Foreign companies collect Japanese B2B debt by starting with amicable negotiation, then escalating to the Tokusoku Tetsuzuki Summary Court payment order under Civil Procedure Code Articles 382-402, within the Minpo Article 166 limitation window of 5 years from knowledge or 10 years from accrual.
# Debt Collection Japan for Foreign Companies: Tokusoku Tetsuzuki and the 2020 Civil Code Reform
A foreign creditor chasing an unpaid invoice in Japan operates in a jurisdiction where the legal machinery is precise, the cultural sequencing is strict, and the statutes were rewritten in 2020 for the first time since 1896. Most English-language guidance still cites the old 5-year commercial limitation under the now-repealed Commercial Code Article 522, which is wrong. This briefing is current to the reformed Civil Code (Minpo).
| Item | Value | Statutory basis |
|---|---|---|
| Legal system | Civil law, German and French influence | Civil Code (Minpo) |
| Limitation period | 5 years from knowledge or 10 years from accrual, whichever is earlier | Minpo Art. 166 (2020 reform) |
| Statutory interest rate | 3% per year, reviewed every 3 years | Minpo Art. 404 (2020 reform) |
| Summary Court ceiling | JPY 1.4 million (approximately USD 9,000) | Court Act |
| Payment order procedure | Tokusoku Tetsuzuki, 2-week objection window | Civil Procedure Code Arts. 382-402 |
| Foreign judgment enforcement | Four-criteria test including reciprocity | Civil Procedure Code Art. 118 |
| Arbitral awards | Directly enforceable, New York Convention | Arbitration Act (Law No. 138 of 2003) |
| Commercial register | Houmu-kyoku, Legal Affairs Bureau | Ministry of Justice |
The 2020 Civil Code reform changed almost everything English articles still say
The reform of the Minpo came into force on 1 April 2020. It was the first material rewrite of Japanese contract and obligations law since the original code of 1896. Two points matter most for foreign creditors. First, limitation periods were harmonized under a single article. The old regime had a specific 5-year rule for commercial claims under Commercial Code Article 522, plus scattered shorter periods for specific debts. That patchwork is gone. Under Minpo Article 166, a commercial obligation is now time-barred at the earlier of: (a) 5 years from the date the creditor became aware of the right to demand performance, or (b) 10 years from the date the right to demand performance became exercisable. For an invoice with a fixed due date, the creditor is almost always deemed aware on that date, so the 5-year limb dominates in practice. Commercial Code Article 522 has been repealed. Second, the statutory legal interest rate under Minpo Article 404 fell from a fixed 5% per year to 3% per year, with a mandatory review every three years by the Minister of Justice. Foreign creditors accustomed to the EU Late Payment Directive (reference rate plus 8 percentage points) should note how modest this is. Contractual interest clauses remain enforceable and are strongly recommended in supply contracts with Japanese buyers.KEY INSIGHT
Foreign companies collect Japanese B2B debt by starting with amicable negotiation, then escalating to the Tokusoku Tetsuzuki Summary Court payment order under Civil Procedure Code Articles 382-402, wi
The court hierarchy and what actually hears your claim
Japan's civil courts run in a four-tier structure: 1. Summary Court (Kan'i Saibansho): civil claims up to JPY 1.4 million. Handles the Tokusoku Tetsuzuki payment order procedure. 2. District Court (Chiho Saibansho): general first instance for claims above the Summary Court ceiling. 3. High Court (Koto Saibansho): appeals. 4. Supreme Court (Saiko Saibansho): final appeal on points of law. A foreign creditor with a EUR 8,000 unpaid invoice files at the Summary Court. A foreign creditor with a EUR 200,000 claim files at the District Court. The Tokusoku payment order is a Summary Court product regardless of claim size up to its ceiling.Can debt collectors collect overseas?
Yes. A foreign creditor can pursue a Japanese debtor either directly through Japanese counsel admitted to practise before Japanese courts, or through a cross-border collection operator with Japanese legal partners. The claim is pursued under Japanese substantive law unless a valid choice-of-law clause selects otherwise, and always under Japanese procedural law if the forum is Japan. Foreign judgments may also be enforced in Japan under Civil Procedure Code Article 118 if the four statutory criteria are met.Can debt collectors chase you abroad?
