KPI CLEAR BEFORE CRIME
In Japan, it is often heard that foreigners are easily granted non-prosecution.
However, looking at the latest Ministry of Justice statistics, at least that simple image does not match the facts.
In the 2024 cases involving foreign suspects who came to Japan, the indictment rate was 2.8 percentage points higher for penal code offenses and 1.0 percentage point higher for special act offenses compared to the overall total including Japanese citizens. (Source: Ministry of Justice, "2025 White Paper on Crime")
In other words,
FOREIGNERS ARE NOT SIMPLY “LET OFF.”
Because they are a foreigner, they will not be prosecuted.
Because they are foreigners, Japan's criminal justice system is lenient.
At least, official statistics do not support such a simple explanation.
Then what is it that foreign executives and overseas companies truly fear?
The feedback we are receiving is much more fundamental.
TELL US THE RULE BEFORE YOU CALL IT ABUSE
The issue is not being a foreigner.
The problem is that it is not sufficiently clear what is prohibited at the time of conducting business.
And this is not just a problem for foreigners.
Similar consultations have also been received from Japanese executives.
I used a certain system after checking and utilizing published laws and regulations, administrative guidelines, explanations from regulatory authorities, and expert advice.
However, later on, it was judged by the criminal justice side (prosecution) as "abusing the system."
There is a significant foreseeability issue here.
[Welcome Message on the Nasdaq NYC Tower]
LAW OR LABEL?
Recently, we have received multiple inquiries regarding the general system details and methods of utilizing the angel tax system.
The angel tax system is a legal tax system established to promote investment in startups.
The system has requirements for eligible companies.
There are investor requirements.
There is a confirmation application.
It is subject to confirmation by the prefectural government or similar authorities.
There is also a system in place to revoke that confirmation under certain circumstances.
In other words, THERE IS A REGULATORY PROCESS
There are institutional procedures.
Nevertheless,
Among the consultation cases we are aware of, without even the functional operation of revocations or other administrative judgments by supervisory administrative agencies,
There is a case where the criminal justice (prosecution) side subsequently evaluated it as an "abuse of the system."
We have no intention of discussing the guilt or innocence of individual cases here.
However, it raises a critically important question regarding institutional design.
WHERE WAS THE RED LINE? The word "abuse" is not a law. –
You must not abuse the system.
That goes without saying.
However, if criminal liability is to be pursued, specific prohibitive norms that companies and foreign managers can know in advance are necessary.
Which article is it?
Which requirement is it?
At what point does crossing the line of a certain action make it illegal?
What will be the relationship with the administrative judgment of the regulatory authority?
What kind of facts would turn a civil or administrative matter into a criminal case?
If this cannot be explained in advance, it will be even more difficult for foreign executives. If Japanese people read the system in Japanese and consult Japanese tax accountants and lawyers without being able to understand the boundaries, it is unrealistic to expect executives investing in Japan from overseas to perceive those boundaries.
Ryoji Baba, CEO of rYojbaba Co., Ltd., featured on the Nasdaq Tower
FOREIGN INVESTORS ARE ASKING A FAIR QUESTION
To foreign executives, the question is simple.
“Where is it written?”
Where is it written?
What are the prohibited rules?
Will I find out if I ask the regulatory agency?
Will asking the tax office clear this up?
Will I know if I ask the police?
Would the prosecutors know if I asked them?
And,
If no one answers in advance, why are we told “You abused the system” after the fact?
This is not a complaint specific to foreigners.
This is a rule-of-law question
It is.
WE DO NOT WANT PROSECUTORS TO EXPLAIN THE RULE AFTER ARREST
The kind of society we want to build is not one where, after being arrested, a prosecutor evaluates your actions by saying, "That was an abuse of the system," and asks, "Do you think it was a bad thing or a good thing?"
Before that, inquire with administrative agencies, tax authorities, the police, prosecutors, experts, and necessary institutions to determine to what extent it is legal.
What actions create criminal liability?
a society that clarifies as much as possible in advance.
KPI Rule Clarity Engine
We are proceeding with the development of an AI-powered KPI RULE CLARITY ENGINE.
When companies or foreign business owners utilize new systems, tax regulations, subsidies, financial products, etc., AI first comprehensively analyzes laws, cabinet orders, ministerial ordinances, circulars, administrative guidelines, regulatory authorities' FAQs, judicial precedents, and published criminal cases.
And,
WHAT IS CLEAR?
WHAT IS GREY?
WHAT IS PROHIBITED?
Separate.
THEN WE ASK
When AI detects a gray area, it doesn't stop there.
Inquire with the supervisory administrative agency
Use the official prior confirmation system if any available schemes exist.
