Just in time to open your 2018 account
Well, the RetireJapan Guide to NISA came out yesterday 🙂
I hope it will be a useful resource for people who are thinking about getting started investing through NISA but don’t really know what to do.
It includes information about the new tsumitate NISA that starts next year, as well as the ordinary NISA and junior NISA accounts.
The launch price is 1,000 yen and it will be available at this price until I publish the next Guide (at the end of February), at which point it will go up to 2,000 yen.
This is probably not the final version of the Guide to NISA. Based on feedback and us spotting typos, we’ll do an update and get it professionally formatted in the next couple of weeks. That update should go out before Christmas.
The concept for the RetireJapan Guides is that they will be updated over time, and anyone who buys one will be sent subsequent editions for ever.
I don’t think anyone needs to buy one: they could just read through the RetireJapan site and past blog posts, and ask questions in the forum to get the same information.
What the Guide does is provide the information in a concise and organized manner. It should save people a lot of time.
So if you haven’t opened a NISA account yet and would like to learn more before doing so, you might find the Guide useful.
More importantly, if you have a friend who is interested in opening an account please tell them about the RetireJapan site and/or the Guide. Thanks!
* During the course of writing the Guide I discovered that NISA may not be a good fit for US citizens. If anyone is a US taxpayer and also using a NISA account, I would love to hear from you. Please email me or leave a comment below or in the forum. Thanks!
Just a couple quick questions about the NISA.
You can open a NISA at most banks. I see you use Rakuten. Are you happy with them. Do you have any other suggestions?
We should be able to put in more than 400,000 max for the tsumitate. Is it possible to open both types of NISA at the same time? I would imagine maxing out the tsumitate first would be best, and anything extra would go in the normal NISA. Do you agree?
Hi Bob
I would recommend one of the big online brokers (Monex -> SBI -> Rakuten) in that order but there isn’t much in it.
You can only have one NISA account each year (tsumitate or ordinary) although you can open one for each family member.
Hope that helps!
I’m interested in opening a NISA but wondering about your comment of it not being good for US citizens, could you explain why? (I’m a dual citizen)
Also, does your guide offer advice on which brokers are more “foreigner-friendly” in terms of language? (as in, offers some guidance in English)
Finally, noticed that your link to the forum seems to be mis-formatted, it brings up a 404 page (^^;
Hi Jeff
Thanks for the heads-up about the dead link! Much appreciated.
My most recent research seems to indicate that US taxpayers should avoid NISA accounts too, as
1) they are not recognised as tax-advantaged by the IRS
2) can’t but Japanese mutual funds or ETFs (classed as PFICs)
3) most brokers won’t let you buy US-listed shares/ETFs (not sure why)
So the only option is to buy individual Japanese shares, and pay capital gains/dividend taxes as normal to the US.
Don’t know of any broker in Japan that provides English-language support. You need enough Japanese to handle registering/using the site, OR someone to help you, OR being able to fake it with online translation, etc.
So your best option might be to open an account with Interactive Brokers: http://www.retirejapan.info/blog/review-interactive-brokers
Whoah now. Why would he have pay capital gains tax to the US? Is that not included in the foreign earned tax exclusions that most US citizens take advantage of?
Not that I have stocks in any Japanese account, but are you saying that as a US citizen and I earn capital gains in Japan they will double taxed?! Short term capital gains tax in Japan is already outrageously high.
[I am neither a US citizen/taxpayer nor an accountant. Please consult professionals/the IRS for tax advice]
The US-Japan tax treaty should ensure you are not double taxed, but you’ll pay the higher of the taxes due. In a NISA account, the contents are tax-free as far as Japan is concerned, but the IRS considers it taxable.
As far as I understand, the foreign earned income exclusion thing only applies to *earned income*, so not to capital gains, dividends, etc.
Ah, taxes… even though I don’t earn enough to have to pay, I still have to file and absolutely loathe the process… that is certainly enough to make me reconsider the NISA if it’s going to complicate the tax process even more 🙁
I’d love to have better news, but I’m not sure it makes sense for US taxpayers…
Ben my wife and I have a question that might be able help other people when they come across this. We tried googling it and still were not 100% sure which option to choose when opening a NISA account and not sure if we can change down the line.
Option 1: 開設する（源泉徴収あり）
Open (withholding tax withheld)
Option 2: 開設する（源泉徴収なし）Open (not withholding tax)
Hi Bob
I believe the first option means the broker will calculate and deduct taxes for you, then send you a ‘statement’ (gensenchoushuu) at the end of the year.
The second option means they will not, so you would be expected to calculate your own taxes and report them to the tax office yourself.
For most people, the first option is much simpler.