Has anyone here invested in Japanese stock or NISA?

TokyoJoeblow

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So the interest rates in Japan are really low, so I'm not really interested in opening up a "high interest rate" account because the interest rates aren't high enough.

I should have invested in a Vanguard account before leaving the US but I didn't.

I'm wondering if I open up a NISA account...would it be best to invest in Japanese stock specifically since it will be labelled yen to avoid losing money on exchange rate fluctuations?

I see that they offer a 5 year and a 20 year plan, which my Japanese friend helped explain to me a little. I'm still going to do more research on this.

If anyone on here has invested in NISA or stock here in Japan, do you invest in Japanese companies in yen or do you take chances investing in overseas companies in the US, England, Switzerland, Germany, etc regardless of the exchange rates?

I realize that this is a lot riskier than just investing in a low interest rate bank account, which will definitely increase in money but the amount I could make in stock is just so much higher.

I'm planning on investing in big companies that are well-established, since they are less likely to suddenly go out of business or suffer huge losses...then again I know these things happen to even the biggest companies.

Here is a link to a page about NISA for anyone interested: http://www.jsda.or.jp/en/activities/research-studies/html/NISA.html

Anyway, I would appreciate any help if anyone on here has experience with investing here in Japan.
 
You can only put in 1.2 million per year. Its hardly worth the effort.

Also re your question on which companies to buy stock in; i dont think you have access to individual stocks, it would be funds and funds of funds. You’d be putting your money with one or several fund managers who manage a portfolio of hundreds of different stocks, bonds and cash investments. They have access to these because your money is pooled with other investments.

For example you couldnt buy stock in your local pesticide manufacturer, but you could buy into an agriculture focused fund. This fund would have shares in various agricutural related companies, maybe some cash with JA bank etc. this way you are betting on ‘agriculture’ doing well over the next 5 years rather than the high rish strategy of 1 specific company doing well.
 
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Oh, and all the investments are in yen. Currency fluctuations would make all the investments high risk if it werent the case.
 
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Oh, and all the investments are in yen. Currency fluctuations would make all the investments high risk if it werent the case.

I think he was asking about only investing in Japanese companies as their stock prices are in yen or going abroad when stocks are priced in other currencies.

And the answer is that almost all big companies are global nowadays and it doesn't matter in which currency their stocks are listed. Toyota's share price will fluctuate based on the currency rates too as much of their sales are in other currencies than yen anyway.

If I was to invest in funds then rather than investing through a government controlled scheme I would find cheaper ways to put that money to work. The funds you can select through any of these schemes are severely limited, by my last look favoring the participating banks more than the individuals and then your money is also tied up there. The only positive is the tax breaks you might get and any time when something is sold to you by the tax breaks alone you should be extra careful.
 
TJB, I am absolutely 100% sure you will make a big pile of money from your brilliant secret idea for an iPhone app. I am also sure you will take that money and spin in into a giant fortune by shrewdly investing it in stocks, and I am sure you will, in a very short time, retire to the tropics where you will lounge in the beach bar swilling pina coladas all day. Great plan! I foresee only two impediments: The vast majority of apps make zero money for their inventors and the vast majority of stock market investors make next to zero money (over time and adjusted for inflation) from the stock markets. But I am sure you are different.
 
TJB, I am absolutely 100% sure you will make a big pile of money from your brilliant secret idea for an iPhone app. I am also sure you will take that money and spin in into a giant fortune by shrewdly investing it in stocks, and I am sure you will, in a very short time, retire to the tropics where you will lounge in the beach bar swilling pina coladas all day. Great plan! I foresee only two impediments: The vast majority of apps make zero money for their inventors and the vast majority of stock market investors make next to zero money (over time and adjusted for inflation) from the stock markets. But I am sure you are different.
This is an example of post types that drive people away from this site, please stop it. If there's nothing of value to post, please don't... and just move on.
 
Hey TJB sorry to be so negative. I have no real help to offer re your plans to make money off of apps. Good luck. As far as being an individual investor in Japan goes, I suggest you take a look at Retire Japan. There are bunch of gaijins on the bbs who have loads of experience with getting into stocks and other investments from Japan. Most of them are teachers and are here for the duration. Some of them seem to really know what they are talking about. They are all taking advantage of NISA and ideco. And they are all carefully building portfolios with the dream/plan of retiring young(ish) and living off the returns. Rather than talk about the currently hot or trendy stock, the conversation focuses on being tax efficient, paying minimal fees, and beating inflation by a few percentage points over the long term. There are also sections on settings up businesses and real estate investment. Good to have Dreams, but also good to have Plans.
 
