Tax-Free Investing in Japan – Your Ultimate Wealth Building Tool
NISA for Foreigners in Japan: Can You Use It?
Yes — foreigners can use NISA. Eligibility is by residency, not nationality. If you are a Japan tax resident with a residence card and My Number, aged 18+, you can open a NISA and invest tax-free, just like Japanese residents. The two largest online brokers are Rakuten Securities and SBI Securities (SBI takes applications from foreign nationals by mail only).
The big catch: NISA is tied to your Japan residency — if you leave Japan you generally must close it. See the foreigners section below.
¥3.6M Annual Limit • Tsumitate + Growth Quotas Explained【Latest】
🌏 This Article is For
- Expats in Japan looking to start investing tax-efficiently
- Beginners who want to understand how New NISA works
- Anyone interested in building wealth while living in Japan
💡 All you need is a residence card and Japanese bank account to get started!
⭐ For foreigners in Japan: what you need to know
Can foreigners use NISA?
Yes — eligibility is by residency, not nationality. The Financial Services Agency says anyone living in Japan aged 18 or over (as of January 1 of the year) can open one; you’ll need a residence card (Japanese address) and a My Number. “Living in Japan” means being a resident for income tax: your home (the center of your life) is in Japan, or you have lived here for a year or more. If you came to Japan for a job that normally requires living here for a year or more, you’re presumed to have your home here from the time you start living in Japan. There is no 183-day or January 1 test for this, and the six-month rule banks apply comes from a different law (the Foreign Exchange Act). Tourists and short-term visitors are not eligible.
Sources: Financial Services Agency: NISA · National Tax Agency: residents and non-residents · presumption of home (Japanese)
Which broker should a foreigner use?
Rakuten Securities and SBI Securities are Japan’s two largest online brokers, and you can open the NISA account together with a regular securities account at either. The paperwork for foreign nationals differs: SBI Securities accepts applications from foreign nationals by mail only (your residence card needs at least 2 months left), while Rakuten Securities asks for both sides of your residence card with at least 3 months left until it expires. Both need your My Number. Sources: SBI Securities FAQ · Rakuten Securities: ID documents (Japanese)
Leaving for good (or for any reason other than a job transfer): submit a Notification of Departure (出国届出書) to your broker by the day before you leave. Your NISA account is closed and the holdings move to a regular taxable account — you don’t have to sell them. Gains made inside NISA up to that point stay tax-free; later dividends and gains are taxed, and you can’t contribute from abroad.
Temporary move on a job transfer: if your employer transfers you abroad (or you go with a transferred spouse), submit a Continued Application Notification (継続適用届出書) by the day before you leave. Holdings already in your NISA stay tax-free while you’re away, but you can’t buy anything new. Submit a Return Notification (帰国届出書) when you come back; if you haven’t by December 31 of the year five years after filing, the account is closed. Not every broker handles this form, so check with yours before you go.
Plan your exit before you leave. Note: iDeCo works differently. After you leave, your iDeCo assets can generally stay invested as an “investment instructor” (運用指図者) without new contributions. Contributing from abroad is only possible for Japanese nationals who voluntarily join the National Pension, and some people who leave Japan can take a lump-sum withdrawal (脱退一時金) if they meet the conditions.
Sources: FSA: NISA FAQ · JSDA: NISA Q&A (Q75–Q79) · Japan Pension Service: voluntary enrollment · iDeCo: 2022 changes (Japanese)
NISA’s tax-free benefit does not help you much: the US still taxes your gains and dividends, and most Japanese mutual funds are classed as PFICs, which creates serious US tax-reporting complications. Consult a US-Japan tax professional before investing.
The rest of this guide explains how New NISA works, the quotas, products and strategy — all of which apply to you the same as to Japanese residents.
Complete Guide to New NISA Starting 2024: Tax-Free Investment in Japan
“I want to start investing, but don’t know where to begin…” “I keep hearing about New NISA, but what exactly is it?”
Many people living in Japan have these questions. The New NISA (Nippon Individual Savings Account) that started in January 2024 is a powerful tool for wealth building for both beginners and experienced investors.
This article provides a comprehensive explanation of the New NISA system, practical usage tips, and my personal investment strategy.
1. What is New NISA? System Overview
NISA stands for “Nippon Individual Savings Account,” modeled after the UK’s ISA (Individual Savings Account). It’s Japan’s tax-exempt small investment system.
Normally, when investing in stocks or investment trusts, you pay approximately 20.315% tax on capital gains and dividends. However, profits from investments made through a NISA account are completely tax-free.
