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"Newsletter-2021"

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Newsletter Reform of German Competition Law (April 2021)

Part 1: Unburdening small and medium-sized companies

The German Act Against Restraints of Competition (“Competition Act”) has been amended to address challenges of the digital economy, to make merger control more efficient for small and medium-sized companies, and to implement EU legislation. This reform of January 2021 concerns several aspects that are of relevance to foreign investors. Those aimed at unburdening small and medium-sized companies will be outlined in this newsletter. A subsequent newsletter will give an overview of the tightened antitrust rules for “Big Data” companies. All our newsletters are also available for download on our website at www.arqis.jp.

1. Lower filing thresholds in merger control

Following the increase of turnover thresholds, a deal must now be notified if
– the combined worldwide turnover exceeds EUR 500 million,
– one party to the concentration has turnover in Germany of more than EUR 50 million (previously: EUR 25 million) and
– another party has turnover in Germany of more than EUR 17.5 million (previously: EUR 5 million).

This reform is expected to reduce the number of new notifications to the Federal Cartel Office (“Bundeskartellamt”) by at least 30 % per year. It has been effective since January 2021, meaning that it applies to any deal that is not yet closed.

However, considering the size of the German economy, the new turnover thresholds are still relatively strict by international comparison. Moreover, an additional (albeit rarely applied) transaction-based threshold might capture the acquisition of a target company regardless of its turnover if the consideration paid exceeds 400 million EUR. The transaction-based threshold may capture, e.g., start-ups with considerable R&D activity or digital business models with low turnover.

For these reasons, many international transactions will still need to be approved beforehand by the Bundeskartellamt, which has announced that freed-up resources will be redirected to a more thorough investigation of the remaining cases.

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Newsletter Re-Employment after Retirement Age (March 2021)

Japan is one of the world’s most rapidly ageing societies. Along with the traditionally high life expectancy, the country’s fertility rate is at a continuously low level. According to the Japanese Ministry of Internal Affairs and Communications, as of September 2020, nearly 30% of Japanese are already 65 years or older. The effects of this demographic change are noticeable. Along with the increasing competition for qualified junior employees, the ageing workforce poses new challenges for employers.

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Newsletter Setting-up Business in Japan (February 2021)

Japan continues to attract the interest of foreign investors, wishing to establish or expand their own business presence in this market. Japanese corporate law provides for a broad variety of legal types of investment, the most prevalent of which are described in this newsletter. These include the representative office (I.), the branch (II.), the joint stock corporation (III.) and the limited liability company (IV.). Whereas the stock corporation traditionally enjoys the highest reputation with banks and business partners and for this reason is most frequently chosen for the establishment of a new legal entity, also the limited liability company has been gaining popularity due to its flexible structure and ease to administer.

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