Japan to pitch Osaka, Fukuoka as int'l financial hubs after pandemic

Lower the greedy tax rates Abe.

International business are well aware of the Japanese penchant for complicating the simple with a hearty side order of instituanalised corruption, Japan does rank quite high for corruption. It also has a unique legal system that is at the bidding of the government and corporate entities. Not really the place as a foreign company you'd want to send staff to.

Worked for a couple of big overseas companies during my Tokyo days. Both only had very small operations in Japan. Talking to the bigwigs, opaque regulations and a high corporate tax rate were massive barriers to further investment.

Fukuoka a very attractive place though - international airport right in the middle of the city and nice lifestyle.

Because all foreign financial institutions are attracted by hanko, fax machines, and layers of bureaucracy.

If Carlos Ghosn’s plight is an example then Japan’s hostage justice would surely put off more than a few foreigners from working in Japan.

Also, any foreigner needing international travel will be subject to exclusionary measures not applicable to a Japanese.

Plus the associated costs of setting up in Japan and the lack of decent housing would it make Japan a low priority destination on any foreigner’s list...

The addition of the two areas also comes as China's recent tightening of its grip over Hong Kong has raised concern about the semiautonomous region's status as a major financial hub in Asia and the Japanese government hopes that these areas will become a new magnet for companies and skilled people.

In HK they have many English speaker unlike in Japan. Prior Japanese bubble those foreign companies might lined up just to set up business in Japan but now?

Japan try to attract foreign business that might leave HK after recent event in HK but is there any chance Japan compared itself to Singapore in term attractiveness to foreign business? Singapore you anyone can do that by only knowing English and also comprehensive supportive procedure, incentives and regulation from govt.

If they want to attract foreign institutions/talent, might be a good idea to stop unfairly discriminating based on nationality, i.e. the current re-entry ban.

Fukuoka is a nice city and would be a great location for this. I remember Osaka was trying to push Foreign Direct Investment in the early 2000's. At that time their mayor (Seki I believe) was very open minded.

One major issue: The issue where Permanent Residents cannot return to Japan if they leave during this current pandemic will hinder these efforts. Almost every expat in Japan I know is livid about this issue and we are all telling other people we know not to come. Many people I know are divesting from Japan or leaving over this and there are two medium sized foreign companies who will most likely relocate.

This issue is very much connected to the ability to attract foreign businesses or talent. Because of this issue I think it will be difficult for Japan to promote this (it is now international news).

Ran three brokers in Tokyo. When we started to make money, the FSA would run in and make up something to be put in the paper....shut us down for a few weeks. Had to make it a trade issue most of the time. It will never work.

Do not know enough to comment on the move. Very beautiful photos though. I miss going to Japan on holidays.

Setting up a business is easy here, legal offices and tax authorities aare very helpful but dealing with the banks - overseas payments and credit cards; logistics - import/ export of goods and their associated paperwork; property/ real estate for offices, factories and housing; and personnel/ HR are the 4 permanent headaches.

Smooth those out, and companies might consider Japan.

Certainly the FSA are a major barrier to any foreign banking institution.

One European bank who I will not name, had major expansion plans in Japan, and spent millions designing and getting set to launch a product for the Japanese retail market.

Not long before launch, the FSA having told them repeatedly they could do it, then changed their mind and the launch had to be cancelled.

Understandably, the bank itself basically decided that Japan wasn't a good place to do business and sold off its local operations.

Another foreign bank I know still deals with Japanese retail investors, but they are so scared of falling foul of the FSA that they do quality assurance on a very high proportion of client calls. This sucks up a lot of resources and revenue that could be used elsewhere.

I could go on and on.

I think Fukuoka would be a better choice for this than Osaka.

Good to see that Japan is finally thinking about something outside Tokyo, just in case Godzilla shows up.

Ah, yes! Don't forget to bring your fax machines and inkans!

@Mezane @Akula, anyone inside JGovt who is in charge in trying to attract foreign business in Japan really need to read your comment.

