What requirements must you meet to enter farming as a farmland-owning eligible corporation?

In short: for a corporation to "own" farmland and enter farming, it must meet all the requirements for a farmland-owning eligible corporation set out in Agricultural Land Act Article 2(3). There are four main requirements: (1) the main business is farming (including related business) — the business requirement; (2) farming-related persons hold a majority of the total voting rights — the members/voting-rights requirement; (3) a majority of the officers (directors, etc.) are members who engage regularly in the corporation's farming (as a rule 150 days a year or more) — the regular-engagement requirement; and (4) at least one officer or important employee engages in farm work (as a rule 60 days a year or more) — the farm-work requirement. The corporate form is also limited to three types: a farmers' cooperative corporation, a stock company (one that is not a public company), or a membership company. This system was formerly called an "agricultural production corporation"; it was reviewed in name and requirements by the Act partially amending the Agricultural Cooperatives Act and others (Act No. 63 of 2015) and became the "farmland-owning eligible corporation" from 1 April 2016. Whether to grant the permit for acquiring the farmland itself (Agricultural Land Act Article 3) is a judgement of the agricultural committee; registration for incorporation, officer changes and capital increases is by a judicial scrivener; corporate tax, consumption tax and deferred-tax treatment by a tax accountant; and disputes by an attorney, each as an independent business under a separate contract. Yotsuba Administrative Scrivener Office and Yotsuba Real Estate Co., Ltd. are separate businesses, and our office receives no referral fee. This article is general information; whether a particular case meets the requirements and the prospects for a permit rest with a qualified professional and the agricultural committee.

What is a farmland-owning eligible corporation, and how does it differ from an ordinary company?

A farmland-owning eligible corporation is the collective term, defined in Agricultural Land Act Article 2(3), for a corporation that may acquire ownership or a lease right over farmland and carry on its own farm management. The biggest difference from an ordinary company is "whether it can own farmland." Agricultural Land Act Article 3(2)(ii) provides that a permit cannot be granted where a corporation other than a farmland-owning eligible corporation seeks to acquire ownership or the like of farmland, so an ordinary stock company cannot, as it is, buy farmland. To hold and cultivate farmland in a company's name, it must fall within this eligible-corporation frame.

Another feature is that the corporate form is limited. Only three types can be a farmland-owning eligible corporation: a farmers' cooperative corporation; a stock company (one that is not a public company under the Companies Act — that is, limited to a company all of whose shares carry transfer restrictions); and a membership company (a general partnership company, a limited partnership company, or a limited liability company). A public company, whose shares can be freely transferred, is excluded because the corporation cannot control who its members are.

Note that before 1 April 2016 this system was called an "agricultural production corporation." The review by Act No. 63 of 2015 (the Act partially amending the Agricultural Cooperatives Act and others) changed the name to "farmland-owning eligible corporation" and relaxed some of the voting-rights and officer requirements. Because older materials still say "agricultural production corporation," be mindful of the period when reading.

What are the business, members and voting-rights requirements to be met?

The requirements are divided among the items of Agricultural Land Act Article 2(3). First, as the business requirement, the corporation's main business must be farming (including related business such as the processing and sale of farm produce, or forestry carried on together with farming). In practice this is judged by whether, over a recent business year or so, farming and related business make up a majority of sales. Next, as the members/voting-rights requirement, certain farming-related persons must hold a majority — of the voting rights of all shareholders for a stock company, or of the members for a membership company.

The "farming-related persons" who must hold a majority of the voting rights include the following.

Category	Examples
Business requirement	The main business is farming (including related business)
Persons who should hold voting rights	Individuals who provided rights over farmland to the corporation, persons who engage regularly in the corporation's farming, the Farmland Consolidation Bank, local governments and agricultural cooperatives, etc.
Proportion of voting rights	The above persons hold a majority of the total voting rights (members)
Corporate form	Farmers' cooperative corporation, stock company (not a public company), or membership company

Because of this requirement, a company in which investors with no connection to farming hold a majority of the voting rights cannot become an eligible corporation. Even where you want to raise wide investment, you must design the share classes and investment ratios so that farming-related persons keep a majority on a voting-rights basis.

Is there a requirement that officers engage in farming or farm work?

