Japan’s ruling Liberal Democratic Party is looking to submit a proposal to the cabinet next week that would help lure firms and financial professionals looking to relocate from Hong Kong due to its political uncertainty.
Details of the plan released Wednesday from a party special committee said that in order to make the country more attractive, Japan needs to ease tax burdens, including inheritance taxes, that can be higher than those in financial hubs such as Hong Kong and Singapore. The plan also includes easing restrictions on personnel moves and improving services offered in English.
“Expectations are rising both domestically and internationally for boosting Japan’s role as a global financial city,” said LDP lawmaker Satsuki Katayama, who heads the special committee.
If the LDP-dominated cabinet approves, Japan’s government could try to have the plan put into place. But the proposal is likely to face pushback over its calls for tax revisions, which may hinder its implementation.
Tokyo has tried for years to increase its status as a global financial hub, but has faced problems including bureaucracy seen as excessive and a language barrier. On top of this, Japan currently bars almost all foreigners from more than 100 countries and regions from entering in a bid to contain the spread of the coronavirus.
The LDP began debating details in July about making the Japanese capital more attractive to international firms, shortly after China’s government asserted broad new powers over Hong Kong with a national security law that’s endangering the city’s reputation as a global business hub.