1. FTS license legal access conditions and operational substantive requirements
Legal Entity and Local Representative Substance
The organization must establish a corporation (KK) or other corporate body in Japan，Or designate a local permanent representative and set up a physical business office in accordance with the law。The Financial Services Agency conducts "substance over form" review，Require anti-money laundering compliance officer (MLRO) and key executives to be resident in Japan，Reject empty shell operations。
Statutory business classification system
License plates are divided into three categories according to law：The first category is large transfers (a single transaction exceeding 1 million yen)，Subject to strict capital detention restrictions)；The second category is regular transfers (within a single transaction of 1 million yen)，Cross-border e-commerce and remittance are the most common)；The third category is small-amount transfers (single transaction is limited to 50,000 yen)。
Segregation and preservation of reserves (Safeguarding)
Strictly implement customer fund preservation obligations。The institution must sign a performance guarantee contract with a credit institution or trust company in Japan，Deliver 100% of client funds to the trust in equal or even excess amounts for physical isolation，It is strictly prohibited to misappropriate loans or use them for own operations。
Anti-money laundering (AML/CFT) Tracking system
by 2024 New regulations in the year，Applicant institutions must establish a review system that can automatically track the source of funds，Implementation of abnormal transactions 72 Mandatory reporting mechanism within hours，And block the agency fund network with non-compliant institutions in FATF non-whitelist countries in accordance with the law.。
2. 2023-2025 Regulatory developments and major revisions to Japan’s funds transfer industry
- 2025Year
Cross-border collection agencies are subject to strong supervision：2025The 2018 Amendment to the Fund Settlement Law officially defined "cross-border collection agency business" as a fund transfer transaction.。This move requires acquirers and distributors targeting cross-border e-commerce and overseas merchants to obtain corresponding types of fund transfer licenses。
- 2024Year
Tightening of AML regulations and special zone incentive policies：The Financial Services Agency issues supporting guidelines for the Fund Settlement Act，Mandatory reporting of abnormal transactions within 72 hours。same year，To attract foreign investment，Launch of “Financial Zone”，Accept registration through the FMEO English channel and provide initial financial subsidies。
- 2023Year
Lifting the ban on digital wages and opening up all-bank systems：The Ministry of Health, Labor and Welfare officially allows employers to transfer salaries (up to a limit of 1 million yen) to the accounts of qualified fund transfer operators。at the same time，Zengin System opens clearing qualifications to non-bank payment institutions for the first time。
3. List of statutory application submission files and review elements
The applicant's articles of association and legal person registration book (need to implement mandatory penetration disclosure of the ultimate beneficiary UBO)。
Legal proof of client fund preservation agreement (such as performance guarantee document or full fund trust contract)。
Covering the future 3 Business plan with annual financial budget model and winding-up plan。
Internal compliance controls and anti-money laundering/anti-terrorist financing (AML/CFT) management procedures (including 72 Hourly warning and interception mechanism)。
Resume evidence of local full-time executive and anti-money laundering compliance officer、Fund source audit and no criminal record。
4. Application and compliance procedures for foreign-invested institutions (Including special zone FMEO channel)
Stage one：Preliminary due diligence and structure establishment (4-6week)
Establishing a foreign investment access structure。Establish a company (KK) in Japan and inject compliance capital verification capital。Make an initial inquiry to the Financial Markets Entry Office (FMEO)，Clarify business classification (first to third categories)。
Stage 2：Document preparation and case file pre-review (2-4months)
Hong Kong Huitong is based on the review standards of the Financial Services Agency，Prepare financial models including、A complete set of case files on AML defense lines and fund preservation mechanisms，Submit pre-qualification in English through the jurisdiction's financial bureau or FMEO。
Stage three：Formal submission and penetrating inquiry (3-6months)
Formal submission of registration application。The Financial Services Agency conducts extremely stringent thorough due diligence on UBO’s background and funding sources，and issued multiple rounds of Requests for Inquiry (RFI) regarding anti-money laundering systems and IT disaster recovery plans.。
Stage four：Complete registration and compliance business development (4-8week)
After meeting all statutory requirements，The jurisdictional Finance Bureau officially issues the registration number for fund transfer operators。The institution opens in accordance with the law，and complete compliance filings with industry self-regulatory organizations such as the Japan Fund Settlement Association.。
5. Analysis of legal requirements and capital factors for Japanese FTS licenses
| Check category | Legal regulatory standards and compliance analysis |
|---|---|
| Capital and net assets | Although there is no absolute “one size fits all” bottom line，However, the legal requirement is that institutions must have their own net assets as a buffer that match their actual business scale.。And customer funds must be met at all times 100% Reserve fund preservation requirements for equal or excessive pledges。 |
| Local bank account opening review | Core prerequisites for application。Actual controllers (especially Chinese nationals) must undergo strict KYC/AML due diligence，Complete bank statements in Japan and proof of legal source of wealth (SoW) are required.。 |
