Identity verification for non-resident Chinese-speaking buyers (the AML Act): a real estate agent's customer checks and beneficial owner

In short: even for a non-resident buyer, a real estate agent that concludes, acts as agent for, or brokers a Japanese property sale cannot skip the transaction-time verification under Article 4 of the Act on Prevention of Transfer of Criminal Proceeds (the "AML Act"). You confirm the customer-identifying matters, the purpose of the transaction and the occupation or business; where the buyer is a corporation, you confirm its beneficial owner; and you keep the verification record and the transaction record for seven years.

This is for the on-the-ground professionals in mainland China, Taiwan and Hong Kong who support Japanese property purchases, and for their non-resident buyer clients. It covers only the transaction-time verification a real estate agent itself performs under the AML Act — identity checks, the beneficial owner, record retention and suspicious-transaction reporting. Overseas remittance procedures and tax go to a licensed tax accountant; transfer-of-ownership and inheritance registration to a judicial scrivener; disputes such as contract trouble to an attorney — each routed separately. How to read the important-matters explanation is in the key points of the important-matters explanation before introducing a Japanese income property to a Chinese-speaking buyer; contract-clause misunderstandings are in the clauses Chinese-speaking buyers misread in a Japanese sale contract.

Is transaction-time verification required even for a non-resident buyer?

Yes. Regardless of nationality or residence, when a real estate agent concludes, acts as agent for, or brokers a sale of land or buildings, it must perform the transaction-time verification under Article 4 of the AML Act.

A real estate transaction agent is a specified business operator listed in Article 2, paragraph 2 of the AML Act (Act No. 22 of 2007). The sale of land or buildings, or agency or brokerage for it, is the specified business, and concluding, acting as agent for, or brokering a sale is the specified transaction subject to verification (brokerage of a lease is not subject to transaction-time verification).

Point	Content
Who performs it	The real estate transaction agent (a specified business operator; AML Act Art. 2(2))
For which transaction	Concluding / agency / brokerage of a sale of land or buildings (a specified transaction)
What is confirmed	Customer-identifying matters, purpose of the transaction, occupation or business (and the beneficial owner for a corporation)
Non-residents / foreigners	The same duty applies regardless of nationality or residence

Whether the customer is a resident or non-resident, Japanese or foreign, does not change whether verification is required. It cannot be skipped for a non-resident foreign buyer; rather, the point to watch is that the type of identity document and the verification method differ from a resident's arrangements.

How are the customer-identifying matters verified (a foreigner with no residence card, or a passport)?

For a natural person, confirm the name, residence and date of birth — for example by being shown a photo-bearing identity document. A non-resident foreigner with no residence card is confirmed with a passport or the like, as a rule.

Article 4, paragraph 1 of the AML Act requires, as the content of verification, confirmation of (1) the customer-identifying matters, (2) the purpose of the transaction and (3) the occupation (natural person) or business (corporation). The customer-identifying matters are, for a natural person, name, residence and date of birth; for a corporation, the name and the location of the head or principal office. The details of the method are set by the AML Act's enforcement regulations and the MLIT guidance.

Customer category	Examples of main identity documents	Note
Japanese resident (natural person)	Driver's licence, My Number card, residence card, etc. (photo-bearing)	In person, being shown the document is the basic method
Non-resident foreigner with no residence card	Passport, etc.	Confirm name and date of birth; confirm the residence as an address in the home country, etc.
Non-face-to-face verification	Sending documents + non-forwarding mail, eKYC, etc.	Limited options for a non-resident with no address in Japan

A non-resident foreigner has no residence in Japan, so the residence is confirmed as an address in the home country or the like. Where an in-person transaction is difficult, methods such as receiving a copy of the identity document and then sending non-forwarding mail are used, but the options are limited for a non-resident with no address in Japan, so the verification steps must be worked back from the settlement date. Exactly which documents and methods can be used is confirmed case by case against the enforcement regulations and the MLIT guidance.

When the buyer is a corporation, how far is the beneficial owner confirmed?

For a company that decides by capital majority (such as a stock company), you confirm the natural person holding, directly or indirectly, more than 25% of the total voting rights as the beneficial owner. If there is none, confirm the natural person who substantially controls the management; if still none, the representative, etc.

Where the buyer is a corporation, Article 4(1)(iv) of the AML Act requires confirming the customer-identifying matters of the natural person in a relationship enabling substantial control of the corporation's management (the beneficial owner). Who the beneficial owner is, is set by the enforcement regulations.

