POLICY & DIPLOMACY

Policy package through cross-ministerial collaboration

ADVANCING JAPAN’S STATUS AS A

GLOBALFINANCIAL HUB
A cross-ministerial effort for reform is underway to boost the attractiveness of the country’s financial and capital markets.
Here, an expert well-versed in the Japanese market speaks about her expectations toward Japan.

A dedicated website has been launched to enhance theprovision of information in English. It offers necessary
information on the improved procedures for opening abusiness and acquiring residence status.

Japan’s financial and capital markets are now inthe global limelight. That newfound centrality canbe attributed to the Suga administration’s crossministerial policy package, launched in order to create
Alicia Ogawa previously
lived and worked in Japanfor 15 years. “Japan was awonderful place to live in.
It’s safe, beautiful, and thetransportation is amazing.”

an international financial center—a goal raised in thegovernment’s Action Plan of the Growth Strategy
announced last year. Japan has the strengths to standout as a financial center, including political stability,
legal systems, public security, and a favorable living
environment. In addition, its sizeable domestic
economy, with a GDP of JPY 560 trillion (about USD
5.15 trillion), and financial assets held by households
worth more than JPY 1,900 trillion (about USD 17.5trillion), also strengthens Japan’s appeal within theForeign firms interested in entering Japan are already using
the services of the recently launched Financial Market
Entry Office, which communicates with foreign asset
management companies and helps them with theregulatory process. (ASO Taro, Minister of State forFinancial Services, on the left, and AKAZAWA Ryosei,State Minister for Financial Services, on the right)

Tax policy

Revision/clarification of corporate, inheritance, andincome tax

Regulatory
policyOne-stop English service for application and registration
for newly entering overseas asset managers
Introduction of simplified market entry procedures foroverseas asset managers

Residence
statusSpecial immigration measure for newly entering asset
managers as a temporary visitor to commence businesswithout returning to their home country
Relax employment requirements for domestic helpers
and increase convenience for working spouses forHighly-Skilled Professionals

Company setup andlivelihood support

One stop company setup support for free
Livelihood support such as international school hunting,medical matters, and housing

Information
sharing

Collectively share related policy measures information
through a dedicated website and contact points of
diplomatic missions

asset management business.
Alicia Ogawa, director of the Project on JapaneseCorporate Governance and Stewardship at Columbia
Business School, who worked at a Japanese financial
institution for 15 years, and is an expert on the Japanese
economy and Asia’s financial markets, says, “Japan has
been saddled with issues such as language barriers—
particularly in terms of offering administrative services
in the English language—as well as high tax rates and ashortage of workers with professional skills. Many past
initiatives have attempted to tackle these issues, but I
believe that the earnest efforts Japan is currently making
are different. We can see that Japan is now seriously
committed to becoming an international financialcenter. Expectations toward Japan’s financial and capital
markets are also growing among foreign investors.”
The government is actively working to resolve theissues that she mentions through its cross-ministerialpolicy package. Initiatives are underway to remove
regulatory and taxation-related bottlenecks in order tomake it easier for foreign businesses and professionals
already engaging in asset management business abroad
to do the same kind of business in Japan. Other
initiatives include improvements in the residence-visa
application process and the provision of comprehensive
support for those wishing to set up companies and ease
into life in Japan. Ogawa especially commends theFinancial Market Entry Office, which was launched
in January 2021. This office serves as a single pointof contact for newly entering asset management
firms that require English communication withrespect to pre-application consultation, registration,and supervision. In March, a dedicated website waslaunched that provides information on businesssetup, related policy, and daily life support for foreign
financial businesspeople considering entering Japanor establishing a life there (https://www.fsa.go.jp/internationalfinancialcenter/en/).
According to Ogawa, “There has been a majorchange regarding better dialogue between investors
and companies on account of broad acceptance of thecorporate governance code compiled by the Financial
Services Agency and the Tokyo Stock Exchange.
Interest in Japan as an investment destination isgrowing significantly; that is due to expectations
surrounding the growth of the Japanese economy
and innovations, as well as to the rise of young andambitious talent.”
She also proposes ways in which the country
can aim even higher. “Japan needs to make further
advancements in digitalization—an area that theSuga administration is stepping up efforts to promote.
And, above all, it is essential to raise public sentiment
for society as a whole to welcome foreign asset
management companies and financial talent. To that
end, disseminating information both within andoutside Japan is an important endeavor for related
ministries and agencies.”
Initiatives to realize an international financial
center have just begun. Japan will actively implement
each measure designed to boost Japan’s economy andstrengthen its presence in the global financial market.