US citizens and NISA

[RetireJapan]

Just a data point here, SBI will not let me (US citizen) purchase foreign stocks or mutual funds.
They do allow me to purchase Japanese stocks and ETFs, including in my NISA account.

Is a Japan-listed ETF not a PFIC (ie IRS poison)?

[DragonAsh]

In general, no, ETFs are *not* PFIC.
AFAIK, its because mutual funds are not actively traded (only priced once a day, after all the markets have closed),while ETFs, like individual stocks, are continuously traded and priced throughout the day.

[RetireJapan]

In general, no, ETFs are *not* PFIC.
AFAIK, its because mutual funds are not actively traded (only priced once a day, after all the markets have closed),while ETFs, like individual stocks, are continuously traded and priced throughout the day.

Really? That is huge then. So US citizens can use NISA accounts in Japan to buy Japan-listed ETFs? That changes quite a lot.

[gogakuhei]

[...]US citizens can use NISA accounts in Japan to buy Japan-listed ETFs?

Has anyone heard anything to support/contradict this? If the information is good, might this mean that US citizens could do the same (Japan-listed ETFs) in an Ideco account?

[RetireJapan]

[...]US citizens can use NISA accounts in Japan to buy Japan-listed ETFs?

Has anyone heard anything to support/contradict this? If the information is good, might this mean that US citizens could do the same (Japan-listed ETFs) in an Ideco account?

Sadly iDeCo only has mutual funds at the moment.

[coffeespoon]

Hello!

This is my first time posting. I am really happy to have found this form. Yoroshiku onegaishimasu.

This seems to be an old(ish) string of posts, but I have a couple of questions:

1. So does this mean that non-American spouses (for example, Japanese citizens) of Americans shouldn't buy foreign-listed mutual funds in NISA?
2.Even if they can buy those mutual funds, when the American fills out the US tax forms they would have to report this, right?
3. And gerdemb wrote "Mutual funds are basically off limits for US citizens due to punitive PFIC tax rules". So if your non-American spouse invests in mutual funds, do you have to pay a lot of tax on it?

Thanks for reading. Any advice would be appreciated.

[RetireJapan]

Hello!

This is my first time posting. I am really happy to have found this form. Yoroshiku onegaishimasu.

This seems to be an old(ish) string of posts, but I have a couple of questions:

1. So does this mean that non-American spouses (for example, Japanese citizens) of Americans shouldn't buy foreign-listed mutual funds in NISA?
2.Even if they can buy those mutual funds, when the American fills out the US tax forms they would have to report this, right?
3. And gerdemb wrote "Mutual funds are basically off limits for US citizens due to punitive PFIC tax rules". So if your non-American spouse invests in mutual funds, do you have to pay a lot of tax on it?

Thanks for reading. Any advice would be appreciated.

I believe the non-US spouse is unaffected, unless they have a Green Card or the US spouse is putting them on their tax return. Basically if they are filing a US tax form all the same problems are going to crop up, but if not there should be no relationship with the IRS

[coffeespoon]

I see. Thanks so much!

(and I just want to make sure I understand what people are saying here: Americans shouldn't use NISA or iDeco, yes?)

[RetireJapan]

I see. Thanks so much!

(and I just want to make sure I understand what people are saying here: Americans shouldn't use NISA or iDeco, yes?)

iDeCo in its current form? Probably not, although older Americans can use it for the income tax savings if they keep the contents in cash deposits.

NISA, if you can find something you want to buy that someone will sell you, should work. Believe you have to declare it to the US though as they don't consider it tax-exempt.

[hoshimo]

hello, just wondering if there has been any new news on this topic since the last post.
i'm a us citizen, currently using rakuten securities tsumitate nisa, 3万円/mo into eMIAXIS Slim 全世界株式（オール・カントリー）after looking at all the advice on the forum here. but just read a few posts on reddit with a few us citizens saying that they "can't do iDeCo nor NISA" which confused me a bit. am i good? or am i going to have to deal with a huge tax/irs mess? i tried looking through the forum, but couldn't seem to find a definitive "best practices for us citizens" anywhere. if there is a post like that, please let me know, thanks!