Type of corporation	How to identify the beneficial owner (judged in stages)
Stock company / capital-majority corporation	(1) Natural person holding directly/indirectly more than 25% of voting rights → (2) if none, the natural person who substantially controls management → (3) if still none, the representative, etc.
General incorporated association/foundation, etc.	(1) A natural person receiving more than 25% of distributions, or who substantially controls the business → (2) if none, the representative, etc.
Method of confirmation	Confirmed by receiving a declaration from the corporation's representative, etc.

The beneficial owner is traced all the way back to a natural person. Where holding is through an overseas holding company or trust, you trace the layers to find the natural person above 25%, so you request the shareholder register and materials showing the equity relationship, working with the local professional. The judgment of who the beneficial owner is rests on the facts of the equity relationship; we confine ourselves to confirming the facts. Whether to hold in a corporate or individual name is set out separately in should Chinese and Taiwanese buyers hold a Japanese income property through a company or as individuals.

When is a suspicious-transaction report required?

When there is a suspicion that the property received is criminal proceeds, or a suspicion that the customer is concealing criminal proceeds, you report promptly to the administrative authority. For a real estate agent, the report goes to the Minister of Land, Infrastructure, Transport and Tourism (the regional bureau, etc.).

Article 8 of the AML Act requires a specified business operator, for a transaction in its specified business, to report promptly to the administrative authority where there is a suspicion that property received is criminal proceeds, or a suspicion that the customer is engaged in concealment, etc. of criminal proceeds. The judgment is made by weighing the manner of the transaction, the customer's attributes and the like; as a rough guide, the state and JAFIC (the National Police Agency's AML office) publish reference cases.

Point	Content
When to report	When you recognise a suspicion that the property received is criminal proceeds, or that the customer is concealing, etc.
Where to report	The administrative authority (for a real estate agent, the MLIT Minister = the competent regional bureau, etc.)
No tipping off	You must not leak to the customer or related persons that you intend to report, etc. (AML Act Art. 8(3))

Leaking to the customer or related persons that you intend to, or did, report is prohibited. Because the final application of "suspicious" depends on the individual facts, this article asserts no specific applicability.

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For how many years are the verification record and transaction record kept?

The verification record is kept for seven years from "the day the contract for the specified transaction ended or another day set by the competent ministry's ordinance", and the transaction record for seven years from "the day the transaction was carried out".

Article 6 of the AML Act requires creating a verification record when transaction-time verification is performed and keeping it for seven years from the day the contract ended, etc.; Article 7 requires creating a transaction record for a transaction in the specified business and keeping it for seven years from the day the transaction was carried out.

Type of record	Basis	Start of the retention period
Verification record (content/method of verification, etc.)	AML Act Art. 6	Seven years from the day the contract for the specified transaction ended, etc.
Transaction record (date of the transaction, value of the property, etc.)	AML Act Art. 7	Seven years from the day the transaction was carried out

The retention duty is the same for a transaction with a non-resident buyer. Copies of identity documents, declarations and beneficial-owner materials — even where languages are mixed — are organised and kept on the Japan side. Where copies are shared with the local professional after settlement, the arrangement is decided before the transaction.

Overseas remittance, tax, registration and disputes beyond the verification — who do you consult?

The transaction-time verification, record retention and suspicious-transaction reporting a real estate agent performs are ours; the rest is divided.

Investigation of the Japan-side property, the important-matters explanation, adjusting price and terms, brokerage and the sale contract, and the AML Act transaction-time verification and record retention, are undertaken by Yotsuba Real Estate Co., Ltd. (licensed real estate agent, Tokyo Governor (1) No. 113304), with support materials in Traditional and Simplified Chinese. The local professional (in mainland China, Taiwan or Hong Kong) and we are each independent business entities. Where roles overlap, we make clear before the contract who does what, and you engage each separately.

Checks on overseas remittance and receipt of funds go to the transaction bank; tax on acquisition, holding and transfer and the tax-agent notification to a licensed tax accountant; transfer-of-ownership and inheritance registration to a judicial scrivener; disputes such as contract trouble to an attorney — each engaged by you directly. We neither accept nor pay referral fees or introduction commissions. Consultation is free of charge. The settlement arrangements at purchase are in can non-resident Chinese-speaking buyers get an apartment loan on a Japanese income property; the whole picture of investment and business property is at investment and business property consultation.

