Japan as an International Financial Center
By: Norbert Gehrke
Tags: Japan, Asset Management, Regulation, Innovation, Banking

While Japan, as a financial business center, offers advantages in terms of good public security, a favorable living environment, and business potential with household assets worth more than 18 trillion dollars, it still faces challenges in attracting global investors and businesses to its market as well as promoting linguistic and social diversity.

Taking advantage of lessons learned from the successful inbound tourism campaign, the Financial Services Agency (JFSA) intends to make a breakthrough in the financial sector, mainly in the asset management business sector, with the aim of making Japan an attractive place for foreign nationals to do business in addition to a tourism destination.

JFSA intends to strategically reform financial and capital markets to make them more attractive for foreign businesses and highly-skilled professionals, thereby realizing “Japan as a global financial center” (Finance Place Japan).

In particular, JFSA will remove regulatory- and taxation-bottlenecks, enhance the attractiveness of financial and capital markets, and carry out corporate governance-reform in order to make it easier for foreign businesses and professionals who are already engaged in asset management business overseas to conduct the same kind of business in Japan.

The national government, local governments, and the private sector will jointly collaborate to create an attractive business- and living-environment for foreign nationals who are intending to conduct asset management businesses in Japan, so that the foreign nationals may consider Japan as an anxiety-free “choice location” for conducting business as part of potential market entrants’ global business schemes. Joint collaborative key initiatives are:

to provide seamless consultative support for foreign nationals intending to conduct asset management businesses in Japan, mainly in terms of establishing corporations, commencing businesses, and settling in and establishing secure livelihoods;

to make English communication available in supporting newly entering foreign asset management companies and others in terms of pre-application consultation, registration, supervision and others;

to relax requirements for obtaining status of residence and expand incentives (preferential treatment); and

to enhance information sharing in respect of English-speaking (or multi-lingual) services related to livelihoods, laws, accounting (finance and payment), education, real estate (housing and relocation), medicine (medical/healthcare), and others.

In particular, the key initiatives are expected to be achieved by the competent authorities through the implementation of the following:

to prepare a special provision that grants market entrance by foreign businesses managing mainly foreign funds with simplified entry procedures

to amend the Corporate Governance Code to improve the quality and quantity of independent directors by such means as ensuring their diversity through the appointment of women, foreign nationals, mid-career hiring, and promoting timely and appropriate corporate disclosure

to improve the attractiveness of financial and capital markets

to establish a “Support Network for Startups in the Financial Sector” jointly run by the public and the private sectors

to communicate in English with applicants as new foreign asset management companies and others in terms of registration and supervision

to grant special provision to eligibility requirements for status of residence,iv newly set forth bonus points for highly-skilled foreign professionals, relax employment requirements for domestic helpers/nannies, and increase convenience for working spouses

to promote the availability of financial administrative services in English through the use of AI multilingual translation technology and by translating remaining finance related laws and regulations

to broaden the scope of borrowers subject to financing to include asset management companies and others therein under the credit guarantee system and Japan Finance Corporation

to further enhance information sharing and surveying issues pertaining to livelihoods, including bi-lingual (multi-lingual) professionals,v medical/health care, real estate (housing and relocation), and international schools

to use subsidies granted to the local governments providing support to foreign financial businesses according to the respective needs of the businesses

Source: https://www.fsa.go.jp/en/financialcenter/financialcenter.html