(Advice Sought) Savings/Investment Options If I am Posted Overseas Temporarily

[LivinginJapan]

Hello,

I am seeking some overseas-posting advice. My situation is slightly complicated and spans multiple categories in the "RetireJapan Forum."

Background:

My Japanese company is sending me (late 50s, non-Japanese with PR) and about 17 other employees (all Japanese) overseas to X country, possibly starting in fall 2024, but more likely to be 2025. Some of us will be there for 4-5 months each year (I'm told that I am in this category); some will move there with their families.

Last fall, I was told that we would remain employed by our company here in Japan and paid here in Japan, but now there's talk that we will be employed by the new branch in the host country, which hasn't been formally set up yet. It's unclear where we will be paid. Similarly, no info yet on employees like me who are slated to be overseas for less than half a year.

My company says that they are trying to arrange for us to remain categorized as tax residents of Japan, but they are still negotiating with X country. They suggest to me to prepare for both scenarios: "Japan resident for tax purposes" and "non-resident for tax purposes."

As I will be going back and forth between the countries, as my spouse and university-aged child are here, I would prefer to keep "Japan-resident-tax-status," if at all possible (am I being too optimistic?). I realize that de-registering my address, at least temporarily, is a very real possibility.

I've gone through the wiki (https://retirewiki.jp/wiki/Residency_for_tax_purposes), which is a *great* document, but still have some questions.

Current financial situation: I have some savings, but not a lot because I only started working full time from about 44 years old. I have an iDeCO which I started in mid-2022. I had planned to start a “legacy” tsumitate NISA at Rakuten this summer/fall.

Here's a few questions that I have so far.

1. Savings accounts: Does anyone have any experiences to share about being able to keep my bank accounts for my life insurance, credit cards, and other monthly payments, i.e., family living expenses? Any suggestions about banks? I've read some posts about Prestia as well as the above-noted wiki, but am still confused.

2. NISA: Would it make sense to invest in a legacy tsumitate NISA for 2023, and (possibly one year of) the new NISA in 2024? Or should I just wait and see what happens with my company's negotiations about the "resident/non-resident" tax status? I fully realize that I might have to "cash out" the NISA. If that happens, how difficult is that to do?

3. Other investment options: Ultimately, do I have any other investment options?

Many thanks in advance for your advice or suggestions.

[captainspoke]

You might also ask at https://www.reddit.com/r/JapanFinance/

I have a son-in-law that was posted abroad, but for 2-5yrs (likely the longer period)--both he and my daughter broke residency here, and while he is employed by the associated company there, he hasn't really quit his job here (somehow?).

The company here has arranged to have their tax reporting done for them, both here and there, something that in your situation may (or not?) be trickier/more important.

[LivinginJapan]

Thank you, captainspoke, for your reply and for writing about your family's situation. I'll check out Reddit too. Much appreciation.

[TokyoWart]

If you are only going to be out of the country for a few months each year I don't think that would be a reason to break residency. In fact, if you're away for less than 6 months (or half the year in enumerated days) I doubt that you can avoid staying a tax resident in Japan, at least based on what I have seen from Japanese work colleagues posted overseas for limited 3-5 month time periods. Some of my family members (non-Japanese PR holders) have been outside Japan for several months at a time (e.g. for school) and that did not require cashing out NISA accounts. We didn't even tell their Japanese banks about the temporary absence but I don't think that was a violation of any rules since they were staying tax residents in Japan.

What you need to do might depend in part on the tax and visa rules for wherever you are being posted. Some countries are pretty voracious in collecting taxes for even a few months of working within their boarders and you might want to consult your local tax office in Japan to make sure you're able to apply the foreign tax credits in Japan for salary that was earned and taxed overseas.

[LivinginJapan]

Thanks, Tokyowart! I'll definitely check into that half-year (183 days?) aspect and discuss it with my employer. Much appreciation!