If you invest ¥1,000,000 and gain ¥500,000 profit:
・Regular account: ~¥100,000 tax → Take home ~¥400,000
・NISA account: ¥0 tax → Take home ¥500,000
Difference: Save about ¥100,000!
▲ New NISA System Image
New NISA Basic Information
| Item | Details |
|---|---|
| Start Date | January 2024~ |
| Annual Investment Limit | ¥3.6 million (Tsumitate ¥1.2M + Growth ¥2.4M) |
| Lifetime Tax-Free Limit | ¥18 million (Growth quota max ¥12M) |
| Tax-Free Period | Unlimited |
| Account Opening Period | Permanent (can open anytime) |
| Age Requirement | 18+ years old (as of January 1) |
| Account Limit | 1 account per person |
| Quota Reuse | Sold portion can be reused from next year |
2. Differences from Old NISA
The 2024 reform significantly upgraded NISA. Let’s look at the main changes.
▲ Comparing New NISA and Old NISA
| Item | Old NISA (~2023) | New NISA (2024~) |
|---|---|---|
| Quota Usage | Choose either Tsumitate or General | Can use both |
| Annual Limit | Tsumitate ¥400K / General ¥1.2M | ¥3.6 million |
| Lifetime Limit | Tsumitate ¥8M / General ¥6M | ¥18 million |
| Tax-Free Period | Tsumitate 20 years / General 5 years | Unlimited |
| Opening Period | Until 2023 | Permanent |
| Quota Reuse | Not possible | Possible |
New NISA allows simultaneous use of both “Tsumitate Quota” and “Growth Investment Quota”, enabling tax-free investment of up to ¥3.6 million annually. A massive expansion from the old system!
3. Tsumitate (Regular Investment) Quota Details
The Tsumitate quota is designed for long-term, regular, diversified investment in mutual funds and ETFs. It succeeds the old “Tsumitate NISA.”
- Annual Limit: ¥1.2 million (up to ¥100K/month)
- Investment Method: Regular investments only
- Eligible Products: Mutual funds/ETFs meeting FSA criteria
- Lifetime Limit: Within the ¥18M total quota
Popular Tsumitate Products
| Product Name | Tracking Index | Expense Ratio (incl. tax) |
|---|---|---|
| eMAXIS Slim US Stocks (S&P500) | S&P500 | 0.09372% |
| eMAXIS Slim All Country | MSCI ACWI | 0.05775% |
| SBI V S&P500 Index Fund | S&P500 | 0.0638% |
| Nissei NASDAQ100 Index Fund | NASDAQ100 | 0.2035% |
| Rakuten NASDAQ-100 Index Fund | NASDAQ100 | 0.198% |
4. Growth Investment Quota Details
The Growth Investment quota allows investment in a wider range of financial products. It succeeds the old “General NISA.”
- Annual Limit: ¥2.4 million
- Investment Method: Lump sum or regular investments
- Eligible Products: Listed stocks, mutual funds, ETFs, REITs, etc.
- Lifetime Limit: Up to ¥12M (part of ¥18M total)
Growth Quota Usage Examples
- High Dividend Stocks: Receive dividends tax-free
- Individual Stocks: Invest in growth companies
- US ETFs: Popular ETFs like VOO, QQQ, VYM
- REITs: Diversify with real estate investment trusts
5. Smart Ways to Use New NISA
Basic Strategy: Combining Both Quotas
New NISA allows simultaneous use of both quotas to maximize tax benefits. Here are some usage patterns.
Pattern 1: Steady Long-Term (Beginner-Friendly)
Monthly investments in index funds. Hassle-free wealth building.
Pattern 2: Balanced (Intermediate)
Growth: ¥1M/year (high dividend stocks or ETFs)
Regular investments as base, plus dividend income from Growth quota.
Pattern 3: Maximum Speed (Advanced)
Fill the quota in minimum 5 years to maximize compound interest.
6. My Investment Strategy Revealed
📌 My New NISA Investment Strategy
For reference, here’s how I personally utilize New NISA. Investment strategies vary by individual, so please use this as reference only.
Note:As of this writing (January 2026), my cumulative profit exceeds +¥2.44 million, with dividends received exceeding +¥240,000.
