Blog post -
Osaka Emerges as Asia's Next Global Financial Hub with Groundbreaking Special Zone Initiative
Osaka has proposed a special zone framework utilizing the government's financial and asset management special zone program to promote the concentration and enhancement of financial and asset management services alongside the development of growth sectors. The city is positioning itself to maximize its economic power and strategic location while harnessing the momentum of the Osaka-Kansai Expo 2025.
What are Japan's Financial and Asset Management Special Zones?
In June 2024, the Financial Services Agency (FSA) designated four regions - Hokkaido, Tokyo, Osaka, and Fukuoka - as "Financial and Asset Management Special Zones." This initiative aims to create a "virtuous cycle of growth and distribution" by accelerating capital flows through asset management reforms. These designated regions receive special regulatory exemptions and support measures to attract new domestic and international investments, fostering the development of both financial services and regional industries.
The Special Zones program advances three key objectives:
1. Attracting domestic and international financial and asset management operators
- English-language administrative procedures (commercial registration, social insurance, etc.)
- Creating new residence status for foreign investors investing in startups
- Support for opening bank accounts for foreign nationals
2. Supporting regional growth industries through financial and asset management operators
- Easing investment regulations for bank groups' specialized investment subsidiaries in startups
- Relaxing regulations on qualified investors who can invest in professional venture funds
3. Promoting and nurturing growth industries
- Promoting acceptance of overseas talent (GX, fintech, etc.) through the Highly Skilled Professional Points-based System
Beyond financial services, the program implements regulatory reforms and operational initiatives encompassing business environments, living conditions, and target industries for investment.
Each of the four designated regions has established unique concepts and visions leveraging their distinct characteristics, promoting initiatives in collaboration with a broad range of stakeholders.
Osaka's Strategic Vision and Implementation
The Global Financial City OSAKA strategy focuses on creating an environment where continuous innovation thrives, carrying forward the legacy of Expo 2025 into the future. It aims to implement regulatory reforms aligned with global standards to attract foreign investment and strengthen financial functions in the region. These efforts are being driven by the "International Financial City OSAKA Promotion Committee," established in March 2021. The committee, which now comprises 40 organizations as of February 2024, represents a collaborative effort between industry, academia, and government institutions.
Key Objectives and Activities
The initiative is structured around two primary goals:
1. Development as a Global City Leveraging Financial Strength
- Creating an attractive urban environment through financial initiatives
- Facilitating diverse funding channels for startups and regional revitalization
- Strengthening resilience through enhanced hub functions
- Energizing domestic financial markets
Implementation strategies include:
- Developing lifestyle infrastructure appealing to international residents
- Creating business environments attractive to both domestic and foreign companies
- Strategic information dissemination and promotion
- International partnerships
- Pioneering initiatives by Osaka Prefecture and City
2. Positioning as a Financial Frontrunner
- Creating innovative financial products and markets
- Advancing sustainable finance initiatives
- Advocating for regulatory reform in financial services
- Developing high-caliber financial talent
Supporting Infrastructure: One-Stop Support Center
A notable development is the establishment of the International Financial One-Stop Support Center Osaka. This center provides comprehensive support in both Japanese and English, offering:
- Expert consultation on financial licensing
- Business advisory services
- Lifestyle support for international residents
- Specialized assistance for foreign financial firms and investors considering Osaka expansion
Subsidies for Financial Foreign Companies Establishing Operations
The city provides partial subsidies for expenses necessary for preliminary surveys and establishment of new offices in Osaka City:
- Preliminary Survey: Up to 1,100,000 yen
- Office Establishment: Up to 10,000,000 yen (50% subsidy rate)
Special Local Tax Treatment for Financial Foreign Companies
This is Japan's first system where corporate resident tax and corporate business tax can be reduced to zero for up to 10 years for companies that establish operations in Osaka City by fiscal year 2025, the year of the Osaka-Kansai Expo.
Future Outlook
The immediate focus is on attracting talent, businesses, and capital from Asia and worldwide while building a concentrated ecosystem of investment-ready startups. This initiative represents Osaka's commitment to transforming into a major international financial center while fostering innovation and sustainable growth, as part of Japan's broader strategy to enhance its financial markets through the Special Zones program.
Global Financial City Osaka
https://global-financial-city-osaka.jp/en/
