What to do w/ yen savings while out of Japan for a few years

[iamneveralone]

Hello, first time poster here hoping to get some opinions/thoughts on what to do with money in Japan.

Context: American working for last 6 years at a foreign company in Japan and have PR. I'm being transferred to another country later this year, where I’ll likely be for 3-5 years. When I leave, my employment with my company’s Japan office will be severed and I’ll be rehired in the other country.

I plan to retain my PR as I like living in Japan, speak Japanese, and see myself back here in the future.

I have saved quite a bit of money in Japan — some of it in a NISA, some in a bank account. I moved some back to the U.S. and invested it when the exchange rate was better.

When I leave Japan I will have to pull the money out of my NISA (as I won’t be a tax resident) and realize I’ll be in possession of likely 8-9 million yen that I do not need to use anytime soon. (I’m in my mid-30s and single.)

I don’t want to transfer the yen back to the U.S. because I see it as more likely I’ll be back in Japan in the future rather than the U.S. The exchange rate is also horrible and I expect it won’t get much better this year.

The question: What kind of options do I have on keeping my money here in Japan that's not putting it in a bank account losing value while I'm out of the country? Is leaving my money in Japan even possible? (As I know banks are also getting stricter these days about foreigners keeping accounts open while away) Any thoughts are much appreciated.

I've had some friends suggest putting the money towards buying an apartment mansion in Tokyo and renting it out (and using that to pay off the mortgage) while I'm away. I’m not sure if that’s the kind of hassle I want to deal with or if it's even a good investment?? Also curious about this option.

TL;DR version: Japan PR seeking advice on what to do with a large amount of yen that I want to keep here while I’m out of the country for 3-5 years for work, but with intention to return in the future.

 

[rogueebear]

@iamneveralone Hopefully you’re not investing in any PFICs in your NISA?

But as for the broker, I believe you can keep it open for up to 5 years outside Japan. You just can no longer contribute etc, and any capital gains/dividends/interest maybe taxable in your new “temporary” host country, based on their tax laws/treaties etc

One additional thing to be aware of is I believe a NISA account is still included in one’s Exit’taxable assets. So if you have >¥100 million in exit’taxable assets and you’ve been on a table 2 visa for over 5 years (which include a PR visa and for example a spouse visa… if you were on a spouse visa before PR?) then you could find yourself liable for exit tax.

 

[iamneveralone]

@rogueebear Thanks for pointing those out, don’t think I’m worth enough for the exit tax fortunately!

 

[wmondilla]

@rogueebear Where can I find this info about keeping the securities account for 5 years if I'm outside Japan? That's what I'm planning to do if I hopefully get PR next year, max out 6mil in NISA over 5 years, leave Japan and then let it ride for another 5 until 10 years account expiration.

 

[rogueebear]

@wmondilla It was in a post a few months to a year ago with @sam68

I can’t remember the post, but maybe they can provide the source/information again?

However, IMO your plan sounds flawed… you’re a US tax payer. So the only real benefit one could really get from keeping their NISA open is if they are investing in Index funds on it…. Which, you as a US tax payer cannot really benefit from due to pretty much every index fund on a NISA providing Japanese broker is a PFIC.

If you’re investing in non-PFIC equity stocks on your NISA then you might as well realize them tax free before leaving Japan (would still need to declare to the US anyway as you’re a US tax payer) and then rebuy the stocks you wish to keep on a US broker, thus resetting your StockXYZ cost basis and utilizing what every tax free allowances Your new host country will have access too.

So personally, I think keeping a Japanese broker account open for up to 5 years, is only really something those investing in index funds on a Japanese broker, and wish to return to Japan in a few years should really worry about…

 

[wmondilla]

@rogueebear I'm not a US citizen though. Currently my NISA is all eSlim maxis all countries fund and I'm gonna stick to it.

 

[rogueebear]

@wmondilla Your OP states “American working for last 6 years at a foreigner company in Japan”….

 

[wmondilla]

@rogueebear I'm not OP.

Was searching this sub for relevant info and your post came up, thought I would ask. I'm a EU citizen.

 

[rogueebear]

@wmondilla Oh shit my bad

Then yea, your plan is robust. Hopefully, Stark can help with formation and links.

Again, sorry about that.

 

[resjudicata]

@iamneveralone When I asked rakuten they said that I can keep it in there as long as I have a valid visa. I just can't do any trades while out of the country, though I think I can withdraw cash (eg dividends).

 

[wmondilla]

@resjudicata So if you have PR, you can just let your NISA ride for the full 10 years duration, even if you're not living in Japan?

 

[kel_sulz235]

@iamneveralone Putting it into a rental piece of property can be a solid option. Income from Japanese properties is good - better than western countries typically. You might want to take a mortgage but might not, maybe just buy a place outright. Or, you could buy a place you'd want to live in later, which is super ideal.

Hiring a property manager is pretty good/cheap. Taxes aren't hard either, you just need to have a friend who can be your 納税管理人 who pays taxes for you (since the tax office doesn't send statements overseas - Japanese people who live abroad do the same thing).

Some caveats

Not good if you need to get the cash back out, so if you are coming back in 3 years and would need the cash then wouldn't be worth it.

Yes Japanese property would often depreciate, but you make up for that in high rate of return

There are some risks, when I did that I had the worst case scenario of a tenant dying and needing to fix everything up after that.

happy to DM.

 

[leehop71]

@iamneveralone Just curious why your company is not transferring you as expat? That is the normal modus operandi Japanese companies use for Japanese employees when transferring them overseas for 3-5 years.

 

[iamneveralone]

@leehop71 I don’t work for a Japanese company, so won’t get the same type of expat transfer that Japanese institutions are used to procedurally… :/

 

[rahel3]

@iamneveralone I would either put it into international stocks with an app like Revolut, or actually in your situation you might get away with putting a big chunk in crypto.

If you deposit your crypto in Japan and then move to another country, then withdraw it when your tax residency is no longer Japan, I believe it will only be taxable in the other country, which may be favourable depending on the amount and the country in question.

Crypto notoriously has potential for both jaw-dropping gains and devastating losses though, so invest at your own risk. I will mention that major cryptocurrencies have generally produced better annual returns than the stock market despite their volatility, however.

If you do decide to go this route though, especially with a large sum, I would recommend getting in touch with someone who knows what they're talking about regarding investing and tax.

 

[resjudicata]

@iamneveralone I would just invest it in Nikkei225 or S&P ETFs ?