・Receive reviews from criminal law experts as needed
Furthermore, utilizing lawful consultation and inquiry desks, all issues will be presented in advance to the police, prosecution, and other related organizations.
The question is clear.
Which part of this business model could be considered a crime?
If it is prohibited, please provide the legal basis for it.
Explain the boundary between administratively permissible limits and criminal liability.
AI CREATES THE AUDIT TRAIL
And record everything.
What did you ask?
- When you asked the question
Which documents were submitted
What did the supervisory authority answer?
What issues were left unanswered?
How did the business subsequently modify its operations?
I will chronologize this using AI.
This accumulation is not merely internal data.
It is a practical asset for visualizing invisible standards and preparing explanations and evidence in advance.
We will return this practical asset in a way that also leads to the peace of mind of those who support us and their families.
NO SURPRISE CRIMINALIZATION
What we aim for is to reduce the surprise of ex-post criminalization.
IF IT IS ILLEGAL, TELL US BEFOREHAND
If it constitutes a crime, I want prosecutors, who evaluate things beyond the scope of regulatory agencies, to tell me in advance.
If it is prohibited, I want you to write to the regulatory agency.
If it goes against the purpose of the system, I'd want the guidelines to at least state that clearly.
If an administrative judgment is necessary, I want the administrative agencies not to hide behind the prosecutors and to make that judgment proactively.
If it is so serious that the regulatory authority does not even step in and prosecutors immediately make it a criminal case, I want a system created that allows companies to inquire with prosecutors in advance.
This is not the company being unreasonable.
THIS IS COMPLIANCE
It is.
THE SAFEST COUNTRY IS THE CLEAREST COUNTRY
I do not want to make Japan a country where people must be careful not to get caught.
I want to make Japan a country where “ASK BEFORE YOU ACT.” works.
Foreign entrepreneurs can establish a company in Japan with peace of mind.
Foreign companies can use Japan's systems with peace of mind.
Japanese executives also do not need to fear that they might suddenly be treated as criminals later just for using the new system.
What is needed for that is not to weaken the punishments.
Clearer Rules
JAPAN SHOULD BE TOUGH ON CRIME
AND FAIR BEFORE CRIME
Those who intentionally falsify the system, create fraudulent documents, deceive others, and deliberately commit crimes should be thoroughly investigated.
However, if the boundary with a crime is later drawn using only the word "abuse" for a system where no clear prohibition is found in the law, administrative agencies have pointed out no problems, and even experts find it difficult to make a judgment, then the very predictability of Japan is called into question.
FOREIGNERS ARE NOT ASKING FOR SPECIAL TREATMENT
What foreign executives are looking for is not the privilege of avoiding prosecution.
THEY WANT TO KNOW THE RULE
That's all.
And as Ministry of Justice statistics show, the indictment rate for foreign nationals visiting Japan is not necessarily low.
That is precisely why we need to move one step beyond the social debate that "foreigners are not prosecuted because they are foreigners."
The issue is not nationality.
THE QUESTION IS PREDICTABILITY
FROM “ABUSE” AFTER THE FACT TO “GUIDANCE” BEFORE THE FACT
From a society that labels things as "abuse" after the fact, to a society that sets boundaries beforehand.
From a justice system that explains the meaning after arrest, to a state that can explain the rules before arrest.
AI does not make laws on behalf of the government. It does not determine crimes on behalf of the prosecutors.
However, it is possible to organize the laws, regulations, and responses published by the state itself, discover contradictions and gaps, and lead to a large volume of prior inquiries.
FROM PRINCIPLE TO PRACTICE
This way of thinking is not just about future principles.
We do not view our shareholders merely as providers of capital.
We believe it is also our responsibility to return the knowledge and systems the company has gained through its operations to our shareholders, who trust and support us, in the form of tangible peace of mind.
We aim to be a company that does not keep the knowledge cultivated in our past business within the company alone, but instead gives it back in a way that contributes to the peace of mind of our shareholders and their families, facing them with concrete actions rather than mere words.
OUR GOAL IS SIMPLE
Make Japan the easiest country in the world for both foreigners and Japanese to understand, the most predictable, and the safest for doing business.
KPI CLEAR BEFORE CRIME
If it is prohibited, make it clear.
If it is unclear, let us ask.
If government knows the risk, warn before arrest.
Japan,PUBLIC・FAIR・SAFEToward a true nation of the rule of law.
That is our next KPI.
Ryoji Baba, Representative Director and President of rYojbaba Co., Ltd., celebrated after his business contribution to the world was simultaneously broadcast across major US media outlets.
For inquiries, please contact
E-mail：info@ryojbaba.co.jp