If you're working in Japan and interested in investing, you've probably heard of NISA. Whether you're a seasoned investor or just starting out, NISA can be a powerful tool to grow your money β tax-free. Here's what you need to know about the newly revamped system as of 2024.
What is NISA?
NISA (short for Nippon Individual Savings Account) is a Japanese government-sponsored program that offers tax exemptions on investment income.
In short: you don't pay any tax on capital gains, dividends, or distributions from investments held in a NISA account.
Key Features of the New NISA (from 2024)
Since January 2024, the NISA system has been fully revamped with improved flexibility and benefits:
| Feature | Details |
|---|---|
| Tax-Free Coverage | Capital gains, dividends, and fund distributions |
| Annual Investment Limit | Up to Β₯3.6 million per year |
| Lifetime Investment Limit | Up to Β₯18 million total |
| Tax-Free Duration | Unlimited (used to be limited to 5β20 years) |
| Reusability | Selling assets restores your investment quota |
| Eligibility | Anyone aged 18 and over (regardless of nationality or visa status) |
Two Types of Investment Buckets
NISA now includes two separate investment allowances β both of which you can use simultaneously:
| Type | Description | Eligible Assets |
|---|---|---|
| Tsumitate (η©η«ζθ³ζ ) | Automated monthly contributions (up to Β₯1.2M/year) | Government-approved low-risk mutual funds |
| Growth Investment (ζι·ζθ³ζ ) | Flexible lump-sum investing (up to Β₯2.4M/year) | Stocks, ETFs, REITs, active funds, etc. |
Together, these total Β₯3.6 million per year in tax-free investing.
How Much Tax Can You Save?
In Japan, capital gains and dividend income are usually taxed at 20.315%.
Example:
- If you make Β₯1 million in profits from a regular brokerage account β you'll pay approx. Β₯203,000 in taxes
- With a NISA account β you keep the full Β₯1 million
That's real money saved β especially as your investments grow over time.
How to Open a NISA Account
- Apply through a securities company or bank (e.g., SBI Securities, Rakuten Securities, Nomura)
- You'll need to provide your MyNumber and basic ID documents
- You can only have one NISA account across all institutions at any time
Final Thoughts
If you're investing in Japan, there's no reason not to use NISA β the tax advantages are too good to pass up.
Just remember: investing involves risks, and you could still lose money depending on market conditions.
Whether you're buying ETFs, mutual funds, or individual Japanese stocks β NISA gives you a clear tax edge.