Closing investment, want to send to Japan in USD

[catkin22]

We (Japanese and American) have a joint investment contract that is ending (Isle of Man). The funds are in USD. We want to send the funds to Japan. US partner may still have US taxes to pay on the funds, so we want to keep them in USD. Japanese partner's Japanese bank even suggested opening an online bank account instead of sending to a physical bank. The Japanese partner has opened a Wise account (arranged Japanese yen and US dollar ones), and as well, US partner does not want to open a Japanese bank account (like at Shinsei), even if possible at this point in time.

The problems is that the investment company seems resistant to sending funds to the Wise account. Has anyone experienced this? We have no problem telling them where the funds came from or what we will use it for. But we don't know what to do to get them to use the Wise account.

[imaginatorium]

How are you asking them to send to Wise? Normally the whole point of Wise is that with a transfer from anywhere in UK banking territory (the IoM is not in the UK, but is in the sterling area), you get a sterling local transfer (bank giro credit), which costs almost nothing. If you ask them to do some sort of international transfer in USD, I can't see how you would save by using Wise; just send it to any bank account in Japan. But I'm not American, so I don't understand anything about how US taxes work or whatever.

[TJKansai]

You can set up a USD account at most (?) Japanese banks.

NEObank (SBI) and Prestia are what my wife has.

Incoming funds in a foreign currency will stay in that currency.

Japan doesn't have joint accounts, so it will have to go to one of the owners on the contract.

[catkin22]

How are you asking them to send to Wise? Normally the whole point of Wise is that with a transfer from anywhere in UK banking territory (the IoM is not in the UK, but is in the sterling area), you get a sterling local transfer (bank giro credit), which costs almost nothing. If you ask them to do some sort of international transfer in USD, I can't see how you would save by using Wise; just send it to any bank account in Japan. But I'm not American, so I don't understand anything about how US taxes work or whatever.

To close the contract, it asks where to send the funds. The funds are now in USD, to use a Wise UK account, we have to accept in Sterling, then convert back to USD, or into yen. We can't split the funds into US partner's actual USA bank account and Japanese partner's Japanese bank account. It is not so much a matter of saving, but of keeping the funds in USD, and being able to switch to yen and/or being able to, later, send to someone in the US.

[captainspoke]

I've had money sent in, to shinsei, USD. There was no arrival/processing fee, and it went into a USD sub account. My suggestion would be for one of you to open an acct there (or Sony, or some others with similar accounts).

Since you mention that you'll later be sending USD to someone in the US, maybe that person (who'll be sending money on) should be the one to open the account. (so then no additional transfer needed within japan--from the receiving account to the one that you'd be sending it on from)

I'm not sure of the 'danger' involved for a US citizen, but when that person opens the account they'll need to provide SSN, and maybe some other US info. Since you say this is coming from IoM, I'll guess that it may be some kind of offshore investment that has not been reported on an FBAR and/or tax returns. If all (or half) of it goes into the US partner's account here, then it should be reported on the next FBAR cycle, a year from now (even if it only goes thru the account overnight). Also, there is an IRS form that turbotax asks about (form 8938), and for a single filer, I think the threshold for that is US$200k--under that and no need to submit it, over that and it should be included with the US return. So somehow, at some point, the money gets revealed to algorithms at the dept. of treasury and IRS.

I'm not sure what raises flags for FATCA/FBAR, or if it is funds that go above that 200k level, or what. And on the japan side, if the amount is above $10k/¥1M, probably any bank here will ask you about the source of the funds, and the NTA here may give you a call, too (the bank will very likely notify them). One way to delay the possible reckoning on the US side, would be for the japanese partner to receive to money, and hold it and then pass it along to the US partner as needed. But then for japan that person may have to assume tax responsibility for it, later transfer may look like gifts, and so on.

Good luck!

[imaginatorium]

I appreciate you might not want to give every detail of the personal relationships and so on, but sometimes you say "We can't", and it really is not clear whether you mean "We don't want to" or "Our current understanding of the world is that is it not possible to". For example, if the funds are essentially 50-50 owned by the two partners, and you are sending to a country in which joint ownership is not recognised, then it might be important for tax reasons to send the two parts separately, and the investment company really should cooperate with this. (Doesn't mean they will, of course.)

Equally, I don't understand why you want to send to a Wise account, because sending to any USD account in Japan is likely to be equivalent, nor how you determine that they are "resistant" to sending to Wise. If you give them SWIFT/BIC details for the Wise account, what do they say?

[catkin22]

I appreciate you might not want to give every detail of the personal relationships and so on, but sometimes you say "We can't", and it really is not clear whether you mean "We don't want to" or "Our current understanding of the world is that is it not possible to". For example, if the funds are essentially 50-50 owned by the two partners, and you are sending to a country in which joint ownership is not recognised, then it might be important for tax reasons to send the two parts separately, and the investment company really should cooperate with this. (Doesn't mean they will, of course.)

Equally, I don't understand why you want to send to a Wise account, because sending to any USD account in Japan is likely to be equivalent, nor how you determine that they are "resistant" to sending to Wise. If you give them SWIFT/BIC details for the Wise account, what do they say?

The funds have been reported on FBAR and US tax reports. We want to keep the funds in USD until after the 2022 tax report is finished (by end of 2023?). We asked and the investment company told us that they will not send funds to Wise. We are aware that Japan does not have joint accounts. So we want to find another way to bring the funds to Japan. It seems that Prestia may work since Japanese partner has an account there already, and should be able to open a multi-currency account without too much hassle (should being the operative word).

For US tax purposes, any withdrawal from the contract is liable for US taxes on half of the amount. So spliting the total into two payments and sending to two separate accounts is just extra work. Both payments have to be reported to US IRS.

(Side note: Even if we can't use Wise for this transaction, Japanese partner was disgusted enough with the response received from the other Japanese bank to create a Wise account. We can use it for sending money to family in the US.)