Yes. The requirement on people has two tiers. First, a majority of the officers (directors of a stock company, executive members of a membership company, directors of a farmers' cooperative corporation, etc.) must be members who engage regularly in the corporation's farming. Whether engagement is "regular" is judged by the yardstick of, as a rule, engaging in the corporation's farming 150 days a year or more. Second, at least one of the officers or important employees (such as a farm manager) must engage in the farm work needed for the corporation's farming. This has a yardstick of, as a rule, 60 days a year or more.

This "farm work" requirement is the part relaxed in the 1 April 2016 review. Previously a majority of the officers who engaged regularly had to engage in farm work; but as the weight of processing and sales rises through sixth-industrialisation, the share of officers going out to do farm work inevitably falls, so it was changed so that it is enough for at least one officer or important employee to engage in farm work. It is important in practice to keep records of who engaged for how many days, so that this can be confirmed later.

How does this relate to the permit for acquiring farmland (Agricultural Land Act Article 3)?

Meeting the requirements for a farmland-owning eligible corporation and actually obtaining the permit to acquire specific farmland are separate procedures. To transfer ownership of farmland, or to set up or transfer a use-and-profit right such as a lease right, the parties must obtain the permit of the agricultural committee (Agricultural Land Act Article 3(1)). A right transfer made without the permit has no effect. In other words, "being an eligible corporation" is the qualification at the entrance, and the agricultural committee examines individually whether "this farmland may be acquired."

In the examination, the committee looks at whether, after acquisition, all of the farmland will be used efficiently for cultivation, and whether there would be any hindrance to farmland use in the surrounding area. As the premise for a corporation to own farmland, Article 3(2)(ii) above requires it to be a farmland-owning eligible corporation. On the other hand, if the corporation only "leases" farmland, even a general corporation that is not a farmland-owning eligible corporation can enter farming, provided it meets the requirements of Agricultural Land Act Article 3(3) (making the contract one subject to a condition of termination, sharing roles appropriately with local farmers to carry on farming continuously, and having at least one executive officer engage regularly in farming). The point that the entry qualification differs for ownership and leasing should be checked first when designing entry. Relatedly, the permit for converting farmland to non-farmland use is covered in The flow of Articles 4 and 5 farmland-conversion permits, and the notification to the agricultural committee when farmland is acquired by inheritance in Notification to the agricultural committee of inherited farmland (Agricultural Land Act Article 3-3).

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When a general corporation converts, what does it change in its articles or structure?

To bring an existing stock company or the like within the frame of a farmland-owning eligible corporation, you shape the company to fit the four requirements above. For example, if it is a public company, it must amend its articles to put transfer restrictions on all shares and become a stock company that is not a public company. You set farming and related business as the business purpose and chart a course for the sales reality to meet the business requirement. You also review the shareholder makeup — the investment ratios and share classes — so that farming-related persons hold a majority of the voting rights. As for officers, you appoint them so that a majority are members who engage regularly in farming, and you secure an officer or important employee who engages in farm work.

Such amendment of the articles and arrangement of the shareholder and officer structure are themselves preparation for meeting the requirements. The order is: after meeting the requirements, you apply to the agricultural committee for an Article 3 permit for the individual farmland. Yotsuba Administrative Scrivener Office (administrative scrivener) handles, as an independent business, the information and drafting support for the draft articles, the arrangement of the business, and the documents for the permit application. The final judgement on whether the requirements are met, for the permit, is made by the agricultural committee.

Who should you consult for incorporation registration, the permit, and tax?

Entering farming divides by role among the entrance qualification, the individual permit, registration and tax.

• Arranging the articles, support in preparing documents toward the business, members and officer requirements, and support (information) for the permit application to the agricultural committee → Yotsuba Administrative Scrivener Office (administrative scrivener)
• The permit judgement on whether specific farmland may be acquired or leased (Agricultural Land Act Article 3) → the agricultural committee
• Registration for incorporation, and for officer changes, capital increases and amendments to the articles → a judicial scrivener
• Judgement of tax matters such as corporate tax, consumption tax and the deferral of tax on farmland → a tax accountant
• Acting for, and individual legal judgement on, a dispute over the requirements or the permit → an attorney

