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  5. Formulation of the Model Investment Limited Partnership Agreement with Commentary (2025 Version)

Formulation of the Model Investment Limited Partnership Agreement with Commentary (2025 Version)

Japanese

June 23, 2025

External Economic Policy

The Ministry of Economy, Trade and Industry formulated the Model Investment Limited Partnership Agreement with Commentary (2025 Version) as a new model LPA succeeding the Model Investment Limited Partnership Agreement released in 2010.

1. Background

Since the establishment of the system of the investment limited partnership under the Investment Limited Partnership Act of Japan (JLPS), METI has made various efforts to promote it. Formulation and publication of model investment limited partnership agreements (model LPAs) are part of such efforts.

The model LPAs have been formulated and publicized with the aim of serving as easy-to-use drafts that are satisfactory in terms of the current situation of practices at the time of the formulation so that costs for concluding an agreement to form a JLPS will be reduced.

METI previously made available two model LPAs, the 2010 version and the 2018 version. The 2010 version was formulated without specifying the types of investment funds expected to be the users, and the 2018 version was formulated mainly for venture capitals. While the 2010 version was often utilized for establishing buyout funds and other private equity funds, it became more and more difficult for the version to play a role as a model LPA because the passage of more than 14 years from its formulation created gaps between it and current practices in Japan and overseas.

Given the above situation, METI set up the Expert Committee for Drafting a New Model LPA (Model LPA Committee) to formulate a new model LPA to replace the 2010 version. With the cooperation of attorneys at law and certified public accountants who are members of the Model LPA Committee, METI has completed the Model Investment Limited Partnership Agreement with Commentary (2025 Version) (Model LPA 2025).

2. Outline of the Model LPA 2025

The Model LPA 2025 consists of the five parts outlined below. Part I, Part III, Part IV, and the appendices to Part V are model agreements that are expected to be used as rough drafts for negotiation only and need to be revised based on the policies and characteristics of the relevant investment fund. When preparing an actual agreement using the model agreement as a sample, advice should be sought from an attorney, certified public accountant and other experts with knowledge of investment fund practices, as necessary.

Part I: Model Investment Limited Partnership Agreement (Japanese Version)

This is a model LPA in Japanese expected to be used by businesses that intend to newly establish an investment fund by using a JLPS as an investment vehicle with a view to receiving capital contributions from foreign investors in the future.

Part II: Article-by-Article Commentary on the Model Investment Limited Partnership Agreement (Japanese Version)

This is an article-by-article commentary of Part I providing concrete explanations on each provision.

Part III: Model Investment Limited Partnership Agreement (Simplified Japanese Version)

This is a model LPA in Japanese expected to be used by businesses that intend to newly establish an investment fund by using a JLPS as an investment vehicle without a current view to receiving capital contributions from foreign investors. Part III is based on Part I but removes the provisions on foreign limited liability partners and makes other adjustments to the provisions (primarily deleting them) in terms of not receiving investments from foreign investors.

Part IV: Model Investment Limited Partnership Agreement (English Version)

This is a model LPA in English expected to be used by businesses that intend to raise investment funds by receiving capital contributions from foreign investors not as an Exempted Limited Partnership under Cayman Law but as a JLPS in consideration of the size of the investment fund. Part IV is not a mere English translation of Part I but a rewrite of its content prepared in accordance with the form and style of a limited partnership agreement in general use according to global practice.

Prior to this there was no sample agreement for JLPSs in English that conformed to global practices, which raised the issue that JLPSs find it difficult to receive capital contributions from foreign investors. Part IV is expected to contribute to the resolution of this issue.

Part IV can also be used as a sample LPA for investment funds in the case of forming a parallel fund structure between a JLPS and a partnership-type offshore investment fund, including a Cayman Islands Exempted Limited Partnership. When using Part IV for such a purpose, Part V and the below-listed reference materials (Summary of Applicable Regulations Concerning Cayman Islands Limited Partnerships) should also be consulted.

Part V: Guidance Note for the Model Investment Limited Partnership Agreement (English Version)

This is a guidance note for Part IV providing explanations on conceivable structures and other key points. At the end of Part V, a model initial limited partnership agreement and its Japanese translation (Initial LPA) are attached as appendices. By using the Initial LPA, a business can avoid spending effort on preparing a large-volume Japanese translation for an English agreement to apply for registration and can receive the full benefit of early formation of a JLPS (being able to start utilizing partnership property smoothly by opening a partnership account and concluding contracts with various service providers early).

Related Materials

Word files of Part I, Part III, Part IV and the appendices to Part V have been uploaded separately to the below-listed link (About the Investment Limited Partnership (JLPS) System).

Related Links (in Japanese)

Division in Charge

Corporate System Division, Economic and Industrial Policy Bureau