Make Tokyo an International Financial City! -Proposals and Initiatives for Realizing Special Zones for Financial and Asset Management Businesses

Poste date: Monday, June 24, 2024

4 regions - Tokyo, Osaka, Fukuoka and Hokkaido - have been designated as the Japanese Government's 'Special Zones for Financial and Asset Management Businesses', which promote environmental improvement and deregulation with the aim of becoming international financial cities.

The Tokyo Metropolitan Government has issued proposals to revise the tax system and to relax regulations, and to create an environment in which it is easier for foreign investors to manage their assets, foreign companies to do business in Japan, and foreigners to live in Japan. The proposals aim to realize Tokyo as “Asia’s Innovation and Financial Hub for Realizing a Sustainable Society”.

Proposals by the Tokyo Metropolitan Government

The Leading City for “Sustainable Finance”

Proposals for utilizing the power of finance to solve social issues such as deoxygenation and the realization of sustainability.

Relaxation of requirements for entry of foreign asset management companies

Foreign asset management companies, etc. authorized by foreign authorities need to meet the business registration requirements to engage in investment management business in Japan. These requirements should be relaxed to promote their entry.

Abolish withholding tax on investment profits of foreign investors

In cases where foreign institutional investors invest in a fund created in Tokyo, tax on dividends sent to other countries shall not be withheld regardless of whether or not an application for tax exemption is filed under tax convention.

Preferential treatment for investment in infrastructure funds

The time-limited tax preferential treatment allowed for investment corporations that mainly invest in
renewable energy power generation facilities should be the permanent treatment and the scope for
the treatment should be expanded.

and　6 other proposals

The City where Global “Startups” are Born

Proposals to encourage the provision of funds to start-ups and to give birth to start-ups that are active globally.

Develop an environment of startup investment by public university cooperations

Public university corporations should be allowed to invest in university-launched startups.

Further expansion of investment in startups by bank groups

Investment restrictions and other regulations imposed on bank groups should be relaxed to further
expand investment in startups.

Financing for startups by means of investment trusts

Investment trusts are utilized to develop an environment where individual investors can invest in startups easily.

Support for startups in the later stage through sovereign wealth funds

To further strengthening financing for startups in the later stage with the aim of nurturing worldclass unicorns.

The City with the Global Standard for “Business in English”

Proposals for creating an environment where foreigners can easily do business and live comfortably.

Enhancing procedures in English at the time of founding

It should be allowed to fill in forms and applications in English for procedures at the Tokyo One-Stop Business Establishment Center for certification of articles of incorporation, registration of incorporation, labor insurance, health insurance, and employees' pension insurance.

Establishment of status of residence (foreign investors)

Resident status should be created for the purpose of nurturing world-class startups with the support of reliable foreign investors.

Establishment of status of residence (same-sex partner)

A special provision for the stay of same-sex partners should be established.

Establishment of status of residence (telework)

The status of residency should be modified to allow spouses of highly skilled foreign workers to remotely work for foreign companies, etc., while living in Japan.

Establishment of status of residence (domestic workers)

The regulation on requirements for accompanying domestic workers of highly skilled foreign workers should be further relaxed.

Establishment of status of residence (accompanying parents)

The regulation on accompanying parents of highly skilled foreign workers should be relaxed.

Promotion of information disclosure in English

The scope of English-language disclosure of information on IR in the Tokyo Stock Exchange’s prime market should be gradually expanded, and measures for supporting companies' efforts should be taken.

（Source：Proposals for the “Innovation and Financial Hub in Asia” toward Realizing a Sustainable Society）　　　　　　　　

Initiatives of the Tokyo Metropolitan Government

The Tokyo Metropolitan Government will work on various support and projects to realize 3 key words: 'Sustainable finance', 'Startups', and 'English'.

・Support for issuance of SDG bonds by companies

・Operation of “Tokyo Innovation Base”, an integrated startup support hub

・Holding ” SusHi Tech Tokyo” event to showcase the achievements of “Tokyo Innovation Base” on a global scale.

・“Business Concierge Tokyo” provides English language support for a wide range of foreign residents' needs from business to daily life.　

・Support for the　attraction　and　expansion　of　 international schools to create an environment where foreigners can work and live comfortably.

・Promotion to improve the precision of advanced AI-powered translation systems to increase the disclosure of Japanese corporate activities in English. and more

Summary

The Tokyo Metropolitan Government, in cooperation with the national government, industry associations, local governments, universities, etc. aims to become an international financial city by encouraging foreign investment and businesses to come to Tokyo, while at the same time creating a sustainable society. To achieve this aim,
the government will create an environment where foreign companies can easily start and develop their business, and where foreign nationals working there can live in Japan with peace of mind. We hope that Tokyo will continue to develop and give birth to companies that play an active role on the global stage, by widely promoting to the rest of the world the old charms of Japan and the new charms that will be created through deregulation and other means.