Recent trends in investment projects in Asia

Rashmi

Today, I would like to talk about the support system and recent initiatives of this office in relation to the corporate /M&A projects in Asia.

Wakae

Asia continues to experience remarkable economic growth overall, but recent market conditions in certain countries have also been characterized by different types of challenge impacting economic activities. Regulations are expected to change in line with these economic conditions, and depending on the policy direction of government authorities, we are also seeing signs of some relaxation of foreign investment restrictions. Compared to Japan, the changes in the legal system of other Asian countries are oftentimes at a much faster pace, and it is important to accurately and quickly update clients with the latest information.

Sasaki

Despite the rapid pace of legislative developments, many countries, particularly in Southeast Asia, have not established the identical legal frameworks as in Japan.
For example, in Thailand, no corporate split system has been introduced yet, and as for a merger, amalgamation has been only applicable, but an absorption-type company merger system was finally introduced in 2023. Compared to Japan's legal system, it is necessary for clients to consider what is the best option to be taken for their business in other Southeast Asia regions given the differences in the legal system.

Rashmi

Can you also talk about the recent trends in investment projects?

Sawayama

I have the impression that the number of M&A transactions in which Japanese companies carve out and sell some of their businesses is increasing as companies implement business concentration and selection strategies. Carve-out transactions tend to make deals more complicated rather than simply transferring the corporation's shares because they require parties to implement certain procedures, such as the transferring of entire business lines, operations and personnel, and newly obtainment of required licenses depending on the applicable country.

Yamamoto

Until now, we continue to have many cases where we provide support to Japanese clients for their investments in businesses outside Japan. Recently, however, there have been an increase in the number of cases where we are acting on behalf of companies other than Japanese companies. For example, operating companies in India are more active in investing overseas than they were about a decade ago. Acquisition targets may also be businesses in multiple jurisdictions in Asia, including Japan.

Sawayama

In either case, transactions may not be completed in a single jurisdiction and may be conducted in multiple jurisdictions.

Rashmi

Then, it seems that there are many opportunities for multiple offices to cooperate in dealing with projects.

Yamamoto

That's right. In cases that span multiple jurisdictions, there are usually attorneys covering different countries. As multiple attorneys work together to deal with a large number of projects, this office has established a system that enables several teams to respond to projects quickly and with a common understanding of the objectives. Therefore, this system has enabled us to provide assistance on these types of projects smoothly.

Rashmi

Could you give us a brief explanation of the initiatives carried out by each overseas office for these projects?

Sasaki

The Bangkok Office currently has around 20 lawyers, and if an investment is of a certain size, the Bangkok Office has a system in place that allows us to respond to projects on a one-stop shop basis, including considering the structure of project, conducting due diligence, preparing contracts, negotiating terms with counterparties, and completing filing procedures required under competition laws.

Ichsan

In transactions involving multiple jurisdictions, for example, we may work with colleagues qualified in the Philippines or Malaysia that belong to the Singapore Office, in collaboration with their fellow attorneys.

Wakae

As mentioned, the number of projects that cut across jurisdictions has increased in recent years. In China in particular, investments in Southeast Asia are expanding in industries such as electric vehicles. Looking ahead, we believe that there will be many more opportunities for our offices in Asia to jointly assist clients located in China with their investments in other Asian jurisdictions.

Sawayama

As mentioned, there are frequent opportunities to collaborate across multiple jurisdictions, and lawyers belonging to multiple offices work jointly on projects. For example, the Tokyo office often serves as a hub for contacts with clients and their projects, and seamlessly interacts with our different offices to provide clients with the necessary legal assistance. Teamwork that transcends the boundaries of each office is formed through working together on projects.

Wakae

We are also actively exchanging personnel among offices. Young lawyers of our Tokyo Office are provided opportunities to gain short-term job experience at offices in Asia, and by working together with lawyers in the destination office in Asia, they can better understand the legal practice and the cultural background there.
In addition, we regularly provide opportunities for lawyers in offices in Asia to gather together, physically or remotely, to exchange ideas and foster team building.

Rashmi

In recent years, we have seen an increase in the number of projects that span multiple jurisdictions. I think the office has well communicated that it has established a well-organized system that can handle such type of projects well. We look forward to being able to collaborate across offices on new projects in the future.

Thank you very much for your time today, everyone.