Japan will never rival Singapore-with it's low corporate tax rate, skilled English speaking workforce.

Companies will move to Singapore from HK.

Japan will not be on their radar.

More swill for the usual troughs.

ROI? Take your snout elsewhere!

Just another empty gesture from Aso, who knows well the overprotectionist culture of Japan.

Overseas companies are not welcome, not even remotely so. There are multiple barriers to international business that want to set up an office in Japan, becoming more difficult when we are talking of big corporations that may compete with Japan Inc. How many banks have stopped attempting to come to Japan, the third economy of the world, because they just cannot operate here?

Why would any company want to come here anyway? What are the incentives apart from afterwork leisure?

It is a good idea. It is doable. I would love to see this happen. Some sort of a joint venture with the US in Okinawa would definitely work.

Pipedream. Period.

Not going to happen. HK and Singapore have income tax brackets and corporate tax at 15% or less. In Japan income tax for high income individuals is over 50% (including income tax, ward tax and pension contributions). Corporate tax is over 30%.

This would need to change to get anyone interested.

I think it is a good idea, but like many posters above, it certainly can't happen in the current environment.

May I ask that they consider Sendai, or some other city in Tohoku. There is still a lot of recovery to be done after the devastating earthquake / tsunami on March 11, 2011. We could really use the help.

Err, better let some intl' financial people in then...

"...by allocating 50 million yen in a state budget...

Let the local folks pay all those costs, either the municipal govts or the chambers of commerce.

This is great! Japan is super attractive to Asians (non-Japanese) people. This is good.

i am very critical about this country but I love being here although with my companies and personally I pay crazy tax.

I agree with all the points of criticism and indeed the near maffia practices of the housing and real estate sector, furthermore , it is ridiculous to think financial institutions want to be anywhere but Tokyo, not even Yokohama. In the Us , they are in New York, not Baltimore and in the UK in London , not Liverpool.

japan is making attracting foreign companies practically impossible. Regretful but that is the current status

Its important to note that they are talking about making those cities “financial” hubs, rather than “business” hubs. The big problem there is that Tokyo is already Japan’s financial center, so it’ll be hard to draw international financial institutions to anywhere but Tokyo if they want to set up in Japan. Osaka and Fukuoka both have stock exchanges for example, but they are very minor in comparison with the TSX and mostly are for local companies to list on. Why would any foreign firm even bother?

And I note that the grand strategy involves nothing more than allocating 50 million Yen (about 500,000 US dollars) to provide “consultation services”, which is a sure sign they aren’t taking this seriously. Like, basically that is enough to devote one or two bureacrats to fielding phone calls and producing PR posters to promote something that isn’t going to work because their target audience isn’t going to care.

"’It's natural that people will start moving to Japan and Singapore (from Hong Kong),’ Finance Minister Taro Aso said”

Natural? I wonder what word Aso used in Japanese. Was it atarimae (当たり前)? Well, it doesn't strike me as either natural or atarimae that financial firms like Morgan Stanley & Co. will view Japan as a place to move to from Hong Kong. There's no doubt Singapore stands to benefit the most. Is Taipei considered unattractive because of uncertainty surrounding Taiwan's future? I ask this because English competence in Taiwan seems way higher than in Japan. Every major Taiwanese politician speaks fluent English, it seems.

But Fukuoka as a financial hub would be amazing if it happened. Great city, closer to Seoul and Shanghai than it is to Tokyo. The potential is there.

In this age of COVID-19 pandemic, it is amazing that the government is still pursuing this globalist policy. Obviously those in Abe’s government haven’t yet sensed that the tide has shifted irreversibly towards nationalism over globalism.

As somebody who moved from the UK to Japan to get away from the broken western capitalist race to the bottom, I wish Japan would stop trying to attract more foreigners and change Japan. Taxes may be higher here but it's one of the safest countries in the world. Its clean, public transport is excellent and although there is a lot of bureaucracy japanese public servants have all been really helpful especially considering my low level of Japanese. Japan also has plenty of police, no waits for medical care and ample cheap public sports facilities and consumption tax is below half that of the UK.

