A beneficial owner refers to a natural person who ultimately owns or controls a company and can substantially influence its business management. Listed companies and their subsidiaries are treated as natural persons for this purpose.

When establishing a company, the beneficial owner is determined according to the following hierarchy:

(i) a natural person who holds more than 50% of the shares of the company to be established;
(ii) if no person falls under (i), a natural person who holds more than 25% of the shares;
(iii) if no person falls under (ii), a natural person who has dominant influence over the business activities;
(iv) if no person falls under (iii), the representative director of the company to be established is deemed the beneficial owner.

At the time of notarizing the Articles of Incorporation at a Japanese public notary office, the name, nationality, address, date of birth, and other information of the beneficial owner must be declared, and identification documents such as a passport must be submitted.

When a Japanese company is established with foreign corporate investors, the shareholder structure of the foreign company must be traced to identify the ultimate natural person who controls the Japanese company as the beneficial owner, who must then be declared accordingly.