December 9, 2024 – 12:56 PM
Did you know that more and more religious corporations are being bought and sold in Japan today? This emerging trend has grown so serious that even Japan’s Agency for Cultural Affairs has issued warnings. That familiar temple or shrine near you might already have changed ownership without your knowledge.
This article explores how religious corporations are being traded in Japan, the underlying reasons behind this trend, and whether these transactions are even legal.
Religious corporations in Japan—especially temples and shrines—are being hit hard by the country’s aging population and declining birthrate. Elderly priests and shrine keepers are struggling to maintain operations, while fewer younger successors are stepping up. Many temples face serious financial difficulty due to the decreasing number of parishioners and the aging of leadership.
In some regions, a single elderly priest is managing multiple temples. These heavy responsibilities are pushing more priests toward considering selling their temples.
In rural Japan, the situation is even more severe. Shrinking local communities and fewer parishioners make it increasingly difficult to sustain operations. Some small countryside temples can no longer even cover the basic living expenses of their priests, forcing them to consider selling.
Currently, there are no laws in Japan that explicitly prohibit the sale of religious corporations. That means such transactions are legally possible. However, each temple or shrine may have internal rules or denominational guidelines that must be followed.
For example, some religious sects require approval from their headquarters to sell a temple. Additionally, opposition from parishioners or local residents can delay or block sales.
One of the biggest motivations for acquiring a religious corporation in Japan is tax reduction. Religious corporations enjoy numerous tax benefits, including exemption from property tax and inheritance tax, as well as extremely low corporate tax rates. These advantages are attracting interest from both Japanese and international buyers.
Some buyers are genuinely motivated by the desire to become priests or shrine keepers in Japan. However, if the operation lacks sustainability, there’s a risk that their religious activities could end within a single generation.
A significant concern is the existence of "paper religious corporations"—organizations with no actual religious activity. These entities are sometimes sold and retained only in name, allowing buyers to exploit tax benefits. This has raised red flags among Japan’s cultural authorities and legal experts.
There are currently few regulations in Japan to govern the buying and selling of religious corporations, which leaves room for gray-zone or even illegal transactions. For instance, dormant religious corporations have been used as tools for tax evasion or money laundering.
Crimes related to religious corporation transactions have already occurred in Japan. In 2023, a temple in Osaka falsely registered land as a nursing home site, leading to the arrest of the priest. In 2024, a former judicial scrivener was arrested for forging meeting minutes of a religious corporation that was effectively inactive.
Japan needs clearer legal standards to regulate religious corporation M&A and prevent abuse. Transparency mechanisms should be established to reduce risks of tax evasion and money laundering.
To address the lack of successors, religious corporations in Japan should adopt more flexible operating systems. For instance, opening pathways for ordinary citizens to become priests or shrine keepers can help sustain operations.
Since temples and shrines are closely tied to their local communities in Japan, any potential sale must involve open communication with local residents and parishioners. Transparency and mutual trust are essential for smooth transitions.
The M&A of religious corporations in Japan could help solve issues like leadership succession and better utilization of assets. However, if misused, it could damage public trust. Transactions aimed at tax avoidance or financial misconduct must be strictly avoided. What’s needed is ethical and legal governance rooted in transparency.
If you're interested in consulting about the M&A or operation of religious corporations in Japan, please visit our official website. We are committed to building a sustainable future for Japan’s religious institutions with transparency and trust at the core of our services.
