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NISA and iDeCo as a foreign resident: the tax break, and the exit problem nobody mentions

How the two schemes work, what happens to each when you leave Japan, and why iDeCo can lock your money away until you are sixty even after you have gone.

Money 4 min read Last reviewed 21 August 2026

Japan offers two genuinely valuable tax-advantaged investment schemes, and both are open to foreign residents. The catch is that they were designed for people who stay, and the rules on leaving are where foreign residents get hurt.

NISA

A NISA account shelters investment gains and dividends from tax entirely. Outside it, investment income is taxed at roughly 20 per cent, so the saving is real.

  • Annual limit ¥3.6 million — up to ¥1.2 million in the accumulation frame and ¥2.4 million in the growth frame
  • Lifetime limit ¥18 million, measured at purchase cost
  • No time limit on holding, and no penalty for withdrawing
  • One NISA account per person, at one institution, changeable annually

Sell something and the lifetime allowance it used is restored — historically from the following year, with a 2026 revision moving that restoration into the same year. It is the ¥18 million lifetime figure that is restored, not the ¥3.6 million annual one.

Eligibility: you need a resident record and My Number. That means a residence card and a registered address, which in turn means this is not available on short stays.

iDeCo

iDeCo is a private defined-contribution pension. The tax treatment is better than NISA in one specific way: contributions are deductible from taxable income, so you save income tax and residence tax every year you pay in, on top of tax-free growth.

Contribution ceilings depend on what other pension arrangements you have. A reform raises them substantially from January 2027, with the combined ceiling moving to ¥62,000 a month for employees and higher for the self-employed, and the eligible age extending. If you are weighing iDeCo up, the numbers are about to improve.

The thing to understand before you open one: iDeCo money is locked until you are 60. Not discouraged from withdrawal — locked. Early withdrawal is possible only in narrowly defined circumstances, and leaving Japan is generally not one of them. Money you contribute at 32 may sit in a Japanese account you cannot touch for nearly three decades, wherever you live.

What happens when you leave Japan

This is the section most articles skip, and it is the one that matters most to you.

NISA, leaving permanently

File your move-out notification and you become a non-resident. You cannot hold a NISA as a non-resident: new investment stops, and the account is closed or your holdings moved to a taxable account, losing the shelter. Plan the exit deliberately rather than discovering it after you have gone.

NISA, leaving temporarily

An overseas posting is treated differently. Submit a continued-use notification (継続適用届出書) to your institution before you go, and the account can be preserved until 31 December of the fifth year after departure. You cannot make new investments in the meantime, but the shelter survives. Miss the filing and you lose the option.

iDeCo, leaving at all

You stop contributing, and the balance stays invested until you reach 60. The lump-sum withdrawal available to departing residents from the national pension has no general equivalent here. There are narrow exit provisions with strict conditions, and most people do not meet them.

This is not a reason never to use iDeCo. The annual tax deduction is worth a great deal to a high earner, and someone intending to stay long term should probably use it. It is a strong reason not to open one in your first year while your plans are still open.

If you are American

US citizens and green card holders are taxed on worldwide income regardless of residence, and the US does not recognise NISA's tax-free status. Worse, most Japanese mutual funds and ETFs are treated as PFICs under US tax law, which carries punitive treatment and heavy reporting. A NISA full of Japanese funds can create a US tax problem larger than the Japanese saving. Get advice from someone who handles both systems before opening one.

A sensible order

  1. Emergency savings in cash first. Neither scheme is a substitute.
  2. NISA before iDeCo if there is any chance you leave within a few years — it stays accessible.
  3. iDeCo once you are reasonably sure you are staying, and once you are earning enough for the deduction to bite.
  4. Before departure, deal with both deliberately: notification for NISA if the absence is temporary, a decision about the account if it is not.

The phrases

  • NISA口座を開設したいです。 — NISA kōza o kaisetsu shitai desu. — I would like to open a NISA account.
  • 海外転出後も継続できますか。 — Kaigai tenshutsu go mo keizoku dekimasu ka? — Can I continue this after moving abroad?
  • 継続適用届出書を提出したいです。 — Keizoku tekiyō todokedesho o teishutsu shitai desu. — I would like to submit the continued-use notification.

Where to confirm this

Guides are dated rather than undated: last reviewed 21 August 2026. This is an organisational aid, not legal or immigration advice — always confirm anything consequential with your ward office, the Immigration Services Agency, or a qualified professional.

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