenses not only for the Trust Business but also the Type II Financial Instruments Business and the Real Estate Brokerage Business; as well as (iii) several other group companies, including consulting companies. Our group provides comprehensive professional services for cross-border transactions for clients in Japan and overseas.

The group has many clients in China, Hong Kong and Southeast Asian countries. In recent years, we have further expanded our client base to the US and Europe.

Today, our law firm and tax accountancy firm provide comprehensive legal, tax and accounting services in the banking & finance area. Therefore, we are one of only a few firms in Japan who can provide a one-stop service for clients.

We provide the following banking & finance services:
(i) Advice on the establishment and regulation of investment funds, such as real estate funds (real estate securitisation), as well as private equity funds;
(ii) Project finance, including PFI and PPP;
(iii) Various trust businesses, such as trusts for real estate investment;
(iv) Obtaining various financial and real estate licences, such as under the Financial Instruments & Exchange Act (“FIEA”), the Real Estate Specified Joint Enterprise Act, the Fund Transfer Business Act, the Money Lending Business Act, the Real Estate Business Act, etc.; and
(v) The establishment of various compliance systems, including measures to prevent money laundering.

Meanwhile, our firm maintains a close network with (a) domestic and foreign clients and funds with strong financial resources and a high willingness for investment; (b) lenders, including both mega banks and regional banks; as well as (c) financial institutions that act as fund arrangers and fund managers. By linking components (a) through (c) with our group’s trust company and consulting company, we create new investment and business opportunities for our clients and related parties. We also provide legal, tax and accounting support for those investments and businesses, and we have developed a unique business model in Japan in this regard.

Until now, I have worked for 24 years as an expert lawyer in matters of banking & finance. My publications include:

・ “Financial Law – Basics of Financial Law and Essence of Advanced Financial Transactions”, Shoji Homu (2016);
・ “M&A Finance”, Essential Points of Japan M&A Practice, Shoji Homu (2015) (coauthor);
・ “Various Issues in connection with Modern Use of Secret Partnership (Tokumei Kumiai) and Bankruptcy”, Modern Style Contracts and Bankruptcy Laws, Shoji Homu (2015) （coauthor);
・ “The International Comparative Legal Guide to: Lending and Secured Finance”, Global Legal Group Ltd.（2013, 2014, 2015）（coauthor);
・ “Is it possible to provide Collateral to Bondholders?” Business Rehabilitation and Bonds – Restructuring from a Capital Market Point of View, Shoji Homu (2012);
・ “Various Issues in connection with Confidential Duty of Financial Institutions (1)(2)(3)(4)”, NBL, No. 971–974 (2012);
・ “REIT and Civil Rehabilitation” Up-To-Date Practical Commentary Q&A Civil Rehabilitation Law, Seirin Shoin (2011);
・ “Finance Crisis and Securitization of Real Estate,” NBL, No. 894 (2008).

I have gained approximately 14 years of practical experience at Nagashima Ohno & Tsunematsu and Anderson Mori & Tomotsune, which are two of the five largest law firms in Japan, with more than 500 lawyers currently. I also gained approximately eight years of practical experience at foreign law firms in the US and the UK before joining the Cast Global Group in 2021.

During this time, I also gained experience working at various Japanese and foreign financial institutions, including The Bank of Tokyo-Mitsubishi, Deutsche Securities Inc. and JP Investment Co (Japan Post group).

Since 2020, I have been (i) not only working as a lawyer at a law firm, but also (ii) serving as an outside director and audit committee member of The Shikoku Bank, Ltd., which is listed on the Prime Market of the Tokyo Stock Exchange, and (iii) serving as the legal department manager and compliance officer of Pathology Associates K.K, which is a foreign Investment Advisory Business Operator under the FIEA specialising in corporate analysis in the medical field.

Moreover, I completed my registration as a certified tax accountant in 2023.

Based on my career above, the areas of banking & finance that I specialise in are extremely wide-ranging, including (i) structured finance, with real estate securitisation as a representative example; (ii) asset management, mainly with a focus on private equity; (iii) trust business; (iv) banking, including syndicated loans; (v) advice on obtaining various financial licences and financial regulations; as well as (vi) compliance matters in general, such as anti-money laundering measures and compliance with the Personal Information Protection Law. I provide comprehensive expert advice for both domestic and international clients.

Our group has a trust company that holds licences for the Trust Businesses, the Type II Financial Instruments Businesses under the FIEA, as well as Real Estate Brokerage Business, wherein I serve as legal adviser.

In addition to these financial institutions, my clients include fund managers, who create various funds and invests in them, as well as wealthy individuals.

Many of my clients are involved in real estate-related business and private equity business.

Even though real estate investment using a Special Beneficial Interest in Securities Issuing Trust (SBIST) – handled by our group trust company – is not a major real estate investment scheme in Japan yet, it has the potential to become a representative real estate investment scheme for the next generation due to its low structuring costs and tax efficiency.

As a legal counsel for a group trust company, I am deepening my knowledge of the legal and tax aspects of the Special Beneficial Interest Securities Issuing Trusts (SBIST), while also advising on how to make further use of them.

Real estate investment using Special Beneficial Interest Securities Issuing Trusts (SBIST) is particularly effective for overseas investors investing in Japanese real estate.

FinTech is revolutionising Japan’s financial business model and is creating new investment opportunities in real estate investment business, such as STO (Security Token Offering).

Our group has served many clients and businesses in China, Hong Kong and Southeast Asian countries, and, to this end, we maintain many local offices and partner offices in China, Hong Kong and Southeast Asia.

Furthermore, some of our lawyers have qualified – or will be qualified soon – as Hong Kong solicitors, which is extremely rare in Japan. We possess deep connections, not only with Hong Kong law, but also with businesses in the Commonwealth – including such tax havens as the Cayman Islands, as well as with overseas law firms.

Our firm has also accepted, and works alongside, three Ukrainian legal experts in order to support Ukrainians.

In summary, our group offers the capability to handle matters in four languages: English, Chinese, Ukrainian and Japanese and in foreign laws: Hong Kong law (and English law), Chinese law, Ukrainian law and Japanese law. This is especially rare among Japanese law firms.

At present, investments in Japanese real estate and companies by overseas investors are highly active, due to such factors as the Japanese government’s efforts to attract foreign investment, combined with the historically low value of the yen.

Especially concerning Japanese real estate investment, this sector is still undervalued on a global scale, and interest rates on loans from Japanese banks are notably low when viewed globally. When such considerations are combined with the effects of the weak yen, unprecedented inbound real estate investment has become active in recent years.

In inbound investment in Japanese real estate, traditional schemes – such as GK-TK and TMK – are still prominent; however, real estate investment through the Special Beneficial Interest Securities Issuing Trust (SBIST), provided by our group’s trust company, has the potential to demonstrate investment performance that exceeds these schemes.