Frequently Asked Questions
Cross-Border Inheritance — Which Country’s Law Decides
People assume that living in Japan means Japanese law applies. Japan’s private international law starts not from residence but from nationality — and then, in a second step, the answer can bounce back depending on what the other country’s law says (renvoi). Designing without knowing about both steps means the estate is divided under a law you did not expect.
When a foreign national dies, which country’s law governs the succession?
Article 36 of the Act on General Rules for Application of Laws provides that “succession shall be governed by the national law of the decedent”. The starting point is neither the place of residence nor the location of the assets, but the decedent’s nationality.
For wills, Article 37 provides that the formation and effect of a will are governed by the testator’s national law at the time of its formation, and revocation by the testator’s national law at the time of revocation.
Source: 法の適用に関する通則法（e-Gov 法令検索）
What if that national law says real estate is governed by the law of its location?
It comes back to Japanese law. Article 41 (renvoi) provides that where the national law of the party governs and that country’s law says Japanese law should apply, Japanese law applies.
The proviso to Article 41 excludes renvoi only for Article 25 (effect of marriage) and Article 32 (legal relationship between parent and child). Succession under Article 36 is not excluded — so renvoi does operate in succession. Missing this reverses the answer.
Source: 法の適用に関する通則法（e-Gov 法令検索）
What about a Chinese national leaving real estate in Japan?
For statutory succession to real estate located in Japan, renvoi means Japanese law applies.
The path has two steps. (1) Article 36 points to the decedent’s national law — Chinese law. (2) Article 31 of China’s Law on the Application of Law to Foreign-Related Civil Relations provides that statutory succession is governed by the law of the decedent’s habitual residence at death, but that statutory succession to immovable property is governed by the law of the place where the property is located — so, Japanese law for Japanese real estate. (3) Article 41 renvoi therefore brings it back to Japanese law.
Movables and immovables split. For movables such as bank deposits and shares, the main clause of Article 31 applies the law of the decedent’s habitual residence at death. That is Japanese law for someone habitually resident in Japan and Chinese law for someone habitually resident in China — so two different laws can govern within a single estate.
Source: 法の適用に関する通則法（e-Gov 法令検索）、中華人民共和国渉外民事関係法律適用法（最高人民法院公報）
With dual nationality, which is the national law?
Under Article 38, where the party holds two or more nationalities, the national law is the law of the country of nationality in which the party has a habitual residence, or failing that, the law of the country most closely connected with the party.
Article 39 adds that where the law of habitual residence governs but that habitual residence is unknown, the law of the place of residence applies. Dual nationality and unascertainable habitual residence are both common points of dispute, and they turn into questions of evidence.
Source: 法の適用に関する通則法（e-Gov 法令検索）
What actually changes if foreign law applies?
The existence and size of forced heirship, the order and shares of statutory heirs, and the division procedure can all differ. In addition, Article 42 disapplies a foreign provision where its application would be contrary to public policy or good morals.
The practical point is that the governing law and the taxing jurisdiction are two separate questions. Succession being governed by Japanese law does not mean Japan alone taxes it, and the reverse is equally true. The taxable perimeter is determined separately under the taxpayer categories in Article 1-3 of the Inheritance Tax Act.
Source: 法の適用に関する通則法（e-Gov 法令検索）
What this page does not cover
Determining the governing law in a specific case, drafting estate division agreements or wills, registration procedures, and proving the content of foreign law are the work of lawyers and judicial scriveners, and we do not perform them. Inheritance tax computation and filing fall under Article 2 of the Certified Tax Accountant Act and are handled by our partner licensed tax accountants. What we work on is the structural question where governing law and taxation bite at once: which entity holds what, and where those assets sit.
Primary sources
Related services and questions
- Succession Structuring
- China–Japan Cross-Border Wealth Structure
- The inheritance tax “10-year rule”
- Holding Japanese property personally or through a company
Get in touch
Where nationality, habitual residence and asset location all point in different directions, the room to design exists only before the succession occurs. ceo@seisei.tokyo
SEISEI provides financial and management consulting. It does not constitute tax representation, preparation of tax documents, or tax consultation as defined in Article 2 of Japan’s Certified Tax Accountant Act. Filings and tax computations are handled by partner licensed tax accountants (zeirishi).