What you need
Japanese brokers need to confirm who you are, where you live and your My Number. Foreign residents usually need a residence card with your address, your My Number and a Japanese bank account to move money in and out. Most brokers open accounts online, then send a confirmation by post to your registered address.
Not every broker accepts every resident. Some require a longer remaining period of stay, and some do not accept US citizens because of US tax rules. Ask before you apply.
The tokutei account
When you open an account, you choose its tax type. In a tokutei kōza with withholding, the broker works out your gains and dividends for the year and takes the tax at source, so you normally do not have to file a tax return for it. The rate is 20.315%: 15.315% national tax and 5% local tax.
In a general account, or a tokutei account without withholding, you work out the tax and file a return yourself. If you have losses, filing a return lets you carry them forward for three years.
Choosing a broker
Online brokers are popular for low fees, and several charge no commission on online trades of Japanese shares under certain conditions. Compare commissions, the range of funds, the foreign share offering, loyalty points, and how much of the service works in English. English support varies a lot, so check the website, the app and customer service before you commit.
Make sure the broker is registered with the Financial Services Agency (FSA). The FSA publishes a list of registered financial firms on its website.
If you leave Japan
Tell your broker when you move abroad. A NISA account, in particular, is only for residents of Japan, and brokers have strict procedures for people who leave. Rules on what you can keep and whether you can keep buying depend on the account and your new country, so ask before your departure date.
Points to remember
- Choose a tokutei account with withholding unless you have a reason to file yourself. It saves paperwork.
- Keep your residence card, My Number and bank details up to date with the broker. Moving house needs a change of address notice.
- Beware of cold calls and social media messages promising returns. Brokers do not contact new customers that way.
- Opening an account is free. Do not pay anyone to open it for you.
Words you will see
- 証券口座 shōken kōza
- brokerage account
- 特定口座（源泉徴収あり） tokutei kōza (gensen chōshū ari)
- withholding account
- 一般口座 ippan kōza
- general account
- 確定申告 kakutei shinkoku
- annual tax return
- 損失の繰越控除 sonshitsu no kurikoshi kōjo
- carrying losses forward
- 金融庁 Kinyūchō
- Financial Services Agency
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Further reading
Books to read next
General books on investing and on the Japanese market. They are reading suggestions, not investment advice, and we do not endorse any investment.
- Kakeibo: The Japanese Art of Saving Money A guide to the Japanese household account book and mindful spending. See on Amazon ↗
- The Little Book of Common Sense Investing John C. Bogle The case for low-cost index funds, by the founder of Vanguard. See on Amazon ↗
- The Psychology of Money Morgan Housel Short stories on how behaviour, more than knowledge, shapes money decisions. See on Amazon ↗
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Sources: Financial Services Agency; National Tax Agency of Japan. Broker requirements differ.