Moving outside of Japan

[Darren]

Hello everyone, I'm Darren, a third-generation Japanese citizen living in Japan. Despite my Japanese heritage, I unfortunately didn't learn to read or speak Japanese. I'm here hoping to get some advice. I've been investing in both the old NISA and the new NISA that started this year. I'm also planning to get married in the US soon (American fiancé), but I have no intention of becoming an American citizen. We might move to the US soon after (greencard). My question is, can I continue investing in my NISA account and possibly even iDeco? I haven't started iDeco yet, but it's on my radar. What are the things I can and cannot do if I move out of Japan regarding my investment accounts? I can use my parents' address if that is needed to maintain my brokerage account.

[Tkydon]

No, you will not be able to make contributions to invest in iDeCo and NISA if / while you are not resident in Japan.

As a Japanese citizen, you will be able to make voluntary contributions to the Japanese National Pension from overseas.
https://www.nenkin.go.jp/service/scenebetsu/kaigai.html

You will need to be careful when you receive your US Greencard that you don't fall foul of PFIC. (Others can elaborate)

You said you won't, but if you did decide to take US Citizenship by Naturalization, you need to be aware that you will at that instant lose your Japanese Citizenship and Passport.
https://www.moj.go.jp/ENGLISH/information/tnl-01.html
Article 11 refers.

You may not be made aware of the fact at the time, but you will be informed of the fact when you try to renew your passport.

If you have children in the US, and you want them to inherit Japanese Citizenship, you will have to register their birth within 90 days at the local Japanese Embassy or Consulate, or they will not be eligible for Japanese Citizenship. If registered within 90 days of birth, they will then be Dual Nationals by Birth. This is different than taking a different nationality by Naturalization.
Article 12 refers.
Also
https://www.la.us.emb-japan.go.jp/itpr_en/m02_04_01.htm

It depends where you get married, but if you get married in the US, you will also need to register your marriage at the local Japanese Embassy or Consulate to create your new Koseki Tohon with you as the Head of Household.
https://www.la.us.emb-japan.go.jp/itpr_en/m02_04_02.htm

[Darren]

Thank you Tkydon

No, you will not be able to invest in iDeCo and NISA if / while you are not resident in Japan.

Can I leave whatever I have already invested before moving out of Japan until I need the money during retirement?

Another option I am considering, not sure if it is possible, is to keep my residency in Japan, since I will need to come back once a year since my parents are still here. Will that plan result in having to pay double taxation (US + Japan)?

you need to be aware that you will at that instant lose your Japanese Citizenship and Passport.

Yes I am aware, I don't see any advantage in switching my Japanese citizenship for American that's why I'm keep it.

[Tkydon]

Thank you Tkydon

No, you will not be able to invest in iDeCo and NISA if / while you are not resident in Japan.

Can I leave whatever I have already invested before moving out of Japan until I need the money during retirement?

Yes, you can leave it to ride, and pick up contributions if you come back to Japan to live anytime...

Another option I am considering, not sure if it is possible, is to keep my residency in Japan, since I will need to come back once a year since my parents are still here. Will that plan result in having to pay double taxation (US + Japan)?

No, you would not want to do that. You'd be on the hook for income tax on global income, residents taxes and heath insurance contributions, etc..

You want to issue the Notice of Moving Out when you transfer overseas, and the Notice of Moving In when you come back to live for any reasonable period of time, but the rest of the time you don't need to issue the Notice of Moving In/Out if you are only visiting for short periods. You will then be treated as Non-Resident for Tax Purposes.

you need to be aware that you will at that instant lose your Japanese Citizenship and Passport.

Yes I am aware, I don't see any advantage in switching my Japanese citizenship for American that's why I'm keep it.

Just making sure...

[adamu]

You will need to be careful when you receive your US Greencard that you don't fall foul of PFIC. (Others can elaborate)

This might be the biggest point in Tkydon's post. I'm not sure of the details, but it might pragmatically mean basing all your investments in US brokerages instead of Japanese ones. You may have to sell all your Tsumitate portion NISA investments, convert everything in the growth portion to individual stocks, sell any other mutual funds (and maybe ETFs) you have in Japanese brokerages (including Old NISA), and convert your iDeCo to cash only, all before getting the green card to avoid issues. But again, I'm no expert on this.

[Darren]

No, you would not want to do that. You'd be on the hook for income tax on global income, residents taxes and heath insurance contributions, etc..