A creditor domiciled in Japan can pursue a debtor located outside Japan by either obtaining a Japanese judgment and seeking exequatur in the debtor's country of domicile, or by instructing local counsel where the debtor is located and pursuing under that jurisdiction's law. The reverse is equally true: a European, North American, or GCC creditor can pursue a Japanese debtor inside Japan through the Tokusoku Tetsuzuki or ordinary civil procedure routes. The question is never whether it is possible but whether the cost-to-claim ratio and evidentiary posture support the action.Tokusoku Tetsuzuki: the Japanese payment order in detail
The Tokusoku Tetsuzuki (督促手続) is Japan's equivalent of a fast-track payment order. It lives in Civil Procedure Code Articles 382 to 402. The mechanics: - The creditor files a tokusoku meirei application with the Summary Court having territorial jurisdiction over the debtor's domicile. - The application is processed without a hearing and without notice to the debtor at the application stage. - The court issues a payment demand order (shiharai tokusoku) which is then served on the debtor. - The debtor has 2 weeks from the date of service to file an objection (igi). Filing an objection automatically converts the matter into ordinary civil proceedings at the competent court. - If no objection is filed within the window, the creditor may apply for a provisional enforcement order (kari shikko sengen). Once issued, the order has the force of an enforceable title and supports compulsory execution against the debtor's assets. The procedure is document-only, inexpensive, and fast when the debtor does not respond. It is the first-choice formal lever when amicable negotiation has failed and the claim is clean. It is a poor tool for disputed claims because objection is trivial and simply resets the matter into ordinary litigation.| Attribute | Tokusoku Tetsuzuki | Ordinary civil suit |
|---|---|---|
| Forum | Summary Court (debtor's domicile) | Summary Court or District Court by value |
| Hearing at issue | None | Yes |
| Debtor notice before order | None | Yes, with statement of claim |
| Typical time to enforceable title (undisputed) | ||
| Debtor objection window | 2 weeks from service | Statement of defence per court schedule |
| Outcome if disputed | Converts to ordinary suit automatically | Proceeds on the merits |
| Court fees | Reduced relative to ordinary suit | Full scale by claim value |
Foreign judgment enforcement under Civil Procedure Code Article 118
A foreign creditor holding a judgment from, say, a German Landgericht or a New York court can enforce it in Japan, but only through an exequatur action under Article 118 of the Civil Procedure Code. The Japanese court will not re-try the merits but it will verify four criteria: 1. The jurisdiction of the foreign court was properly founded under Japanese private international law. 2. The defendant was properly served (the service-of-process requirement is strict and is the most common failure point for foreign creditors). 3. The content of the foreign judgment is not contrary to Japanese public policy or good morals (koujo ryouzoku). 4. There is mutual guarantee of reciprocity with the foreign country. Point 4 is satisfied for most OECD jurisdictions (Germany, France, UK, Switzerland, Australia, Canada, Korea, Taiwan, and the US state courts that have recognized Japanese judgments in practice). Points 2 and 3 are where foreign creditors most often lose, typically because substituted service or Hague Convention channels were not correctly followed. Arbitral awards are a different and easier story. Japan is a party to the New York Convention. Foreign arbitral awards are directly enforceable under the Arbitration Act (Law No. 138 of 2003) without the reciprocity analysis required for judgments. For that reason, foreign suppliers with a non-trivial volume of Japanese business often prefer arbitration clauses seating the tribunal in Tokyo, Singapore, or Hong Kong.Information gain: what almost every competing article gets wrong
The information-gain payload of this briefing is concrete. Most English-language guidance on Japanese collection still cites: - The old 5-year commercial limitation period under Commercial Code Art. 522. Repealed. The rule is now the Minpo Art. 166 dual test (5 years from knowledge or 10 years from accrual, whichever is earlier). - The old 5% statutory interest rate under the pre-reform Minpo. Reduced to 3% under the amended Art. 404, with triennial review by the Minister of Justice. - The old Commercial Code bilateral obligations articles. Restructured into the Civil Code. If your internal credit policy or your standing instructions to Japanese counsel still reference the pre-2020 regime, update them.The cultural sequencing rule: amicable first, legal second
Japanese commercial culture strongly prefers amicable resolution, consensus, and face-preservation. Aggressive formal escalation is seen as the last resort and can terminate a business relationship permanently. Foreign creditors who instruct Japanese counsel to send a hard demand letter before attempting a measured amicable approach often destroy the receivable and the account. The correct sequence is: 1. Amicable phase by a bilingual operator with Japanese business etiquette, structured as a polite request for reconciliation of accounts. 2. Soft-formal phase with a written statement of account and proposed payment plan. 3. Hard-formal demand on counsel letterhead, only if phases 1 and 2 fail. 4. Tokusoku Tetsuzuki or ordinary suit, only if the hard-formal demand is refused or ignored. This sequencing is not sentimentality. It is the difference between collecting the debt and losing the customer with an unpaid debt still outstanding.When This Is Not For You
This service is not appropriate if:
- Your claim is below JPY 200,000 and uncontested. At that size, Japanese Summary Court self-service options or a direct lawyer instruction may be more cost-efficient than a cross-border engagement.
- You need punitive damages. Japanese civil courts do not award punitive damages. Your compensable loss is contractual and statutory only.
- Your debtor is already in bankruptcy or civil rehabilitation. Collection efforts switch to creditor claim filing in the insolvency estate, which is a different workflow.
- Your contract governs a consumer transaction. InterStation handles B2B only. Consumer collection in Japan is governed by additional protective statutes we do not practise in.
