We are working at speed.
Hello. I'm Mike, a lawyer living in Hong Kong.
This is a word that has been used a lot since the days of Prime Minister Abe. Even after Kan became prime minister, we still hear it from time to time. With a sense of speed? I don't know what it means in Japanese. It doesn't seem to mean "as soon as possible" or "as a top priority". Does it mean that you only feel like doing it in a hurry?
IT WAS A WORD THAT CAME UP A LOT WHEN WE WERE ACCUSED OF BEING TOO SLOW IN EVERYTHING WE DID FOR CORONA. BUT IT'S NOT REALLY ABOUT SPEEDING UP. IT'S SLOW. THERE HAVE BEEN A LOT OF THINGS THAT HAVE BEEN SLOW, BUT NOW IT'S VACCINATION. A QUICK LOOK AT THE CURRENT VACCINATION RATES BY COUNTRY (EACH PERSON GETS TWO DOSES, SO WHEN THE RATE REACHES 200%, IT MEANS THAT ALL THE PEOPLE IN THE COUNTRY HAVE HAD TWO DOSES) SHOWS THAT THE TOP COUNTRY IS ISRAEL AT 110%, THE US AND UK AT JUST OVER 50%, GERMANY, FRANCE, SPAIN AND OTHER MAJOR EU COUNTRIES AT AROUND 20%. IN GERMANY, I THINK IT WAS, THE RULING PARTY IS IN A DIFFICULT SITUATION BECAUSE OF THE LOW VACCINATION RATE.
Our country, by the way. About 1% (!) The rankings are Bahamas, Jamaica, Japan, Zimbabwe and Tunisia. The ranking is Bahamas, Jamaica, Japan, Zimbabwe, Tunisia.... Good luck Nippon.
This time, the call for Tokyo to become a financial city was actually made in 2017. That was three years before Hong Kong passed the National Security Act last year. The truth is that the recent situation in Hong Kong has given it a boost. So, leaving aside what you were doing before that, what have you done since you became active?
The other day, for the first time in a long time, I read with interest a relevant article in the Nikkei of 4 April.
As we have written at some point in the past, it is understood that the tax system and business laws are difficult to use, and special measures to simplify the registration procedures for foreign fund managers have been submitted to the current Diet session as five-year time-limited legislation, which is expected to come into effect by the end of this year. They have also included preferential tax treatment for foreign fund managers in their tax reform plan for 2021.
Within the year? Five-year time-limited legislation, amended in 2021?
Slow! And... There is no such thing as timed legislation!
If we are competing with Hong Kong to be the financial hub of Asia, we should also compete with Hong Kong in terms of speed. Is this another example of the bureaucracy's lack of international awareness? Are we really saying that we want financial personnel to come to Japan but we have to wait for a year or so to prepare? We'll make it easy for you to come for five years and then we'll think about what to do after that?
WHILE JAPAN HAS BEEN SITTING ON ITS HANDS, HONG KONG'S NEW LPF LAW CAME INTO EFFECT LAST YEAR. THIS IS PARTICULARLY BENEFICIAL TO HONG KONG-BASED PE FUNDS. UNTIL NOW, PE FUNDS WITH FUND MANAGERS BASED IN HONG KONG HAVE USUALLY KEPT THE FUND ITSELF OFFSHORE, MAINLY FOR TAX REASONS (THE SAME APPLIES IN JAPAN), SUCH AS IN CAYMAN. HOWEVER, THIS WAS AMENDED AND A MECHANISM WAS CREATED AND IMPLEMENTED QUICKLY LAST YEAR TO ENSURE THAT FUNDS AND FUND INVESTORS ARE NOT TAXED IN HONG KONG EVEN IF THE FUND IS LOCATED IN HONG KONG. SO IT HAS BECOME MORE CONVENIENT TO SET UP A FUND IN HONG KONG. RECENTLY, SOME OF MY HONG KONG FRIENDS HAVE ASKED ME, "WHY DON'T YOU SET UP A BUSINESS IN HONG KONG? ETC. I AM TRYING TO USE THE NEW LPF METHOD AS SOON AS POSSIBLE. SO FAST! THE NATIONAL SECURITY ACT WAS PASSED IN A FLASH AND CAME INTO EFFECT IN A FLASH. IT'S A DICTATORSHIP, WHAT CAN WE DO? THAT'S THE EXCUSE.
Anyway, while Japan is taking its time with tax amendments and timed legislation, the competition is moving ahead at a rapid pace. By the time the amendments have been made, it will be impossible to compete without thinking about the next amendment, I'm sure.
I'm feeling a bit empty after writing all this. See you next time.