Won't happen.

Osaka and Fukuoka have a very domestic work culture and a domestic client base, and there's frankly no demand for anyone with international skills there. No one would be willing to take a job that pays 1/3 or less compared to Tokyo.

This sounds highly unlikely and the pitiful budget for it, 50 million yen, proves that they know this already.

The announcement made the papers though, so mission accomplished.

Nice idea in theory, but Japan just doesn't have the will to make it a reality. Byzantine business practices, poor English skills on the whole, and in the case of Osaka at least, not a particularly attractive city live in.

Is this a joke or what?

No international business in their right mind would relocate to Japan - unless they had a contract with the Japanese government that required them to have a presence here - because you have to look at the history of a country and how receptive and accommodating they are to your business and your workers.

There are a HOST of reasons why Japan is a BAD CHOICE to locate a business in. HK was a much better option until a few months ago - much better tax rate (read: 0% on non-HK sales if you qualify), and cheaper local workers who actually speak multiple languages that are used around the world. Singapore is becoming a better option now (though a lot more expensive).

Maybe the Japanese government thinks that no one will look into the past, but unless they take concrete LEGAL steps to correct past issues then of course past behavior is still possible in the future.

Singapore is going to win this. Japan and South Korea won't stand a chance!

This is great! Japan is super attractive to Asians (non-Japanese) people. This is good.

never happen Singapore has far lower tax rates, the local population has a high level of english proficiency and just doing business there is far easier than in Japan. There is just too much government interference in Japan for big foreign companies to invest heavily in Japan. If a foreign company gains to much market share in Japan how would you feel if your J competitors collude with the government to bring up fake charges against the company or individuals in the company. Itslike , bring all your money, but dont steal our business and do exactly what we say when we say it or there will be consequences

One of the thing that might put foreign companies off is the hostage judicial system with very little or no chance of defending your self.

Japan to pitch Osaka, Fukuoka as int'l financial hubs after pandemic

Yes, for sure, foreigners will hurry up to iron their shoe laces and rush to fly to Japan to invest knowing that if they become residents, have a family and a job in Japan, and if they leave the country during a pandemic they will not be able to return back to Japan...

identified by the government as strategic areas for deregulation.

Just deregulate, everywhere.

You’re welcome.

Ha, ha, ha my irony meter has just exploded.

Why would a business want to come here? Antiquated business and work practices, poor language skills and the current display of xenophobia does not encourage foreign business.

It's a good idea given the big one will strike one day. That's going to be a disaster for Tokyo.

LOL, hahahahah. A few days ago, Kono said he wanted defacto six eyes status, despite Japan not having a classification system for classified info, nor does it have English as the official language (like the 5 eyes). Then today, it wants to be an international financial centre, despite not adopting English Common Law in its business practices.

You couldn't make this stuff up. Laughing stock much?

These days, it is a blessing that your city isn't favored by the international financial sharks. Look at London, the locals can't afford housing, especially the youngs

Completely nonsensical for the reasons already mentioned by my fellow readers.

There will not be enough incentives to tempt foreign investors. J gov will want too much control.

This how the poster will read.

Welcome Osaka, Fukuoka Obei campany.

Omo-te-na-shi

Well, that’s interesting. I mean I understand what they’re trying to do, but those were some legitimate points that the article brought up. Especially the part of the language barrier and Japan being prone to natural disasters.

But that part about the higher tax rates, well it’s not business friendly, I don’t entirely oppose them. Because what do taxes often do for the people? It’s to provide services, including essential services. inefficient or not, it’s better than no safety net at all.

Well, if Taro Aso is in charge of the portfolio, we may as well consider it a done deal!

Why when there's no Market for the Products ?

Taxation

Over-regulation

Costs

Language

Politics

I think the above are reasons enough why some Companies to steer clear of Japan.

And 50 million yen ... equates to the slush fund for one Politician, so ... nothing will clearly happen on this - just a token gesture that's going nowhere.