RetireJapan

Hi all,

I may have the chance to temporarily move to the USA, and I'd like to know about the implications:

My situation:

- Permanent resident in Japan. 20+ years living here. Single. Don't have Japanese nationality (yet).
- Own a house in Saitama, paid with a Flat35 loan. Still have 20+ years left to finish paying the balance on the loan (assuming I don't die first).
- Have a NISA account with Rakuten with a decent number of assets in it: some individual stocks, but mostly Vanguard ETFs and eMaxis funds.
- I have a Defined Contribution account with my company (東京海上日動), similar to a 401k, with monthly contribution maxed out.
- 5+ years working for my current employer

The opportunity:

I may have the chance to get transferred to my company's HQ in California and work there for 2 to 5 years, and during that period I would have an adjusted USD salary equivalent to roughly 3 times my current JPY salary.

What I'm wondering is what would happen to the housing loan, the NISA account and the 401k:

- House and house loan: if possible I would like to keep the house and continue paying the loan from abroad. I would be fine renting it out while I'm in the USA, but keeping it empty (and have some company come regularly to keep everything in decent condition) would be fine too. Is this realistic?

- NISA account: Can I keep it active and send money from the US to continue investing while abroad?

- 401k: My company (the Japanese branch) keeps paying the monthly contribution, but I assume that won't be the case while I'm being paid by the US HQ. Can this account be "frozen" and then resumed when I come back to Japan?

I've never been in this situation, so there's a lot of stuff I don't know about. I appreciate all and any advice.

Hi Javi

The good news is that being transferred abroad by a Japanese company for a specific amount of time is something that banks are familiar with and are often willing to work with.

You will need to check with your bank, but

1. keeping house and paying loan should be completely fine. If your bank agrees you will also be able to rent it out while away.
2. if bank agrees you can keep your NISA but not contribute while you are living abroad
3. you will need to check with your company about the DC plan, but the worst case scenario is that it will be frozen while you are away and you can resume contributions when you come back

Anyone else?

While you are in the US you will need to follow US tax reporting rules. Your investments in that NISA sound like they are PFIC's. (There is some indication that when they are part of a plan run by your employer that there maybe an exemption to the PFIC reporting rule so your company defined contribution plan might or might not be exempt from this problem.) For US tax reporting they are a bit of a nightmare with an almost impossibly difficult reporting form (Form 8621) and the highest possible applicable tax rate. Probably tens of thousands of people similar to you who go to work temporarily in the US don't know that this reporting rule exists and inadvertently don't follow it. I'm not sure that this should at all inhibit you from taking advantage of this opportunity, but it's a compliance risk that is worth keeping in mind.

https://expattaxprofessionals.com/blog/ ... -reporting
https://www.irs.gov/instructions/i8621

Our son-in-law was transferred sort of like this. They've left their house empty, but I think the company has someone come by to do basic garden work, enough so that it doesn't get overgrown (I don't think they go in the house at all). Personally, I'd think renting would be a can of worms--too many potential issues with renters, IMO.

Their move was paid for and otherwise facilitated. All household goods were shipped, a portion by air, the rest sea freight (likewise, they'll be moved back in the same way). Visa applications, too--the wheels were greased on that (our daughter is dual japan/US, but husband and kids needed visas). Paid trips to the embassy for that. Flights paid, with yearly 'home' visits, too. Apartment hotel at first (x6weeks?) until they rented, help with bank accounts there, too (and renting in the US, you need background and credit checks, so having an employer to help with this is important).

Tax services both here and there are included. Not so important here, but having a CPA on call to do your taxes in the US would be a real benefit.

I'm very sure they both still have open bank accounts here, tho I don't know the details. Our daughter did switch some mailings to our address. Maybe you could use someone at your company?

For them, the possible stay was tagged as 2-5yrs (and they're coming up on the second anniversary there), but no talk of returning. One comment from our daughter last summer was that they might stay longer. Which depends somewhat on the company finding someone to replace him there (it's a rotating position)--if yes, then maybe closer to five years, if not then maybe longer?

Good luck!

Hi Ben!

RetireJapan wrote: ↑Thu Nov 16, 2023 1:06 am The good news is that being transferred abroad by a Japanese company for a specific amount of time is something that banks are familiar with and are often willing to work with.

You will need to check with your bank, but

1. keeping house and paying loan should be completely fine. If your bank agrees you will also be able to rent it out while away.

That's good to know. Do you think the loan interest will go up? The super-low interest rate is based on the assumption that that house is my primary residence, but that won't be the case during the period I'm working abroad.

RetireJapan wrote: ↑Thu Nov 16, 2023 1:06 am 2. if bank agrees you can keep your NISA but not contribute while you are living abroad

What about transferring money to my Rakuten Securities account and investing in the 特定口座 instead? Do you think they would allow that?

Thanks!