How InterStation Handles a Japan Collection Case
1. Intelligence file: we verify the debtor company against the Houmu-kyoku commercial register, confirm its current legal representative, registered capital, and any filed changes. We cross-reference trade references and any public notices. 2. Cultural-sequenced amicable contact: a bilingual operator makes first contact in Japanese, frames the matter as a reconciliation of accounts, and opens a channel to the right counterparty inside the debtor. No threats, no deadlines in the first contact. 3. Structured negotiation: we propose a documented payment plan or lump-sum settlement, in writing, with an acceptance window measured in business days. The statement of account is prepared to Japanese audit conventions. 4. Legal escalation if required: on failure of the amicable phase, we instruct Japanese counsel to file a Tokusoku Tetsuzuki application at the debtor's Summary Court, or an ordinary civil suit at the District Court if the claim value exceeds the ceiling or if the matter is likely to be disputed. 5. Enforcement and collection: once an enforceable title is in hand, we coordinate provisional seizure (kari sashiosae) or compulsory execution (kyosei shikko) against bank accounts, receivables, or movable assets, and the client is paid out from our trust account on settlement or execution. InterStation's cross-border collection model sits inside a broader international collection operation that our [international debt collection intelligence](/blog/interstation-international-debt-collection-intelligence) team coordinates across jurisdictions, and it benefits from the same [debtor investigation](/blog/interstation-debtor-investigation-international) discipline we apply to German Mahnverfahren cases and other civil-law forums. For claims where the Japanese debtor may also have assets in a neighbouring jurisdiction, we handle the conflicts-of-law sequencing inside our standard [cross-border skip tracing](/blog/interstation-skip-tracing-cross-border) workflow and coordinate with [legal escalation](/operations/legal-escalation) and [amicable collection](/operations/amicable-collection) at the operational level.FAQ
Can debt collectors collect overseas from a Japanese debtor?
Yes. A foreign creditor can pursue a Japanese debtor through Japanese counsel or through a cross-border operator with Japanese legal partners. The claim is brought under Japanese procedural law via the Tokusoku Tetsuzuki payment order under Civil Procedure Code Arts. 382-402 or through an ordinary civil suit at the District Court.
Can debt collectors chase you abroad if you leave Japan?
Yes. A Japanese creditor can obtain a Japanese judgment and seek enforcement against a debtor domiciled abroad, subject to the destination country's exequatur procedure and any applicable convention. The reverse also holds: a foreign creditor can enforce a qualifying foreign judgment in Japan under Civil Procedure Code Art. 118, provided the four statutory criteria including reciprocity are met.
What is the limitation period for a commercial claim in Japan after the 2020 reform?
Under Minpo Article 166, as amended and in force from 1 April 2020, a commercial claim is time-barred at the earlier of 5 years from the date the creditor became aware of the right to demand performance, or 10 years from the date the right to demand performance became exercisable. The old Commercial Code Article 522 5-year rule has been repealed.
What is the Tokusoku Tetsuzuki payment order procedure?
The Tokusoku Tetsuzuki is the Japanese payment order procedure under Civil Procedure Code Articles 382-402. The creditor files a tokusoku meirei application with the Summary Court. The court issues a demand order without a hearing. The debtor has 2 weeks from service to object. If no objection is filed, the creditor may obtain a provisional enforcement order supporting compulsory execution.
Can debt collectors chase you abroad?
Yes. Japanese creditors pursue overseas debtors through licensed local partners in the debtor’s jurisdiction. Foreign creditors pursuing Japanese debtors instruct Japanese counsel who can use the Tokusoku Tetsuzuki (summary payment demand) under Articles 382-402 of the Civil Procedure Code.
Contact
Foreign creditors with an unpaid Japanese invoice need the file opened with the correct statutory framing from day one: Minpo Article 166 for the limitation analysis, Article 404 for the interest calculation, and the Tokusoku Tetsuzuki sequencing only after a culturally calibrated amicable phase. Our Japan desk runs this as a standing intelligence operation, not a one-off assignment. [Contact Us, Free Review](/contact).Sources and Legal References
1. Civil Code of Japan (Minpo), as amended by the 2020 reform in force 1 April 2020: https://www.japaneselawtranslation.go.jp/law/detail/?id=3494
2. Civil Procedure Code of Japan (Minji Soshoho): https://www.japaneselawtranslation.go.jp
3. Japan Arbitration Act, Law No. 138 of 2003: https://www.japaneselawtranslation.go.jp/law/detail/?id=2352
4. Ministry of Justice, Legal Affairs Bureau (Houmu-kyoku) commercial register online portal: https://www1.touki.or.jp
5. New York Convention status, UNCITRAL: https://uncitral.un.org/en/texts/arbitration/conventions/foreign_arbitral_awards/status2
6. Ministry of Justice of Japan, guidance on the 2020 Civil Code reform: https://www.moj.go.jp