Hey TJB sorry to be so negative. I have no real help to offer re your plans to make money off of apps. Good luck. As far as being an individual investor in Japan goes, I suggest you take a look at Retire Japan. There are bunch of gaijins on the bbs who have loads of experience with getting into stocks and other investments from Japan. Most of them are teachers and are here for the duration. Some of them seem to really know what they are talking about. They are all taking advantage of NISA and ideco. And they are all carefully building portfolios with the dream/plan of retiring young(ish) and living off the returns. Rather than talk about the currently hot or trendy stock, the conversation focuses on being tax efficient, paying minimal fees, and beating inflation by a few percentage points over the long term. There are also sections on settings up businesses and real estate investment. Good to have Dreams, but also good to have Plans.

Well, for the app...most of the money we would be making would not be from app downloads because we want to avoid making the app look ugly by putting ads on it. Most of the money we could (ideally) make would come from sponsors. The idea is good enough to where I believe some establishments would be willing to pay to let us advertise their place (in a non ad style fashion) on our app.

As for the stocks or just saving money through accounts, I believe this will be tougher but better than not attempting to invest at all. I have not heard of Retire Japan. Thanks, I will check it out.
 
You can only put in 1.2 million per year. Its hardly worth the effort.

Also re your question on which companies to buy stock in; i dont think you have access to individual stocks, it would be funds and funds of funds. You’d be putting your money with one or several fund managers who manage a portfolio of hundreds of different stocks, bonds and cash investments. They have access to these because your money is pooled with other investments.

For example you couldnt buy stock in your local pesticide manufacturer, but you could buy into an agriculture focused fund. This fund would have shares in various agricutural related companies, maybe some cash with JA bank etc. this way you are betting on ‘agriculture’ doing well over the next 5 years rather than the high rish strategy of 1 specific company doing well.

The amount of money you mention is correct but you do have access to individual stocks depending on where you open the NISA. If you open the NISA at the post office (a good option fee wise) or at a bank obviously you can’t invest in stocks. However, if you open it at a brokerage like Daiwa, Nomura, SBI, etc of course individual stocks are an option.

Unfortunately many Japanese stocks trade in 100 share lots that will blow through the 1.2 million JPY max per year. You can however sign up for “mini stock”investments at many Japanese brokers to get around that if you are prepared to pay slightly higher fees.
 
My understanding is that if you're a US citizen, you would not really benefit from NISA.

The IRS does not recognize the tax-advanatged status of a NISA account, so it would fall on you to show that it complies with the requirements, each year, because the investment companies don't want to touch the matter with a 30m pole. I don't recall exactly, but there was a site that explains the problems for US citizens pretty clearly.

TLDR version, for US citizens, if you invest in stocks with a NISA, you'll wind up in compliance hell with the IRS. You'll spend too much time and money trying to comply.

To avoid the hassle, you could alternatively keep everything in a NISA savings account. But then you wouldn't be getting the full benefits that NISA theoretically provides.
 
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My understanding is that if you're a US citizen, you would not really benefit from NISA.

The IRS does not recognize the tax-advanatged status of a NISA account, so it would fall on you to show that it complies with the requirements, each year, because the investment companies don't want to touch the matter with a 30m pole. I don't recall exactly, but there was a site that explains the problems for US citizens pretty clearly.

TLDR version, for US citizens, if you invest in stocks with a NISA, you'll wind up in compliance hell with the IRS. You'll spend too much time and money trying to comply.

To avoid the hassle, you could alternatively keep everything in a NISA savings account. But then you wouldn't be getting the full benefits that NISA theoretically provides.

Yes and no.

The highest marginal rate for US tax payers is 39.4%. The highest rate for Japan is much higher. There isn’t a one size fits all answer but at a higher income level, you’ll see benefits on the gap vs Japan taxes.

On the flip side for lower income levels, the earned foreign income exclusion is now at 102K USD. If you make below that, you’re really not paying US taxes so once again a NISA can pay off if managed smartly.

If you are an American and not in an IRA and you have the cash, that’s stupider than not being in a NISA though.

My two cents and this is sorta complex.......
 
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Yes and no.

The highest marginal rate for US tax payers is 39.4%. The highest rate for Japan is much higher. There isn’t a one size fits all answer but at a higher income level, you’ll see benefits on the gap vs Japan taxes.

