Published: December 11, 2023 / Updated undefined ago
Fukuoka: The Global Finance City
Why international companies are choosing Fukuoka
Sat at the heart of East Asia on the northern coast of Japan’s Kyushu Island, is the vibrant, cosmopolitan city of Fukuoka. An alluring blend of innovative dynamism, youthful demographics and infrastructural interconnectivity can be found in this city, where an appreciation for the good things in life is woven deep into the culture.
Fukuoka has steadily built a reputation as a prime alternative business location to the megalopolises of Tokyo and Osaka for startups, creatives and a wide range of industries. Now the city is leveraging its abundant advantages to bolster its financial capabilities and credentials, so it can further grow, serve and strengthen both its own and the surrounding economy.
In November, the city’s performance was recognized by leading think-tank Z/Yen, which featured Fukuoka on its Financial Centres of the World webinar for the first time. Hosted by Z/Yen CEO Mike Wardle, the webinar features a discussion on the city’s growing international appeal with Alison Birch, managing director of State Street Trust and Banking, and Kyōya Okazawa, global financial sector veteran and Global Financial Business Attraction ambassador for Fukuoka City. London-based Z/Yen is co-publisher of the Global Financial Centres Index.
A boomtown without sky-high prices
Fukuoka is Japan’s fifth largest city. It’s population surpassed 1.6 million in 2020 and has continued to grow:(※1) a distinct divergence from the aging trend in most of Japan. The city has been attracting people from elsewhere, particularly those in the 15-to-24 bracket, who come for higher education or employment. Approximately seven percent of the city is made up of students, and it also boasts the fastest-growing foreign population of any major Japanese municipality.
Even with its growing population and economy, prices in Fukuoka remain significantly lower than those in other key urban centers, giving the city another boost in the quality-of-life stakes. Against the background of the current focus on work-life balance, the city’s short commutes, laidback atmosphere, and easy access to beaches and other nature, are especially attractive for younger workers.
Connecting old and new, near and far
The Hakata Old Town area of the city is home to temples, shrines and opportunities to experience Japanese traditional culture. Once a separate city, Hakata saw exchanges with mainland Asia as early as the 3rd century, and was Japan’s largest trading port for much of the samurai era. The district remains a hub of connectivity.
Nowadays, Hakata Port handles cargo vessels, has a hydrofoil ferry that links the port to Busan in South Korea in just three hours, and is a regular stop for cruise ships from Asia and around the globe. Fukuoka Airport is also in the Hakata area, less than 10 minutes by subway from the city center.(※2) In addition to its domestic routes, international flights make Fukuoka a few hours travel from Hong Kong, Seoul, Shanghai and Taiwan.
Accessibility is excellent within the city, notes Birch : “I live here, I spend one week a month in Tokyo and three weeks in Fukuoka. My commute in Fukuoka is lovely. If the weather's nice, I bicycle to the office. If not, I hop on a bus and come to the office and in both cases, I'm here within 30 minutes. When I work out of our Tokyo office, I'm on a subway. It's crowded and it takes me almost an hour.”
Due to the region’s seismic stability, Fukuoka became a popular location for corporate back-up operations after the 2011 earthquake in Japan’s northeast. State Street was among those that found the city offered much more than just functioning as a secondary emergency location.
“In the beginning, it was just ‘let's have it be a backup office.’ And we started with a dozen employees and then grew to 30 or 50; that's enough for back-up purposes,” explains Birch. “However, what we found is the access to talent here is outstanding. So, we just kept growing and growing: 50, 100, 150, we're now over 200 staff doing core operating work. We have employees here from 25 different countries. That's one of the things that happens when you hire exchange students, it is a wide demographic, and they all like working here.”
Fukuoka was designated a National Strategic Special Zone in 2014, adding further momentum to the city’s economic development. The following year it became the first city in Japan to offer Startup Visas (Business Manager Visas), helping cement Fukuoka’s reputation for welcoming global entrepreneurs.
Global financial center
According to Okazawa, Already the de facto capital of Kyushu — a vital pillar of Japan’s economy, accounting for around 10 percent of GDP, home to a huge automotive industry and becoming a hotbed of semiconductor research and manufacturing — the city is now focused on enhancing its financial markets. As part of these efforts, reforms are underway to boost liquidity on the Fukuoka Stock Exchange, which opened in 1949 and is one of Japan’s four stock exchanges.
The exchange is also currently trialing a system allowing foreign investors to trade listed stocks in their own currencies, with a fintech firm from Singapore and a digital broker from Hong Kong participating.
Meanwhile, the reverberations from billions of dollars in investment pouring into Kyushu’s semiconductor cluster are being felt in the finance sector. The presence of the world’s largest chipmaker, Taiwan Semiconductor Manufacturing Co. (TSMC), which is partnering with Sony on a plant in neighboring Kumamoto, has brought financial institutions from Taiwan to the region. These include the E.Sun Bank, which recently opened a Fukuoka branch and is collaborating with the local finance sector.
The city is certainly not resting on its laurels and is proactively working to attract more international companies through its Global Finance Centre initiative, offering comprehensive support and subsidies for financial institutions opening or expanding operations.
Driven by the synergies of a young, energetic populace in a nurturing environment, regional and domestic connectivity, and a business-friendly leadership and ecosystem, the future looks bright – the future looks like Fukuoka.
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