NISA in Japan: A General Guide for Foreign Residents

Work in Japan long enough and the acronym finds you: on the bank-lobby poster, in every brokerage app's sign-up screen, in a coworker's aside about "starting their NISA." For a foreign resident, the pitch is rarely the interesting part. Two quieter questions are: can I actually use this as a non-Japanese, and is there a catch if I still owe tax back home? This guide covers what NISA is, how the 2024 version is structured, and how those two questions tend to resolve. It stops short of saying what to buy, because that decision is yours alone (and, where relevant, a licensed professional's).

What NISA actually is: a tax shelter, not an investment

NISA (Nippon Individual Savings Account, 少額投資非課税制度) is not a thing you buy. It is a wrapper the government puts around ordinary investing to switch off one specific tax. Normally, when you sell an investment in Japan at a profit, or receive a dividend, that gain is taxed at roughly 20% (the figure commonly quoted is 20.315%; confirm the current rate with the National Tax Agency). Hold those same investments inside a NISA account instead, and that tax does not apply to the gains.

So NISA is best understood as a container. You still choose what goes inside it, you still carry the ordinary risk that investments can lose value, and NISA changes none of that. What it changes is only the tax treatment of whatever growth happens. This guide deals with the container. It does not recommend anything to put in it.

The 2024 "new NISA": two quotas and one lifetime cap

NISA was overhauled at the start of 2024, and the current system is often called the "new NISA." Three changes matter most. The system was made permanent, the tax-free holding period became unlimited (older NISA versions expired your tax-free treatment after a set number of years), and the amounts you can shelter went up. A single NISA account now holds two separate investment quotas:

• The tsumitate (つみたて, "accumulation") quota lets you invest up to ¥1.2 million per year. It is built for steady, regular contributions into a limited menu of longer-term products that meet criteria set by the regulator.
• The growth (成長投資枠, seicho toshi-waku) quota lets you invest up to ¥2.4 million per year across a wider range of eligible products.

You can use one quota or both in the same year, up to a combined ¥3.6 million annually. Sitting above the annual figures is a lifetime ceiling: the total amount you can hold tax-free across both quotas is ¥18 million, of which the growth quota can account for at most ¥12 million. One useful detail is that this lifetime cap is measured by what you paid in, and it frees up again if you sell. If you sell holdings, the room they occupied becomes available to reuse in a later year, so the ¥18 million is not a once-and-gone allowance.

Opening an account: the general shape of it

You open a NISA through a financial institution that offers it, most commonly a securities brokerage, and in some cases a bank. This guide does not compare or rank providers; which one suits you depends on factors like fees, the product range, and whether the institution offers service in a language you read comfortably, all of which you can check on each provider's own official site. A few structural rules apply to everyone regardless of where they open:

• One NISA account at a time. You may hold a NISA at only one institution in a given year. Opening a NISA at a second provider means moving, not adding. This is why the choice of provider is worth a little thought up front.
• Identity and residence documents. Opening an account generally involves your residence card and your My Number, the same identifiers Japanese institutions ask for across the board. If you have not sorted your My Number yet, that is a prerequisite worth handling first.
• A tax-account setup step. The application flow usually asks how you want your (ordinary, non-NISA) investment income handled for tax, which is a standard question the provider walks you through. It is administrative, not a decision about NISA itself.

The residency question: can a foreign resident use NISA?

Here is the reassuring part. NISA eligibility is written around residence, not nationality. The rule set by the Financial Services Agency is that anyone living in Japan who is 18 or older (measured as of January 1 of the year) can open one. A foreign national who is a resident of Japan is, on that basis, generally eligible. Your specific visa or status of residence is not itself the gatekeeper the way it can be for, say, a long-term loan.

The flip side of a residence-based rule is what happens when you stop being a resident. Because NISA is built for people living in Japan, leaving the country and becoming a non-resident affects the account. In broad terms, once you are no longer a Japanese resident you can no longer make new NISA investments, and what happens to holdings you already have depends on your provider's rules. Some institutions let departing customers keep existing holdings under a specific "leaving Japan" procedure with conditions attached; others require you to sell before you go. There is no single universal answer here, so if a move abroad is on your horizon, ask your specific institution how they handle it well before you leave, rather than after. It tends to land in the same busy stretch as closing out your pension, taxes, and address registration.

If you are a US taxpayer: the PFIC snag

One group needs to slow down before opening anything, and that is US citizens and green-card holders, who generally remain subject to US tax on their worldwide income no matter where they live. Two problems stack up for them. First, the United States does not recognize NISA's tax-free status, so gains Japan treats as untaxed can still be taxable back to the US. That alone cancels much of the appeal.

Second, and more technical, is the PFIC issue. Many pooled investment products domiciled in Japan (the kind of funds commonly held inside a NISA) can fall under the US tax category known as a Passive Foreign Investment Company. US tax rules treat PFICs harshly and typically require a separate annual filing (Form 8621), with reporting and calculations that are genuinely painful to do correctly. This is a well-worn topic in the long-term US-expat-in-Japan community, and the details depend entirely on your own situation and the specific products involved.

Nothing above is US tax advice, and this guide cannot tell you how the rules apply to you. If you are a US taxpayer, treat NISA as a "check with a professional first" decision and speak with a cross-border tax specialist (for example a US-qualified accountant or attorney who handles Japan-US matters) before opening or funding an account.

Before you fund anything, know your baseline

NISA sits on top of the rest of your financial picture in Japan, and it makes more sense once that picture is clear. It helps to know what your actual take-home pay is after deductions before you decide how much you could set aside, and to have a handle on the taxes already coming out of your salary. Those two pieces are worth reading first if you have not already:

• How to read a Japanese payslip — where your take-home number actually comes from, which is the money any NISA contribution has to come out of.
• Japan's residence tax — another tax that runs on its own delayed schedule, and a useful companion for understanding how investment income is taxed outside a NISA.

Sources

Institutional facts about NISA (annual quotas, lifetime cap, 2024 reform, the 18+ residency requirement) confirmed against the primary sources below, checked on 2026-07-16. The ordinary tax rate on investment income (commonly cited as 20.315%) is set by national tax law and stated here only in approximate terms; confirm the current rate with the National Tax Agency. The US PFIC and worldwide-taxation points are general descriptions of US tax concepts, not sourced Japanese-law facts, and require a US tax professional for anything specific.

• Financial Services Agency (金融庁) — NISA overview page (new NISA): fsa.go.jp/policy/nisa2/about/index.html — tsumitate quota ¥1.2M/year, growth quota ¥2.4M/year (¥3.6M combined), lifetime tax-free limit ¥18M with a ¥12M growth-quota sub-cap, tax-free holding period now unlimited, and the eligibility rule that account holders must live in Japan and be 18 or older as of January 1. Japanese language. Checked on 2026-07-16.
• Japan Securities Dealers Association (JSDA), English site — 2024 NISA explainer: jsda.or.jp/en/activities/research-studies/html/2024nisa.html — English-language corroboration that the 2024 reform made the system permanent, made the tax-free holding period indefinite, and raised the annual investment limit and the tax-free holding limit. Checked on 2026-07-16.