Foreign residents can open a NISA in Japan to invest tax-free in stocks, ETFs, and mutual funds.
NISA allows capital gains and dividends to grow without taxation, making it accessible to expats with valid residency.
This article covers:
- What is Japan’s NISA tax-free investment scheme?
- Who is eligible for a NISA?
- What is the limit of NISA in Japan?
- What are the benefits of a NISA account for foreigners?
- What are the risks of a NISA account for foreigners?
Key Takeaways:
- NISA provides tax-free growth, not tax deductions.
- Foreign residents with valid residency can open NISA accounts.
- Investments can be withdrawn anytime within limits.
- NISA is not a pension, but a flexible investment tool.
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The information in this article is for general guidance only. It does not constitute financial, legal, or tax advice, and is not a recommendation or solicitation to invest. Some facts may have changed since the time of writing.
What is NISA in Japan for foreigners?
Nippon Individual Savings Account (NISA) is a government-backed investment account in Japan that allows both capital gains and dividends to grow completely tax-free.
It is designed to encourage long-term savings and investment among residents.
NISA accounts can hold stocks, ETFs, and mutual funds, providing flexibility for different investment strategies.
Can foreigners invest in NISA?
Yes, foreign residents in Japan are eligible to invest in NISA accounts as long as they have a valid residency status.
This includes expatriates living and working in Japan with a residence card. However, non-residents or short-term visitors are not eligible.
Who can open a NISA account?
You can open a NISA account if you are a legal resident of Japan with a valid residence card, are at least 18 years old under the 2024 NISA rules, and have a My Number for identity verification.
Parents and guardians can also open a Junior NISA for minors under 18.
What is the monthly limit for NISA for foreigners?
There is no monthly limit specific for foreigners using NISA; only annual contribution caps apply, which range from ¥1.2 million to ¥3.6 million per year.
The limits are:
- Tsumitate quota: ¥1.2 million annually
- Growth quota: ¥2.4 million annually
- Combined total: Up to ¥3.6 million
Foreign residents can invest monthly or in lump sums as long as they stay within these yearly caps.
What are the benefits of a NISA account for foreigners?
The main benefit of NISA for foreigners is tax-free investment growth, along with flexible access and straightforward eligibility for residents.
- Tax-free growth: Capital gains and dividends earned within a NISA account are exempt from Japanese taxes. This allows your investments to compound faster over time, as you do not lose a portion of your returns to income tax.
- Flexible withdrawals: Money can be withdrawn from a NISA account at any time without penalties or lock-in periods. This gives investors freedom to access funds for emergencies or other financial needs while still enjoying tax-free growth on remaining investments.
- Supports long-term investing: The Tsumitate NISA quota encourages smaller, regular contributions, promoting a disciplined investment habit. Over time, this approach helps build wealth steadily and reduces the impact of market timing risks.
- Easily accessible: Foreign residents with valid residency status can open NISA accounts at major banks or online brokerages. Most institutions offer English support and straightforward processes, making it relatively simple for expats to start investing in Japan.
How risky is NISA for foreigners?
The primary risk for foreigners using NISA is market volatility, though currency fluctuations and the lack of guaranteed returns can also affect overall performance.
- Market risk: Investments in stocks, ETFs, and mutual funds can rise or fall depending on market conditions. Economic changes, company performance, and global events can all impact the value of your holdings.
- Currency risk: Foreign residents who earn or transfer money in other currencies may face losses due to exchange rate fluctuations. Even if your investments grow in yen, unfavorable currency conversion could reduce returns when converting back to your home currency.
- No guaranteed returns: While NISA provides tax-free growth, the investments themselves are not insured or guaranteed. This means that poor investment choices or market downturns can result in losses, despite the tax advantages.
Can I withdraw money from a NISA?
Yes, NISA allows flexible withdrawals at any time.
However, withdrawn amounts cannot be re-contributed within the same year without exceeding annual limits.
This flexibility makes it suitable for both short-term needs and long-term investment planning.
How to join NISA as a foreigner?
Foreigners can join NISA by confirming eligibility, choosing an account type, selecting a financial institution, and completing the required application and ID verification.
1. Confirm eligibility. You must be a legal resident of Japan with a valid residence card, a My Number, and be at least 18 years old under the current NISA rules.
2. Choose your NISA account type. Decide whether you want the Tsumitate NISA, the Growth NISA, or both quotas depending on your investment goals.
3. Select a financial institution. Choose a bank or securities firm that accepts foreign residents and offers the investment products you want.
4. Prepare the necessary documents. Typically your residence card, passport, and My Number card or notification letter.
5. Submit your NISA application. Fill out the forms provided by your chosen institution and complete identity verification.
6. Wait for approval. Processing can take several days to a few weeks.
7. Fund your account. Transfer yen from your Japanese bank account to your NISA account.
8. Start investing. Purchase eligible funds, stocks, or ETFs within your annual contribution limits.
Conclusion
NISA offers foreign residents in Japan a simple way to invest with tax-free growth while maintaining flexibility over contributions and withdrawals.
It is not a pension and does not guarantee returns, so understanding the account’s limits, risks, and benefits is essential.
For expats, NISA can serve as a practical tool for building long-term wealth while taking advantage of Japan’s supportive investment framework.
FAQs
Which bank is best in Japan for foreigners?
The best bank for foreigners in Japan is generally considered SBI Securities, due to its ease of account opening, online access, and English support.
Other top options include Rakuten Securities, Monex, Mitsubishi UFJ Securities, and SMBC Nikko Securities, which also accept foreign residents with a valid residence card and My Number.
Is a NISA the same as a pension?
No, NISA is not a pension. Pensions in Japan provide long-term retirement income and often include tax-deductible contributions.
NISA is primarily an investment account for wealth accumulation with tax-free growth but no upfront deductions.
How to claim a tax refund in Japan for foreigners?
Foreign residents who qualify as tax residents can claim a refund on overpaid income tax by submitting a final tax return to their local tax office.
The process can often be completed online or by mail, but many foreigners choose to visit the tax office counter in person for guidance, especially if it is their first time filing.
NISA itself does not provide refunds, since investments within a NISA account are already tax-free.
Is Japan paying foreigners to move there in 2025?
Yes, Japan offers financial incentives to both Japanese citizens and foreigners willing to relocate to rural areas.
Programs such as the Regional Revitalization Corps provide participants with a salary of approximately 3 million yen ($19,000) to live and work in rural communities for at least one year, with the option to stay up to three years.
Other initiatives under the Regional Revitalization Program offer up to 1 million yen per child for families or 600,000 yen for single individuals moving from major cities like Tokyo.
Applicants must meet specific conditions, including committing to live in the designated area for a set period and securing employment or starting a business.
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