▲ My New NISA Performance (via Kaview App)
【Tsumitate Quota】¥100,000 Monthly Investment
| Investment Target | Allocation | Monthly Amount |
|---|---|---|
| eMAXIS Slim US Stocks (S&P500) | 50% | ¥50,000 |
| iFreeNEXT NASDAQ100 Index | 50% | ¥50,000 |
Why I chose these:
- S&P500 provides diversified exposure to 500 leading US companies with stable long-term returns
- NASDAQ100 focuses on tech companies – higher risk but higher growth potential
- 50/50 split balances stability with growth
【Growth Quota】High Dividend Stock Investment
For the Growth quota, I invest in Japanese high dividend stocks.
| Stock Name | Code | Features |
|---|---|---|
| Japan Tobacco (JT) | 2914 | High dividend leader, yield over 5% |
| Mitsubishi Corporation | 8058 | Top trading company, progressive dividends |
| Dai-ichi Life Holdings | 8750 | Major life insurer, stable dividends |
| Mitsubishi HC Capital | 8593 | 25+ consecutive years of dividend increases |
If you want to start with high-dividend stocks on a limited budget:
- SoftBank Corp (9434) – Only about ¥20,000 for 100 shares, with ~4% dividend yield. The 2024 stock split made it much more accessible. Hold for 1+ year to receive ¥1,000 PayPay Money Lite as shareholder benefit
- Nomura Holdings (8604) – Around ¥100,000 for 100 shares. Japan’s largest securities firm, a good entry point for financial sector stocks
Note: Actual investment amounts depend on current stock prices.
Why high dividend stocks:
- Dividends received tax-free, boosting compound effect
- Tsumitate covers index investing, so Growth takes a different approach
- Regular dividend income motivates continued investing
- Large-cap stable companies have relatively lower volatility
The screenshot above is from Kaview, a portfolio management app.
Kaview lets you manage multiple brokerage accounts in one place. You can view your New NISA performance by stock and by quota type – perfect for investment review!
- ✅ Manage multiple brokerage accounts together
- ✅ See profit/loss by individual stock at a glance
- ✅ Track dividend receipt history
- ✅ New NISA compatible (shows Tsumitate vs Growth)
Enter the code above when registering to get 1 month free premium features!
The above is my personal investment strategy and does not constitute investment advice. Please make investment decisions based on your own judgment.
7. Recommended Investment Products
For Tsumitate Quota: Index Funds
- eMAXIS Slim US Stocks (S&P500) – Largest domestic AUM, 0.09372% expense ratio
- SBI V S&P500 Index Fund – Tracks Vanguard ETF, 0.0638% expense ratio
- Nissei NASDAQ100 Index Fund – Low cost at 0.2035%
- Rakuten NASDAQ-100 Index Fund – Rakuten Securities exclusive, 0.198%
For Growth Quota: High Dividend Stocks & ETFs
- JT (2914) – Over 5% yield, high dividend leader
- Mitsubishi HC Capital (8593) – Expected 25 consecutive years of dividend increases
- SoftBank (9434) – Telecom giant, stable dividends
- VYM – Vanguard High Dividend Yield ETF, 0.06% expense ratio
- HDV – iShares Core High Dividend ETF
- SPYD – S&P 500 High Dividend ETF
8. Cautions and Risks
General Investment Cautions
- Not Principal Protected: Your invested funds may decrease
- Short-term Volatility: Markets may temporarily drop significantly
- Currency Risk: Foreign stocks/ETFs are affected by exchange rate fluctuations
New NISA-Specific Cautions
- Only 1 NISA account per person (can change institution once per year)
- No loss offset (NISA losses cannot offset gains in other accounts)
- Cannot roll over from old NISA to new NISA
- Must set “proportional distribution method” to receive dividends tax-free
9. FAQ
10. Summary
New NISA starting in 2024 is a massively improved tax-free investment powerhouse.
- Up to ¥3.6 million tax-free investment annually
- Lifetime ¥18 million tax-free quota
- Unlimited tax-free holding period
- Can use both Tsumitate and Growth quotas simultaneously
- Sold portions can be reused from the following year
Personally, I invest 50/50 in S&P500 and NASDAQ100 for Tsumitate quota, and high dividend stocks for Growth quota.
The earlier you start investing, the more you benefit from compound interest. Why not start building wealth with New NISA, even from small amounts?
📚 Related Articles
System details and product information may change. Please make investment decisions on your own responsibility and consult financial institutions or professionals as needed. This article does not recommend purchasing specific financial products. Please understand that investments carry the risk of principal loss before making your own judgment.
Get new articles by email
We will email you when a new deals article goes up. You can choose the categories, too.