Foreigners will have a hard time owning Japanese tech firms

(Image credit: Image source: Shutterstock/violetkaipa)

Foreign ownership of Japanese technology and telecommunications companies will soon be limited.

The country's government says the new rule, effective August 1, was drafted to ensure that technology deemed vital for national security does not leak to foreign countries.

Japan did not say if the move was made because of any specific company, but what we do know is that the announcement was made on the same day when US President Donald Trump was visiting Prime Minister Shinzo Abe in Tokyo.

“Based on increasing importance of ensuring cyber security in recent years, we decided to take necessary steps, including addition of integrated circuit manufacturing, from the standpoint of preventing as appropriate a situation that will severely affect Japan’s national security,” Japanese ministries said in a statement.

The US is locked in a trade war with China, and Huawei has found itself in the crosshairs. The company was recently put on a US black list of sorts, which resulted in many US companies cutting ties with Huawei.

Google, Qualcomm, Broadcom, were just the tip of the iceberg, and analysts are expecting these moves to leave a solid dent in Huawei's business. The Chinese telecommunications company was labelled a threat to national security, given that it builds 5G infrastructure which could be used by the Chinese government for spying.

Image source: Shutterstock/violetkaipa