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Wealth

Wealth — 4.3

Investment Infrastructure

Brokerage access, currency risk management, and asset structuring for Japan-based operators. The system is functional — once you understand it.

20.315%

Capital gains tax (Japan)

¥2,400,000

NISA annual limit (Growth)

Most major markets

Foreign stock access

Significant

USD/JPY volatility (5yr)

Brokerage Options

BrokerBest forForeign stocksNotes
SBI Securities (SBI証券)Primary brokerage, wide accessUS, Europe, AsiaLargest retail broker in Japan. Links to SBI Sumishin Bank for interest optimization. Solid platform.
Rakuten Securities (楽天証券)Rakuten ecosystem usersUS, China, ASEANGood interface, links to Rakuten Bank. Strong for beginners.
Monex Securities (マネックス)US market depth, analysis toolsUS (deepest)Best US stock access, excellent research. TradeStation integration.
SMBC NikkoPremium, full-serviceWideFull-service investment management. Relationship-driven.
Interactive Brokers JapanInternational investors, optionsGlobalBest for sophisticated investors already using IB globally. Multi-currency.
Saxo Bank JapanFX, CFDs, internationalWideGood for currency traders.

Recommended setup

SBI Securities as primary brokerage for tax efficiency (links to NISA accounts), Monex if you are primarily a US equity investor, Interactive Brokers if you have existing international positions to manage.

NISA — The Tax Wrapper

NISA (Nippon Individual Savings Account) is Japan's tax-advantaged investment wrapper. Gains and dividends within NISA are tax-free. The 2024 reform made this significantly more powerful.

Members only

The strategy, sequencing, and optimization details below are available to members.

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NISA — The Tax Wrapper

NISA (Nippon Individual Savings Account) is Japan's tax-advantaged investment wrapper. Gains and dividends within NISA are tax-free. The 2024 reform made this significantly more powerful.

  • Growth NISA (成長投資枠): ¥2,400,000/year contribution limit. Invest in stocks, ETFs, investment trusts. Tax-free indefinitely.
  • Tsumitate NISA (つみたて投資枠): ¥1,200,000/year, restricted to approved accumulation-type investment trusts. For systematic long-term investing.
  • Total annual limit: ¥3,600,000 across both accounts. Lifetime total cap: ¥18,000,000.
  • Eligible: Japan residents with a valid My Number and Japanese address. Foreigners on long-term visas qualify.
  • Cannot hold: foreign-listed ETFs directly. Must use Japan-listed equivalents (e.g., 1655 for S&P 500 exposure).
  • Accounts are held at your brokerage — open NISA account at time of brokerage registration.

Currency Risk Management

If you earn in foreign currencies and hold assets or liabilities in yen, currency risk is constant. The JPY has shown significant volatility — the USD/JPY range over 2021–2024 alone exceeded 50 yen. This is not background noise; it is a material planning factor.

Exposure types

  • Income currency mismatch: earning USD/EUR, paying JPY rent and taxes. Yen appreciation hurts your purchasing power.
  • Asset currency risk: holding Japan real estate denominated in JPY while your investment portfolio is offshore in USD.
  • Corporate revenue risk: billing in JPY while paying overseas contractors in USD.
  • Mortgage currency mismatch: taking a JPY mortgage while your income is primarily foreign currency.

Management tools

  • Natural hedging: structure income and expenses in the same currency wherever possible
  • Sony Bank multi-currency account: hold USD/EUR and convert when rates are favorable
  • Forward contracts: available through major banks and Monex FX for business needs. Lock in rates for 30–360 days.
  • Dollar-cost averaging for currency conversion: convert a fixed yen amount per month from foreign income rather than converting in large batches
  • Do not speculate on the JPY — the carry trade dynamics that drive USD/JPY are driven by institutional capital flows you cannot time

Asset Structuring

How you hold assets matters — both for tax efficiency and for the cross-border complexity of eventually leaving Japan or passing assets to heirs.

Holding through a Japanese corporation

  • Real estate: purchased by your GK or KK can be depreciated against corporate income, reducing tax base
  • Investment securities: held corporately, gains taxed at corporate rate (~30–34%) vs personal rate (~20–55%). For high earners, corporate holding is often better.
  • Downsides: more complexity, cost of corporate accounting, exit requires selling either the assets or the company

Offshore structures

  • CFC (Controlled Foreign Corporation) rules: Japan taxes Japanese residents on income from offshore entities they control (over 50% ownership). Blanket offshore company structures do not work for Japan residents.
  • The 5-year NPR window: during this period, offshore income not remitted to Japan is not taxed. Structure what you own offshore before becoming a permanent tax resident.
  • Offshore investment accounts: legally held by Japan residents, but must be reported annually (国外財産調書) if total foreign assets exceed ¥50,000,000.
  • Get specific advice: offshore structuring for Japan residents is an area where generic international advice fails. Japan's tax treaties and CFC rules have specific carve-outs and traps.

Important

Japan introduced strict foreign asset reporting requirements. If you hold over ¥50,000,000 in offshore assets, annual reporting to the NTA is mandatory. Non-compliance penalties are significant. This is not a grey area.

Capital Gains Tax

Japan taxes capital gains on publicly listed securities at a flat 20.315% (15% national + 5% local + 0.315% reconstruction surtax). This applies within Japan brokerage accounts.

  • Tax-advantaged: gains within NISA are completely exempt from this rate
  • Loss carryforward: capital losses can be carried forward 3 years to offset future gains
  • Specific identification method: use this to optimize which lots you sell
  • Real estate capital gains: taxed separately at 20% (long-term, over 5 years) or 39% (short-term, under 5 years) for individuals
  • Business asset gains: taxed as ordinary corporate income within a corporation

Consulting

If your situation is complex or you want a second opinion on strategy, we can help directly.

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