| Differences in system architecture requirements | Category 1 (large transfer) due to extremely high business risks，The Financial Services Agency’s IT infrastructure、The audit standards for business continuity plans (BCP) and anti-tampering mechanisms are much stricter than those of the second、Category three。 |
| Official fees and agency costs | The Financial Services Agency collects statutory registration taxes based on business levels.。Hong Kong Huitong's comprehensive legal agency services cover entity establishment、Compliance text preparation、Full guidance on system audit docking and supervisory interviews。 |
6. Review red lines and reminders on situations where the Financial Services Agency refuses approval
UBO penetration review blocked： Chinese and other foreign actual controllers are unable to provide clear Japanese bank statements or proof of legal initial capital sources，As a result, anti-money laundering background checks failed to meet standards.，Registration is on hold indefinitely。
Lack of local substantive operations： Attempting to operate as an "empty shell"，Failure to appoint a local resident senior management team with Japanese financial resume and AML practical experience (such as holding CAMS certification) in accordance with the law。
Fund preservation mechanism is broken： Due to business model risk rating，Failure to reach a performance guarantee or trust agreement with a local credit institution in Japan，Unable to achieve statutory 100% Physical isolation of reserves。
7. Industry cutting edge：2024-2025 Compliance cases approved in Japan
Airwallex (Cloud collection in the sky) The second type of license was approved (2025)
2025November，Airwallex Japan officially obtains second type of fund transfer industry license。This agency uses this to directly guide Japanese companies to settle in，Comprehensively launch local domestic and foreign currency centralized payment business，and appointed to own 20 Local legal representative with years of experience，Achieved deep localization of compliance architecture。
Restructuring of large-scale Internet and cross-border payment platforms
respond 2025 "Cross-border collection agency" is included in the new regulations for strong supervision of the fund transfer industry in 2020，Including Tencent system (through related entities) and institutions focusing on e-commerce and social settlement such as PingPong，All are actively reorganizing their liquidation structures in Japan.，Ensure that massive transactions and multi-currency distribution comply with the latest compliance indicators。
8. Practical Legal Questions and Answers (FAQ)：Analysis of legal conditions and compliance pain points
Absolutely prohibited by law。The Financial Services Agency implements the principle of substance over form。The organization must establish a physical business office in Japan，And appoint at least one local resident representative with financial practical experience，Anti-Money Laundering Compliance Officer must also be resident。
Divided into three categories according to the "Fund Settlement Law"。The first category is large transfers (a single transaction exceeding 1 million yen)，restricted stay)；The second category is regular transfers (within a single transaction of 1 million yen)，Cross-border e-commerce is the most common)；The third category is small-amount transfers (limited to 50,000 yen)。
Yes。According to the 2025 Amendment to the Fund Settlement Law，Cross-border collection agency business is officially clarified as a fund transfer transaction，You must obtain a corresponding type of fund transfer industry license in accordance with the law before you can operate legally.。
Although the bill does not stipulate a unified absolute bottom line，However, it is mandatory for institutions to have a net asset buffer that matches their business scale.。also，Institutions must 100% Pledge customer reserves in full to fulfill fund preservation obligations，Misappropriation is absolutely prohibited。
FSA will conduct rigorous due diligence (UBO review)。When a natural person of Chinese nationality is the actual controller，Proof of legal source of funds and bank credit record in Japan must be submitted。It is recommended to introduce Japanese compliance executives to optimize the governance structure。
Institutions are strictly prohibited from using client funds for the company’s own operations.。Must sign a performance guarantee contract with a credit institution or trust company in Japan，Deliver equal or even excess amounts of client funds to the trust for physical isolation and safekeeping。
There is a significant difference。The first category (large amount) involves high-risk large-amount settlements，The Financial Services Agency’s IT infrastructure、Disaster Recovery Plan (BCP)、The audit standards of anti-tampering mechanisms and anti-money laundering systems are much higher than the second、Category three。
According to the new regulations in 2024，Money transfer operators’ systems must support automated transaction anomaly interception，It is also mandatory that suspicious transactions must be 72 Complete the report to the regulatory agency within hours，Unregulated financial transactions with non-whitelisted countries are prohibited。
A business plan including a three-year financial model must be provided、Detailed fund preservation agreement certificate、System Architecture Security Report、AML/CFT Internal Control Procedures，and background penetration review documents for all key executives。
After several months of preliminary review relying on the FMEO English channel or the local financial bureau,，From formal submission to registration issuance, it usually takes 3 to 6 months。Combined with entity establishment and reserve account opening，The overall end-to-end practical cycle is estimated to be 8 to 12 months。
Organizations are required to submit business and financial reports to the competent finance bureau on a regular basis in accordance with the law.，Accept external independent audits on the implementation of fund preservation，And perform system security self-inspection according to the latest API standards of Zengin。
