Deregulation of Leasing Business

In Japan, there is no specified law nor even regulations that stipulate lease transactions and lease business. It is possible to found leasing company and undertake lease business in accordance with general regulations of incorporation in the Commercial Law.

However, the lease transactions with consumer are governed by the Consumer Contract Act and the Law on Particular Business Transaction. (Refer to Consumer Contract Act) Following laws apply to individual case, such as when particular equipment is intended in lease business or when bank affiliated companies undertake lease business.

• Road Transport Law, and Related Laws and Regulations
  Automobile lease transactions are levied many regulations based upon the Road Transport Law and related laws and regulations. Nonetheless, after the latter 1990s, development of deregulation drastically simplified cumbersome procedures of application for permission and registration, and eliminated the conditions for possession of automobiles. In this regard, nowadays the Road Transport Law requires the permission of the Minister of Land, Infrastructure and Transportation to begin Automobile lease business.

• Law Concerning Prevention of Radiation Hazards due to Radioisotopes, etc.
  Lease of equipment equipped with radioactive isotope is fundamentally was not admitted; however, the Laws concerning Prevention of Radiation Hazards due to Radioisotopes, etc. was modified in 1995, which enabled those who are qualified from the Minister of Education, Culture, Sports, Science and Technology to start lease business. In this regard, many kinds of obligations are imposed on qualified leasing company.

• Banking Law and Related Legislation
  What the bank affiliated leasing companies can operate is regulated by the Banking Law and related legislation, including lease business. According to the amended law in 1998, lease business had been confined to finance lease. Consequently, since April of 2002, another lease business has been admitted on the condition that the percentage of revenue of finance lease transactions to all amount of that of overall lease business would not be under 50%.