A farmland-owning eligible corporation is a qualification — "a corporation that can own farmland" — and keeping it also involves ongoing management such as annual reporting. Yotsuba Administrative Scrivener Office handles, as an independent business, the arrangement of the requirements and support for the permit application; registration is by a judicial scrivener, tax by a tax accountant, disputes by an attorney, and consultation on using the farmland and surrounding real estate by Yotsuba Real Estate Co., Ltd. (a separate business), each under a separate contract. Yotsuba Administrative Scrivener Office and Yotsuba Real Estate Co., Ltd. are separate businesses. Our office receives no referral fee. For the scope of services see Services; for the flow of engagement, Engagement Flow; and for fees, Fee Schedule. The final judgement on whether the requirements are met and whether a permit will issue is made by a qualified professional and the agricultural committee in light of the circumstances.

FAQ

Q. Can an ordinary stock company, as it is, buy farmland?
A. No. Under Agricultural Land Act Article 3(2)(ii), a corporation other than a farmland-owning eligible corporation cannot acquire ownership or the like of farmland, so to own farmland in a company's name it must meet the requirements for a farmland-owning eligible corporation under Agricultural Land Act Article 2(3). That said, if it only "leases" farmland, even a general corporation can enter farming if it meets the conditions of Agricultural Land Act Article 3(3).

Q. Is the company form that can be a farmland-owning eligible corporation fixed?
A. Yes. Only three types: a farmers' cooperative corporation; a stock company (one that is not a public company under the Companies Act — a company all of whose shares carry transfer restrictions); and a membership company (general partnership, limited partnership, or limited liability company). A public company, whose shares can be freely transferred, does not qualify.

Q. Must all officers do farm work?
A. Not all. A majority of the officers (directors, etc.) must be members who engage regularly in the corporation's farming (as a rule 150 days a year or more), and on top of that at least one officer or important employee must engage in farm work (as a rule 60 days a year or more). In the 2016 review, the farm-work requirement was relaxed to allow just one or more.

Q. Are "agricultural production corporation" and "farmland-owning eligible corporation" different things?
A. As a system they are the same line, with a changed name. By the review under Act No. 63 of 2015, from 1 April 2016 the "agricultural production corporation" was renamed the "farmland-owning eligible corporation," and the voting-rights and officer requirements were also relaxed in part.

Sources (Primary Information)

• e-Gov Law Search, "Agricultural Land Act" (Act No. 229 of 1952), Article 2(3) (definition of a farmland-owning eligible corporation and the business, members, voting-rights and officer requirements), Article 3(1), (2)(ii) and (3) (permit for right transfers, the restriction on acquisition by corporations, and the leasing special rule) (accessed 2026-11-07)
• Act partially amending the Agricultural Cooperatives Act and others (Act No. 63 of 2015; renaming from agricultural production corporation to farmland-owning eligible corporation and review of requirements; in force from 1 April 2016) (accessed 2026-11-07)
• Ministry of Agriculture, Forestry and Fisheries, "Requirements for corporations that may own farmland (farmland-owning eligible corporations)" and other explanatory materials on the farmland system (yardsticks for the business, voting-rights and officer requirements — regular engagement as a rule 150 days, farm work as a rule 60 days; maff.go.jp) (accessed 2026-11-07)

This article is general information and does not guarantee, for a particular corporation or parcel of farmland, whether it meets the requirements for a farmland-owning eligible corporation or whether an Agricultural Land Act Article 3 permit is possible. Whether the business, members, voting-rights and officer requirements are met, and whether individual farmland may be acquired or leased, are individual judgements based on the facts, and the agricultural committee decides whether a permit issues. Arranging the articles and support for the permit application are by Yotsuba Administrative Scrivener Office (administrative scrivener); registration for incorporation and changes by a judicial scrivener; judgement of tax matters such as corporate tax, consumption tax and deferred tax by a tax accountant; acting for, and individual legal judgement on, disputes over the requirements or the permit by an attorney; and consultation on using farmland and surrounding real estate by Yotsuba Real Estate Co., Ltd., each as an independent business under a separate contract. Yotsuba Administrative Scrivener Office and Yotsuba Real Estate Co., Ltd. are separate businesses. Our office receives no referral fee. Individual judgements are made by a qualified professional after a meeting. Written by Joji Uramatsu, administrative scrivener and licensed real estate broker.