JAPANESE TAX FREE PROGRAM FOR INVESTMENT - NISA

Now is the best timing to invest your money for the future in Japan. Japanese government launches the new tax free program for investors in Japan, which is called "NISA". If you watch video, you can learn how to apply for this brilliant program with tax-free.

1. What is NISA(Nippon Individual Savings Account)?

NISA is a tax-free program for investing. There are 2 types, NISA and Tsumitate NISA(accumulative NISA). This video explains the differences between normal and Tsumitate Nisa and how to apply for that.

2. Investment tax and NISA

Normally speaking, if you invest your money in Japan, income & capital gain like dividend are charged by investment tax. The tax rate is 20.135%. However, if you use the NISA program, you don’t have to pay the tax for such gain.

3.Two types of programs ; NISA & Tsumitate NISA

Main difference is ①tax-free period, ②the maximum amount for annual investment, and ③the purchasable financial products.

Tax-free period

5 years (NISA) 20 years (Tsumitate NISA)

The maximum annual amount

1.2 million JPY (NISA) 0.4 million JPY (Tsumitate NISA)

The financial product

Individual company stock, mutual fund (NISA) Mutual fund (Tsumitate NISA)

So if you have lots of money, we will recommend you to use NISA. And if you don’t have a money but work in Japan, it might be better to choose Tsumitate NISA.

4. How to use this program?

1. You have to open internet net banking by submitting your my number & residence cards.

-SBI securities: https://www.sbisec.co.jp/ETGate

-Rakuten securities: https://www.rakuten-sec.co.jp/

2. You can open a NISA or Tsumitate NISA account.

3. Purchase funds or stocks up to the annual maximum amount.

5. What kind of funds can you choose to buy in the NISA program?

Reference site https://kinkajuu-is-learning.com/best-12-funds-which-you-must-choose-for-tsumitate-nisa-rakuten-securities/

You can choose 300 different funds to invest inside the NISA program but you should take care of the commission fee for the funds manager even if tax is free. Thus, we introduce good funds for the NISA program as follows;

[World Stock funds]

SBI All Country Stock Index Fund (a.k.a. Yukidaruma (All country))

[American Stock funds]

eMAXIS Slim American Stock (S&P500)

[Developing country stock funds]

SBI Developing Country Stock Index Fund (no buying fee/ no cashing fee)

Nissei Foreign Country Stock Index Fund Balanced Funds

Nissei All Country Fund (GDP type Basket)

※But the important thing is to divide your assets into different funds for risk hedging and choose your favorite one on the basis of the funds portfolio.