Transferring shares from Japan brocker to overseas

[kanga]

Hi All.

I'm looking at transferring a bunch of shares from a japanese broker to overseas.
Did some googling around, and found this is not very commonly done in japan.
has anyone attempted to do this, and if so, with who?
I'd hate to have to sell/rebuy as there'd be capital gains to pay, for the broker's lazyness.

Thanks

[Jamo]

Interesting question. I've never tried, but I assume it would be a very time-consuming process if it were possible.

Have you asked your Japanese broker?

[kanga]

I haven't yet.
US <-> AU was pretty much hassle free.
at the end of the day, unless it's a managed fund, you the owner of the shares..
worst case scenario they could give you the stock certificate, and you give it to the new broker..
but I haven't had enough experience in Japan to know how they operate.

[sutebayashi]

It may depend on your broker.
The Nomura page says they only do domestic broker transfers.
http://www.nomura.co.jp/support/procedu ... /ikan_out/

[adamu]

I'm fully expecting to have to liquidate everything, including USD stocks, to JPY and close the account if I move country. SBI also say they only transfer to domestic brokers.

https://www.sbisec.co.jp/ETGate/WPLETmg ... n_out.html
国内の他の証券会社へお振替えいただけるサービスです。

And that they don't provide the underlying stock certificate, which is the only other way I could see this being possible.

http://faq.sbisec.co.jp/faq_detail.html ... ry=&page=1
株券の引き出しは対応しておりません。

Maybe the only way would be to first transfer to a broker that does do international transfers or issue stock certificates, then do it from there?

[anjin]

I looked into this, specifically to avoid having to sell everything and pay capital gains if leaving Japan. All the Japan based brokers I checked would close your account on leaving and wouldn't transfer assets to an overseas broker, with the exception of Interactive Brokers Japan (IBSJ). I contacted them and they stated that on leaving Japan they could transfer positions to an overseas broker. They are a domestic (Japanese) broker so can also accept incoming position transfers from other Japan based brokers.

One possible route then would be to open an account with IBSJ in Japan and an account with Interactive Brokers US (IBLLC), transfer positions from whatever domestic brokers (Rakuten, SBI etc) to IBSJ and then transfer from there to IBLLC. IBLLC will let residents of any country hold an account.

There may be limitations on the type of positions that can be transferred, e.g. Japan or non Japan based.

In the end I decided it would probably work, but I didn't want to take any chances of having to pay 20% of all gains if I leave Japan. So I just skipped to the end and held everything at IBLLC - you have to file the dividend/capital gains taxes yourself every year but there's no risk of capital gains on your entire investment if leaving Japan.

[Ori]

Anjin,

Thank you for sharing this information!

I am considering leaving Japan in 2-3 years, and possibility of having to pay capital gains pretty much stops me from doing any investing beyond NISA and company DC.
I'm wondering what are disadvantages of using IBLLC and IBSJ vs. Japanese brokers, especially for non-US citizens?
I guess IBLLC doesn't provide access to NISA, iDeco and Japanese funds, all funds are USD denominated, dividends are taxed, and probably one would need to fill in US tax forms, even if not US citizen? Anything else?
From their FAQ I also see that in case of IBLLC "if there are no transactions after 3 months, you will be charged inactivity fee of 10USD" and "You would need to do an international wire transfer for funding IBLLC accounts".
Considering all above, IBLLC doesn't look very attractive to me at the moment, but what about IBSJ? Is it better or worse than SBI, Rakuten etc?
Can one open both IBLLC and IBSJ?

I guess one advantage of IBLLC would be that they probably wouldn't be obliged to disclose information about one's assets to his/her spouse (in case of divorce), as they are not under Japanese law?

[anjin]

I'm wondering what are disadvantages of using IBLLC and IBSJ vs. Japanese brokers, especially for non-US citizens?
I guess IBLLC doesn't provide access to NISA, iDeco and Japanese funds, all funds are USD denominated, dividends are taxed, and probably one would need to fill in US tax forms, even if not US citizen? Anything else?

Disadvantage of using a non JP broker is no NISA, no iDeco and tax reporting - you will have to file a JP tax return for any gains (dividends/interest and realised capital gains) in the account. The tax you pay is the same as if using a JP broker, just with the JP broker they can take it automatically. Some additional points - if the income is less than 200,000 jpy it doesn't have to be reported/tax paid in Japan. If you invest in accumulation (dividends internally reinvested) funds and don't sell anything then you will have no income to report, so won't have to file.

No need to file or do anything for US taxes. You can buy stocks on any exchange in the world (US, UK, European,) though IBLLC, except as a resident of Japan you can't use JP exchanges. IBSJ is opposite, can only use JP exchanges.

From their FAQ I also see that in case of IBLLC "if there are no transactions after 3 months, you will be charged inactivity fee of 10USD" and "You would need to do an international wire transfer for funding IBLLC accounts".
Considering all above, IBLLC doesn't look very attractive to me at the moment, but what about IBSJ? Is it better or worse than SBI, Rakuten etc?
Can one open both IBLLC and IBSJ?

IB is aimed more towards professionals and regular traders. The inactivity fee is waived if your account is over 10k/100k USD (I can't remember which, but it should be on the site somewhere...). They also have very low fees for trades and currency conversion, so even with an inactivity fee it may be comparable to other brokers depending how often you buy.

IBLLC has a Citibank JP account that you can use to fund through a Japanese domestic back transfer. If you transfer funds to other countries too they have bank accounts in many so you can withdraw/fund domestically.

You can open an account with IBSJ and IBLLC at the same time. IBSJ offers none of the advantages of a JP broker - no NISA, no tax withholding account, you have to file taxes.

I guess one advantage of IBLLC would be that they probably wouldn't be obliged to disclose information about one's assets to his/her spouse (in case of divorce), as they are not under Japanese law?

Haha I had not thought of this, I honesty have no idea. IB other advantages are very low cost currency conversion/remittance and English interface/customer service.

One thing I would say though is investing anywhere is better than nowhere even with CG tax on exit. You only pay tax on the gains, so leaving with 80% of your profit is better than leaving with 0% from not investing.

[Ori]

Thanks for the details. I need to think this through and run the numbers, but at the moment setup with NISA at SBI, savings in yen at IBSJ and savings in USD at IBLLC looks the most attractive.

One thing I would say though is investing anywhere is better than nowhere even with CG tax on exit. You only pay tax on the gains, so leaving with 80% of your profit is better than leaving with 0% from not investing.

Unless I will be very lucky and will have to sell when markets crash (it seems that everyone expects for it to happen anytime soon). Then I will basically have to pay taxes on the principle when stocks go up again.

[anjin]

I should just add that you can hold JPY cash and JPY denominated assests at IBLLC if you want to, just nothing traded on JP exchanges while you're JP resident. FWIW that's what I do - NISA at JP broker, and IBLLC account with mix of JPY/USD/GBP cash and assets. I did open an IBSJ account but closed it as I didn't need access to JP markets outside of the NISA.