Frequently asked questions

Q. Is transaction-time verification required even for a non-resident buyer paying all cash?
A. Yes. Transaction-time verification attaches to the type of transaction — "concluding/agency/brokerage of a sale of land or buildings" — not to the payment method (AML Act Art. 4). Even with a cash settlement, you confirm the customer-identifying matters, the purpose and the occupation or business, and the beneficial owner for a corporation. If anything, a large cash settlement is a situation to consider case by case whether a suspicious-transaction report (Art. 8) is due.

Q. What verifies the identity of a buyer living abroad with no residence card?
A. A non-resident foreigner with no residence card is confirmed, as a rule, with a passport or the like for name and date of birth, and the residence is confirmed as an address in the home country, etc. Where an in-person meeting is difficult, non-face-to-face methods are limited for a non-resident with no address in Japan. Which documents and methods can be used is confirmed against the enforcement regulations and the MLIT guidance, and the steps are worked back from the settlement date.

Q. When the buyer is a foreign corporation, how far back is the beneficial owner traced?
A. All the way to a natural person. For a stock company or other capital-majority corporation, the beneficial owner is the natural person holding, directly or indirectly, more than 25% of voting rights. Where holding is through a holding company or trust, you trace the layers to identify it, requesting the shareholder register and equity materials in cooperation with the local professional. If there is none, confirm the natural person who substantially controls management; if still none, the representative, etc.

Q. Once the transaction is over, may the verification records be disposed of?
A. No. The verification record is kept for seven years from the day the contract ended, etc. (AML Act Art. 6), and the transaction record for seven years from the day the transaction was carried out (Art. 7). The same applies to a transaction with a non-resident buyer. Copies of identity documents and beneficial-owner materials are organised and kept on the Japan side.

Sources (primary)

• e-Gov "犯罪による収益の移転防止に関する法律" (Act on Prevention of Transfer of Criminal Proceeds) — Act No. 22 of 2007. Art. 2(2) (specified business operators, including real estate transaction agents); Art. 4 (transaction-time verification — customer-identifying matters, purpose, occupation/business, the corporation's beneficial owner); Art. 4(2) (stricter verification for high-risk transactions); Art. 6 (creation/retention of the verification record — seven years from the day the contract ended, etc.); Art. 7 (creation/retention of the transaction record — seven years from the day the transaction was carried out); Art. 8 (suspicious-transaction reporting; (3) prohibits tipping off the customer). Accessed 12 September 2026.
• MLIT, "Overview of the Act on Prevention of Transfer of Criminal Proceeds" (Real Estate Business Division, April 2026) — explanation of transaction-time verification, record retention and suspicious-transaction reporting for real estate transaction agents. Accessed 12 September 2026.
• National Police Agency, JAFIC (AML office) — reference cases on transaction-time verification, the beneficial owner and suspicious transactions for specified business operators. Accessed 12 September 2026.

The concrete method of transaction-time verification, which identity documents may be used, the application of the beneficial-owner test and the applicability of a suspicious-transaction report vary with the AML Act's enforcement regulations, the MLIT guidance and the individual facts; this article asserts no specific document eligibility or reporting applicability (individual judgment is treated as unverified). Overseas remittance and receipt of funds are for the transaction bank; tax and the tax-agent notification for a licensed tax accountant; transfer-of-ownership and inheritance registration for a judicial scrivener; disputes for an attorney. This article is general information and does not offer an individual legal or tax determination; the final judgment is made by each qualified professional. Investigation, the important-matters explanation, brokerage and the sale contract on the Japan side, and the AML Act transaction-time verification, are undertaken by Yotsuba Real Estate Co., Ltd. (licensed real estate agent), which works with local professionals as independent business entities engaged separately. There are no referral or introduction fees.

About the author

Joji Uramatsu — licensed real estate transaction specialist (Tokyo Governor registration No. 293544) and administrative scrivener (registration No. 25087022). Representative Director, Yotsuba Real Estate Co., Ltd. (licensed real estate agent, Tokyo Governor (1) No. 113304); principal, Yotsuba Administrative Scrivener Office. Kohinata, Bunkyo, Tokyo, about five minutes' walk from Myogadani station. Supporting materials in Traditional and Simplified Chinese, mapping the transaction-time verification to the statute and the national guidance for Chinese-speaking buyers and their local professionals. Full profile: author page.