Can Foreigners Use the New NISA? A Simple Guide to Japan’s Investment Tax-Free System

 


Introduction

If you live in Japan and are interested in investing, you’ve probably heard of NISA — a tax-free investment account. In 2024, Japan launched a new version of NISA with improved benefits.

But many foreign residents wonder:
“Can I use it?” and “How does it work?”

This article explains the new NISA system in simple English and answers key questions for foreigners living in Japan.

✅ What Is NISA?

NISA (Nippon Individual Savings Account) is a Japanese government program that allows individuals to invest without paying taxes on profits.

It’s similar to a Roth IRA or ISA in other countries. The goal is to help people grow their money through long-term investing.

🌟 What’s New in the 2024 NISA?

In January 2024, Japan reformed the NISA system. Here are the main changes:

FeatureBefore 2024After 2024 (New NISA)
Tax-free period5–20 yearsUnlimited (no time limit!)
Investment limit¥1.2–¥1.8 million/year¥3.6 million/year
Lifetime limitNone¥18 million total
Account typesTwo types (Tsumitate & General)Integrated into one account

🆕 Key benefit: You can now hold investments tax-free for life, as long as it stays within the NISA limit.

🧑‍🦱 Can Foreigners Use NISA?

✅ Yes, foreigners can open and use a NISA account, as long as you:

  • Have a valid My Number

  • Have a residence in Japan

  • Are over 18 years old

You also need to apply through a registered securities company or bank.

⚠️ However, if you leave Japan permanently, your NISA account will be closed and your tax benefits will end.

💸 What Can You Invest In?

Under the new NISA, you can invest in:

  • Japanese and international stock mutual funds

  • ETFs (exchange-traded funds)

  • Japanese stocks

  • Some REITs (real estate investment trusts)

Certain high-risk or complex products are not allowed under NISA.

🧾 Example: How NISA Saves You Taxes

Let’s say you invest ¥1 million and earn ¥200,000 in profit.

  • 🔸 Without NISA: You pay 20.315% tax → ¥40,630 tax

  • 🔸 With NISA: You pay 0 yen in tax → Save ¥40,630!

That’s the power of NISA.

🏦 How to Open a NISA Account

  1. Choose a bank or online broker (e.g., Rakuten Securities, SBI, Monex)

  2. Provide your My Number and ID (Zairyu card)

  3. Choose between Tsumitate (monthly plan) and Growth investment (stocks, ETFs) — or both

  4. Wait for approval and start investing tax-free!

📌 Pros and Cons for Foreign Residents

Pros:

  • No tax on capital gains and dividends

  • Easy to open if you have legal residence

  • Great for long-term savings while in Japan

Cons:

  • You lose tax benefits if you move abroad

  • Account must be managed in Japanese (most platforms)

  • Annual/lifetime limits apply

🧠 Final Thoughts

The new NISA system makes it easier than ever for residents — including foreigners — to invest in Japan without worrying about taxes.

If you plan to stay in Japan for a few years or longer, NISA is a great tool for building wealth. Just be sure to understand the rules and choose a trustworthy broker.

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