FAQ

October 19, 2016

What are the highest and lowest interest rates allowed in Japan?

Interest-free loans are allowed under the Japanese Civil Code so parties are free to contract into zero-interest loan agreements as they wish.  However, there are limits on how much interest a lender can charge on a loan.  The Interest Rate Restriction Law provides that the maximum allowed interest rate is 15% annually for amounts of 1 million yen or more.
September 20, 2016

What is a Memorandum of Understanding?

A Memorandum of Understanding, or MOU as it is commonly called, is a document signed between two or more parties that is intended to memorialize their shared agreement to pursue a certain goal.  MOU vary in formality and can be very similar to formal contracts or simply a casual written summary of an oral agreement.
August 29, 2016

What is a Non-disclosure Agreement (NDA)?

A non-disclosure agreement (NDA) is an agreement signed between two or more parties to prevent the disclosure of confidential information.  It also can be called a confidentiality agreement (CA), confidential disclosure agreement (CDA), proprietary information agreement (PIA) or secrecy agreement (SA).
August 8, 2016

What is the interest rate used by courts in Japan?

The Japanese the Commercial Code specifies a statutory interest rate of 6% annual to be applied between merchants when no interest rate is specified in the contract.  If two business partners agree to a loan in their contract, but neglect to specify an interest rate, the court will automatically set the rate at 6%.