NISA allows foreign residents in Japan to invest tax-free — but most foreigners don’t know they qualify or how to actually open an account. The 2024 NISA reform made it significantly more powerful. Here’s a clear guide to using NISA as a foreigner.
What Is NISA?
NISA lets you invest in stocks and mutual funds without paying capital gains tax or dividend tax on profits within the account.
Normal investing in Japan: 20.315% tax on gains and dividends
NISA investing: 0% tax on gains and dividends
From 2024, Japan introduced the New NISA with significantly expanded limits:
| Feature | New NISA (2024+) |
|---|---|
| Annual investment limit | ¥3.6M/year (¥1.2M Tsumitate + ¥2.4M Growth) |
| Lifetime limit | ¥18M |
| Tax-free period | Indefinite (no time limit) |
| Types | Tsumitate (積立) + Growth (成長) |
Can Foreigners Use NISA?
Yes, if you are:
- A resident of Japan (hold a valid Residence Card)
- Age 18 or older
- Not a US citizen or permanent resident (US persons face FATCA complications — most brokers reject them for NISA)
If you’re American: Unfortunately, the US-Japan tax treaty and FATCA rules make NISA impractical for US citizens in Japan. Consult a cross-border tax advisor.
How to Open a NISA Account
Step 1 — Choose a Broker
| Broker | Recommended For | English Support |
|---|---|---|
| SBI Securities (SBI証券) | Best overall, widest fund selection | Limited English |
| Rakuten Securities (楽天証券) | Easy app, Rakuten ecosystem | Partial English |
| Matsui Securities (松井証券) | Beginners, no account fees | Japanese only |
| auカブコム証券 | au/KDDI users | Japanese only |
SBI Securities and Rakuten Securities are the most popular choices for foreigners because they have more English-language information available online.
Step 2 — Apply Online
Most brokers allow online application:
- Visit broker website
- Fill out application form (Japanese, but manageable with Google Translate)
- Submit copies of: Residence card, My Number card/notification slip
- Wait 1–2 weeks for account approval by mail
- Log in and set up your NISA account
Step 3 — Link a Bank Account
Connect your Japanese bank account for deposits. Rakuten Securities pairs naturally with Rakuten Bank.
Step 4 — Choose Your Investments
What Should Foreigners Invest In?
For most beginners, index funds are the right starting point.
Top Recommended Funds for NISA
| Fund | Type | Expense Ratio |
|---|---|---|
| eMAXIS Slim 全世界株式（オール・カントリー） | Global stocks | 0.05775% |
| eMAXIS Slim 米国株式（S&P500） | US S&P500 | 0.09372% |
| ニッセイ外国株式インデックスファンド | Developed market stocks | 0.09889% |
The eMAXIS Slim All Country fund is the most popular choice — it gives you instant diversification across the entire global stock market at an extremely low cost.
Tsumitate vs Growth NISA
Tsumitate (積立) NISA
- Monthly automatic purchases
- Only qualified mutual funds (screened for long-term investment)
- Limit: ¥1.2M/year
- Best for: Beginners, hands-off investors
Growth (成長) NISA
- Can buy stocks, ETFs, REITs, investment trusts
- Limit: ¥2.4M/year
- Best for: More active investors who want individual stock picks
You can use both simultaneously (total ¥3.6M/year).
Tax Considerations for Foreign Residents
- Japan-source dividends and gains: NISA eliminates Japanese tax completely
- Home country taxes: Depending on your country, your home country may tax gains even if Japan doesn’t. Check with your home country’s tax authority.
- Withholding tax on US stocks: Even inside NISA, US dividends are subject to 10% US withholding tax (unavoidable)
- When you leave Japan: You may need to close your NISA account or transfer to a taxable account — rules vary
Monthly Investment Strategy
A simple approach for beginners:
- Open Rakuten Securities + Rakuten Bank
- Set up automatic monthly purchase of ¥50,000 in eMAXIS Slim All Country
- Increase when possible, never panic sell
- Reinvest dividends automatically
Over 10–20 years, consistent investing in diversified global funds has historically generated 7–10% annual returns.
Resources to Learn More
- Tsumiki Financial (Japanese) — Beginner-friendly Japanese investing blog
- Money Forward ME — Track all your Japanese accounts and investments in one place
- r/japanfinance (Reddit) — Excellent English community for financial questions in Japan