On the flip side for lower income levels, the earned foreign income exclusion is now at 102K USD. If you make below that, you’re really not paying US taxes so once again a NISA can pay off if managed smartly.

If you are an American and not in an IRA and you have the cash, that’s stupider than not being in a NISA though.

My two cents and this is sorta complex.......

What about the compliance issues? When I was looking at NISA, I thought I saw it mentioned that it would require about 100-200 hours to prepare all the forms necessary to show compliance that the NISA account was not some attempt to hide income from the IRS. I can't afford to pay that. It seemed that the cost to comply far outweighs the benefits I would realize.
 
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Well, this is probably possible to do but maybe not the best idea...so my friend and I have created a company where we make not only apps but provide various services and it is a legit company licensed in the US...so my question is even though the company is online...could I list my parents or business partner's US address (he works and lives in CA) as my business address which US broker accounts often(or always?) ask for?

If this is possible, I could just open up a US broker account.
 
Sure. Use your parents address. I do.

You will likely need to provide proof of residence there depending on the broker - drivers license, utility bills etc.

Ask Vanguard as you indicated in the first post. I think objectively they are perhaps the least evil investment manager on the planet. (Full disclosure: I’m a long term customer and they are also a client).
 
Yes and no.

The highest marginal rate for US tax payers is 39.4%. The highest rate for Japan is much higher. There isn’t a one size fits all answer but at a higher income level, you’ll see benefits on the gap vs Japan taxes.

On the flip side for lower income levels, the earned foreign income exclusion is now at 102K USD. If you make below that, you’re really not paying US taxes so once again a NISA can pay off if managed smartly.

If you are an American and not in an IRA and you have the cash, that’s stupider than not being in a NISA though.

My two cents and this is sorta complex.......
It’s barely worth the bother regardless of how much or little you make. It’s a tax break on 1.2 million yen/year, I think up to 6 million???, which means you don’t pay capital gains taxes (about 21percent max), or income tax (marginal at 40% max) of your profits from a max of 6 million yen. So even if you are Warren Buffett and make 15% on your 6 mil, that is 90man taxed at 40%, which is 36man savings. Most likely to be much much less. For a bored housewife in a struggling middle class family, this might be big news. For a TAG gaijin, it’s a lot of time filling out tedious paperwork every year that would be much better spent at the bar.
 
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For a TAG gaijin, it’s a lot of time filling out tedious paperwork every year that would be much better spent at the bar.

It depends, maybe for anyone in here it would be wise to spend more hours doing boring paper work instead of blowing money in booze, cigarettes and women? The combined saving from having less time for those could be way more than the tax breaks you get from NISA.
 
Sure. Use your parents address. I do.

You will likely need to provide proof of residence there depending on the broker - drivers license, utility bills etc.

Ask Vanguard as you indicated in the first post. I think objectively they are perhaps the least evil investment manager on the planet. (Full disclosure: I’m a long term customer and they are also a client).

Yes, I did some research on Vanguard and they seem the least evil haha.

Did you open your Vanguard account before you left the US or while you were living here in Japan?

I assume some brokers will ask for more verification than others even if they are supposed to follow a certain protocol?
 
As far as being an individual investor in Japan goes, I suggest you take a look at Retire Japan. There are bunch of gaijins on the bbs who have loads of experience with getting into stocks and other investments from Japan. Most of them are teachers and are here for the duration
That's an interesting contrast to this site. According to the various salary advice threads everyone here is earning 15M yens/yr and you're a loser/lazy if you don't.
 
@Goiter Oh no, don't leave me hanging man. I'm serious about trying to apply. I know it can supposedly be done all online, but did you apply in the US and meet with a representative in person or apply for it online from here in Japan?
 
I’ve had my US accounts for 20+ years. I either applied/opened online or through mail. I opened them all while living here.
 
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I’ve had my US accounts for 20+ years. I either applied/opened online or through mail. I opened them all while living here.

Oh that is great! I was hoping that would be the situation. So, it is possible for me to apply for one while living here. So aside from not needing to meet you face to face, they also never required you to talk with them over the phone either?

Besides using your parents' home address, were there any other hoops you had to jump through such as providing a US work address, etc?

Although I do have a US bank account, there is less than a grand in there (required to open the account). I have a lot more than that saved in my Japanese bank account, but I guess I have no choice but to use Western Union to send the money to my mother or father and have one of them deposit the money into my US account and connect it to the Vanguard account lol.
 
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