RetireJapan

I'm a non-US citizien in my 30s and recently started to invest in an index fund for retirement. So far I used NISA with Rakuten, but I have some additional cash, so am thinking of iDeCo or just additional investment in a taxable account.
Now here it the problem: I am not sure whether I will stay in Japan long term. Currently I have 3.5 years left on my contract. There is definitely some possibility that I will leave Japan afterwards. So what is the better strategy:
1) Use a Japanese broker such as Rakuten. In the case I leave Japan, I would need to sell everything (except iDeCo which cannot be sold) and re-invest in my new country of residence.
2) Go for an international broker such as Interactive Brokers or Trading212. The problem here is that I would need to file a Japanese tax return, which sounds like a nightmare to me given my limited Japanese language skills.
I lean towards option 1), just because of convenience. But I would be very interested to hear if people have a strong preference for either of the options. For example, are there strong reasons why selling and re-investing everything should be avoided?

There is one additional advantage to using a Japanese broker. Any realized capital losses can be used to offset dividend income (they reimburse you at the end of December for dividend taxes withheld) if you use a Japanese broker but that is not possible when you use a foreign broker. Capital losses still offset capital gains in a foreign account but can't do so for dividend income. No one invests intending to have capital losses but this bit of a safety net can be helpful.

That's a good point, I wasn't aware of it. So I guess the only disadvantage of investing in Japan would then be the taxes that need to be paid in case I leave Japan (assuming there were capital gains). And there is some risk that the market changes strongly during the transfer to a new country. However, I also read on the forum (viewtopic.php?f=8&t=817) that accumulating ETFs held at a non-Japanese broker might not need to be declared to the Japanese tax office. Does anyone know if this is indeed the case?

rasselbiluga wrote: ↑Sun Nov 01, 2020 8:10 am That's a good point, I wasn't aware of it. So I guess the only disadvantage of investing in Japan would then be the taxes that need to be paid in case I leave Japan (assuming there were capital gains). And there is some risk that the market changes strongly during the transfer to a new country. However, I also read on the forum (viewtopic.php?f=8&t=817) that accumulating ETFs held at a non-Japanese broker might not need to be declared to the Japanese tax office. Does anyone know if this is indeed the case?

It is my belief that this is the case: if you don't receive dividends or make a capital gain, there is no taxable event to declare to the tax office.

However, you would probably need to declare their existence if your overseas assets went over 50m yen, and tax on unrealised capital gains would be due if you left Japan with over 100m yen's worth of investments.

Thanks for the advice. The deeper I dig, the more complicated it seems to get. Most of my savings are still on an interest-bearing US savings account (my previous country of residence). So if I wanted to invest with a Japanese broker, I would need to remit to Japan first. I am a non-permanent resident (less than 5 years in Japan). So according to this post I would need to file a tax return and pay taxes on the interest if I remit the money to Japan. So it actually looks like the only way to avoid filing a tax return in Japan is to invest in an accumulating ETF outside of Japan. Maybe I shouldn't be too afraid of the tax return though. I guess eventually I will figure out what's the better option. This forum is a really useful source of information.