When a foreign company conducts business in Japan and handles personal information relating to individuals in Japan, it may be subject to Japan’s Act on the Protection of Personal Information (the “APPI”).

The APPI applies not only when a foreign company directly collects personal information from Japanese users, but also when it indirectly obtains or processes such information in connection with providing goods or services to persons in Japan. As a result, foreign companies may be required to comply with obligations such as implementing security measures for personal data and reporting certain data breaches.

In addition, when a Japanese company transfers personal data to a foreign company, the Japanese company is generally required to obtain the data subject’s prior consent. However, this requirement may be relaxed if the recipient is located in a country recognized as having an equivalent level of data protection (such as the EU or the UK) or has implemented measures equivalent to those required under the APPI through certifications or contractual arrangements.

Accordingly, foreign companies entering the Japanese market should understand the APPI’s extraterritorial application and establish appropriate privacy policies, contractual safeguards, and data governance measures to ensure compliance with Japanese data protection requirements.