Japan is considering tax reform to attract foreign financial firms and skilled workers in an effort to improve the country's standing as a global financial center, the Financial Services Agency said in annual policy guidelines released Monday.

While Japan has sought for years to lure foreign professionals, experts said Tokyo needed to tackle issues including a relatively high tax rate and a lack of English language fluency in the workplace.

"To improve the business environment for foreign financial firms, we will comprehensively consider concrete ways such as human resources development, tax reform and budgetary measures," the policy guideline said, without elaborating on when changes would be made.

The ruling Liberal Democratic Party had proposed visa support and streamlining approvals for investment management licenses but there was no mention in those plans of tax reform.

Prime Minister Shinzo Abe, who last week said he would resign, had suggested in the Diet that Japan could take in Hong Kong residents who worked in the financial sector or other specialized areas.

Hong Kong's corporate tax rate of 16.5 percent is a little over half that of Japan's and Australia's, and among the lowest in the region.

China's parliament in June passed national security legislation for Hong Kong, raising fears among democracy activists and some foreign governments that Beijing is further eroding autonomy there.

The Financial Services Agency also said it would use more English in administrative procedures to make it easier for foreign firms to start businesses in Japan.

Tokyo ranked third in Z/Yen Group's rankings of global financial centers published in March, up from sixth place in September 2019, while Hong Kong, which had faced domestic political turbulence, fell from third to sixth place.