Not related to NISA, but you mentioned about health insurance contributions, do you guys have any idea if I can keep paying for my health insurance even if I am no longer a Japanese resident? We all know about the horrors of the US health insurance system, that’s why I want to keep my Japanese health insurance if possible.

You will be able to make voluntary contributions to the Japanese National Pension from overseas.

I was actually reading this article from RetireJapan https://www.retirejapan.com/us-citizens ... d-holders/ about Kokumin nenkin kikin. It mentioned something about being able to contribute to the fund even if you move overseas. Right now I fall under category 1 (Freelancer) of the national pension, which qualifies me for the National Pension Fund.

it might pragmatically mean basing all your investments in US brokerages instead of Japanese ones.

Yeah, I might just do that if it means keeping life less complicated. I wonder if Japan allows dual citizenship and if having it would minimize most of this complexity.

[Tkydon]

No, you would not want to do that. You'd be on the hook for income tax on global income, residents taxes and heath insurance contributions, etc..

Not related to NISA, but you mentioned about health insurance contributions, do you guys have any idea if I can keep paying for my health insurance even if I am no longer a Japanese resident? We all know about the horrors of the US health insurance system, that’s why I want to keep my Japanese health insurance if possible.

You will be able to make voluntary contributions to the Japanese National Pension from overseas.

I was actually reading this article from RetireJapan https://www.retirejapan.com/us-citizens ... d-holders/ about Kokumin nenkin kikin. It mentioned something about being able to contribute to the fund even if you move overseas. Right now I fall under category 1 (Freelancer) of the national pension, which qualifies me for the National Pension Fund.

Not Kokumin Nenkin Kikin. You can only contribute to that is you are in employment in Japan.

Kokumin Kiso Nenkin
https://www.nenkin.go.jp/international/ ... nsion.html
while you are out of Japan.

https://www.nenkin.go.jp/service/scenebetsu/kaigai.html

it might pragmatically mean basing all your investments in US brokerages instead of Japanese ones.

Yeah, I might just do that if it means keeping life less complicated. I wonder if Japan allows dual citizenship and if having it would minimize most of this complexity.

You can invest in Stocks through Growth NISA...

[torata]

You will need to be careful when you receive your US Greencard that you don't fall foul of PFIC. (Others can elaborate)

This might be the biggest point in Tkydon's post. I'm not sure of the details, but it might pragmatically mean basing all your investments in US brokerages instead of Japanese ones. You may have to sell all your Tsumitate portion NISA investments, convert everything in the growth portion to individual stocks, sell any other mutual funds (and maybe ETFs) you have in Japanese brokerages (including Old NISA), and convert your iDeCo to cash only, all before getting the green card to avoid issues. But again, I'm no expert on this.

I looked into what happens to NISA investments if you go abroad and are non-tax resident in Japan for say a year.
If I've understood correctly, although in principle the Nisa can continue to run (as Tkydon says), it appears that the brokers can apply their own rules, including asking you to shut the account down
https://fpsdn.net/csltg-case/start-nisa/2610
Now this advice was for old-Nisa. I'd have thought there needs to be a reevaluation of the rules that securities companies can apply since the holding period has gone from 5 years to 20+, so there's a bigger financial impact and also more people potentially being caught during this time span.

if anyone has any updated comments that would be useful.
torata

[adamu]

You will need to be careful when you receive your US Greencard that you don't fall foul of PFIC. (Others can elaborate)

This might be the biggest point in Tkydon's post.avoid issues. But again, I'm no expert on this.

I looked into what happens to NISA investments if you go abroad and are non-tax resident in Japan for say a year.

The point is less about being Japanese tax resident, and more about what restrictions becoming a green card holder bring.

There's not much use figuring out whether you can keep the account if you can't keep most of your investments anyway.

[torata]

This might be the biggest point in Tkydon's post.avoid issues. But again, I'm no expert on this.

I looked into what happens to NISA investments if you go abroad and are non-tax resident in Japan for say a year.

The point is less about being Japanese tax resident, and more about what restrictions becoming a green card holder bring.

There's not much use figuring out whether you can keep the account if you can't keep most of your investments anyway.

Adam
I take the point about US tax treatment of assets held overseas, but the wider question of 'what happens to my NISA if I move overseas permanently or temporarily' is probably useful to a number of people.
Having looked further, you can only continue to hold a NISA if it's a company transfer or you're accompanying spouse, so the answer to the original poster's question: " My question is, can I continue investing in my NISA account" is 'No, you can't even continue to hold it.'

torata