JETRO Invest Japan Report 2024
Chapter3. Recent Government Measures Section3. National Strategic Special Zones "Special Zones for Financial and Asset Management Businesses"

In June 2024, the Financial Services Agency announced that it would designate the four regions of Hokkaido and Sapporo, Tokyo, Osaka (Pref. and City), and Fukuoka (Pref. and City) as Special Zones for Financial and Asset Management Businesses.

This special zone is designed to realize a "virtuous cycle of growth and distribution" that accelerates the flow of funds through the reform of asset management. By allowing special deregulation and support measures in the target areas, new investments will be attracted from both within and outside Japan , leading to the development of the financial industry and regional industries.

In the Special Zones for Financial and Asset Management Businesses, efforts will be made from the perspectives of (1) clustering domestic and foreign financial and asset management companies, (2) having those financial and asset management companies support the fostering of regional growth industries, and (3) promoting and fostering growth industries themselves. Specifically, the national government will implement regulatory reform and operational measures not only for the financial sector but also with regard to the business and living environments and industries targeted for investment. In that process, for matters subject to regulatory reform for which demonstrative measures by limiting target areas are preferable, the system of National Strategic Special Zones is to be utilized.

Each of the four target regions has a special zone concept and vision that capitalizes on its unique characteristics. In order to realize these goals, each region will promote initiatives in cooperation with a wide range of stakeholders.

Hokkaido prefecture and Sapporo City will fully utilize the prefecture's potential to produce the largest amount of renewable energy in Japan and Sapporo's attractive feature, a well-balanced harmony of city functions and nature, aiming to create an Asian and world financial center where funds, human resources, and information concerning GX concentrate. In addition, they will strengthen financial functions and build a supply chain for the GX industry and create employment opportunities as a renewable energy supply base for the whole nation.

Under the initiative of the Team Sapporo-Hokkaido, a GX-financial consortium consisting of 21 organizations, which was established in June 2023 in collaboration among the industry, the academia, governments, and the financial sector, Hokkaido and Sapporo will promote the vitalization of financial transactions through GX investments.

Tokyo aims to further develop the environment as an international financial center and promote the development of sustainable finance and startups in Japan and Asia, contributing to the growth of Japan and Asia as a gateway to attract funds, talent, technology, and information around the world. For that purpose, the Tokyo metropolitan government has set up three pillars: the leading city for sustainable finance, the city where global Startups are born, and the city with the global standard for business in English.

In order to promote these initiatives and achieve a sustainable society, the Tokyo metropolitan government collaborates with the Organization of Global Financial City Tokyo (FinCity.Tokyo), which is the first public-private financial promotion organization in Japan, with diverse public and private players relating to finance and startups, and also with major overseas financial cities such as the city of London, the United Kingdom (concluded an agreement on exchange and cooperation).

Osaka Prefecture and Osaka City aim to create an environment to enable startups and universities, etc. to boldly take on challenges, instead of wasting the opportunity of the EXPO 2025 OSAKA, KANSAI, JAPAN merely as a temporary event, with the final aim of achieving a future society where new innovations are created one after another. For that purpose, they will implement regulatory reform to satisfy the global standard and strengthen financial functions by attracting investments from overseas.

These activities will be led by the Global Financial City OSAKA Promotion Committee (participated in by 40 organizations as of February 2024), which was established in March 2021 and is an all-Osaka collaboration of Osaka Prefecture, Osaka City, and related organizations in industry, government, and academia. For the time being, efforts will be intensively made to attract human resources, companies, and funds from Asia and the rest of the world and cluster startups that will be investment targets.

Fukuoka Prefecture and Fukuoka City will cluster global financial institutions and their affiliated companies, and highly-skilled financial specialists by leveraging the characteristics of Fukuoka as a gateway to Asia. While capturing the vitality of Asian countries, they provide growth funds for startups in Fukuoka and Kyushu, as well as for companies in growth industries clustered within the prefecture, thereby strengthening the ecosystem.

These activities will be promoted by TEAM FUKUOKA, an industry-government-academia collaboration established in September 2020 to attract global financial functions. As of the end of April 2024, twenty-four companies have been attracted from inside and outside Japan, and the area will continue to focus on asset management companies, fintech firms, and operations for BCPs (Business Continuity Plans), which are highly compatible with Fukuoka's regional characteristics, and will continue to work on attracting companies and improving the environment.