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Japan to remove limit on overseas investment by startup funds

Portfolio cap seen hindering ability to attract foreign investors

Japan aims to increase annual investment in startups by more than tenfold by fiscal 2027. (Photo by Hirofumi Yamamoto)

TOKYO -- Japan intends to scrap a key restriction on overseas investments by domestic venture funds dedicated to backing startups, a move intended to attract more foreign investors into the sector.

Domestic startup funds currently must limit investment in foreign companies to less than 50% of their portfolio holdings. Ending this restriction would allow more flexibility in choosing investment targets, encouraging overseas money to flow into such Japanese funds.

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