Tokyo Drift: How the city is poised to rise as a foreign startup hub
As startups globally grow beyond borders, Tokyo stands out as an enticing opportunity. With a history of technological prowess, strategic location, and a thriving consumer base, Japan is inviting foreign startups seeking new horizons.
Tokyo, a city where the future coexists with the old world, holds a unique allure for international startups. The Tokyo metropolitan area is home to approximately 14 million people (as of 2023), making it an ideal environment for business expansion.
The city’s exceptional economic prowess is underscored by its (nominal) GDP of $ 761 billion (as of FY 2023). Remarkably, despite the challenges posed by the COVID-19 pandemic, Tokyo continued to thrive, with a strong focus on the quaternary industry and ESG investment.
“I believe that Tokyo has potential for innovation and business development. It is one of the world’s largest economies and home to world-class companies and universities. It also has a solid infrastructure, stable social order, and commitment to the rule of law”, said Yoshimura Keiichi, Director General, Office for Startup and Global Financial City Strategy, Tokyo Metropolitan Government (TMG).
Notably, the city hosts the world's third-largest medical market, and growing the amount of sustainable investing assets, thanks to its commitment to addressing climate change. Tokyo's consumers have an inherent preference for high-quality products and services, rendering the city a launchpad for success that resonates globally.
What makes Tokyo a favourable destination
In a concerted effort to position Tokyo as a welcoming and thriving business destination for international companies, TMG champions a diverse portfolio of free support services for foreign enterprises. A pivotal initiative within the TMG's arsenal is "Invest Tokyo", a programme designed to empower foreign companies to seize burgeoning business opportunities within the city and facilitate their expansion.
Within the expansive framework of "Invest Tokyo", multiple initiatives come to life, and one standout component is "Access to Tokyo". Under this programme, members warmly welcome foreign companies, providing them with indispensable insights into the Japanese market. This initiative goes beyond mere guidance, offering a deep dive into cultural nuances and tailored seminars with Japanese companies, serving as a vital bridge for international enterprises.
‘Access to Tokyo’ has offices in major cities in the world - London, Paris, San Francisco, and Singapore - making sure that all queries are addressed in the local language and time.
Multiple subsidies and benefits
Shinichi Fukunaga, General Manager, TMG, elaborated on the special support that is given to fintech and asset management companies. “A free consulting service will be tailored for tech and financial companies with a keen interest in establishing their presence in Tokyo. The support spans the full spectrum of market analysis, strategy formulation, and the identification of potential business partners. In essence, it's a roadmap to success, helping foreign companies navigate Tokyo's business terrain with precision and confidence,” he said.
He further highlighted TMG’s commitment to making the entry process as frictionless as possible with financial incentives, including subsidies for office preparation, search assistance, and recruitment. To bolster this impressive array of services, Tokyo's Business Development Center (BDCT) collaborates with its counterpart in Hong Kong, providing an all-encompassing one-stop service for foreign companies embarking on their journey to establish themselves in Tokyo.
Additionally, the Tokyo One-Stop Business Establishment Center (TOSBEC) takes simplification a step further by offering expert assistance in the form of staff and professionals. This seamless transition extends to expert consultations on expatriation, ensuring the relocation of international employees proceeds with ease.
For companies already benefiting from TMG services, the added advantage of partnership support facilitates business matching and exploration of the best partners, be it clients, suppliers, or related organisations within Tokyo's dynamic business ecosystem. Finally, the Tokyo Consortium emerges as a vital player in accelerating startup growth and supporting the implementation of innovation, thereby contributing to the sustainable development of the Tokyo economy and enriching the local community.
Azabudai Hills: A pivotal step in Tokyo's quest
In addition to incentives and support, the provision of state-of-the-art infrastructure is vital for the growth of foreign startups in Tokyo. Mori Building Co Ltd, one of Tokyo’s leading urban redevelopers, has taken a significant stride in this direction with its latest project, Azabudai Hills.
This $4 billion project offers a dynamic mix of residential, commercial, and office spaces. Its distinguishing feature lies in its commitment to fostering the startup ecosystem. Over 70 investment firms, including 20 venture capital and 50 commercial venture capital firms, have been invited to set up shop within the complex.
It also offers approximately 3,600 square metres of office space tailored for VCs, corporate VCs, and other innovative companies. This strategic move is further complemented by its proximity to CIC Tokyo, an innovation campus that currently houses 250 companies, investors, and government offices
For startup founders and expatriates considering a move to Tokyo, Azabudai Hills provides a comprehensive solution. With nearly 1,400 residential units on offer, the complex eases the transition for newcomers, and residential contracts will even be offered in English, demonstrating a commitment to inclusivity. Moreover, the development houses the British School in Tokyo and a nursery, ensuring that international families have access to quality education and childcare facilities. Keio University Hospital’s Center for Preventive Care has also relocated to the complex, offering medical services to the community.
The iconic Mori JP Tower combines luxury living with office spaces, and green spaces cover 2.4 hectares, showcasing Tokyo's commitment to sustainability. Mori Building's track record, including Roppongi Hills and Toranomon Hills, underscores its vision for Tokyo. Azabudai Hills is poised to make Tokyo a global startup magnet, becoming a ‘city within a city’ as the ‘Hills of the future’.
With this comprehensive suite of all-inclusive services and a steadfast commitment to simplifying the entry process, Tokyo extends a warm invitation to foreign enterprises, offering the keys to success in one of the world's most exciting business arenas.