What is the specific procedure for opening a NISA account?

Hi there! You want to know about NISA? You've come to the right place. It's actually much simpler than it seems. When I first opened my account, I spent ages researching it, so now I'll share my experience with you, guaranteed to make it easy to understand.

Simply put, NISA is a "tax-exemption benefit for investments" provided by the Japanese government. Normally, if you make a profit from investing in stocks or mutual funds, you'd pay about 20% tax. But if you invest that money through a NISA account, all your profits are completely tax-free. Sounds great, doesn't it?

Below, I'll walk you through the specific account opening process, step by step. It's very straightforward.

Step 1: Choose a Financial Institution (Brokerage/Bank)

This is the most crucial step! Because NISA accounts aren't opened with the government directly, but with major banks or securities firms. You can only open one NISA account with one institution per year, so choose wisely.

• Online Securities Firms (ネット証券):

  • Examples: SBI Securities (SBI証券), Rakuten Securities (楽天証券), Monex Securities (マネックス証券), etc.
  • Pros: 👍 Super wide selection of products! Stocks, mutual funds (投資信託), ETFs, everything. Fees are generally very low, or even free. All operations are done online or via app, which is extremely convenient.
  • Cons: No physical branches, so if you have questions, you'll need to look online or call.
  • Recommendation: Highly recommended for beginners! Especially Rakuten and SBI, they have the most users, so you can't go wrong following the crowd. If you already use Rakuten Bank/Credit Card or Sumitomo Mitsui Banking Corporation, choosing their corresponding brokerage might even give you points or other benefits.

• Traditional Banks (銀行):

  • Examples: Most banks where you have your salary account, such as Mitsubishi UFJ, Sumitomo Mitsui, Mizuho, etc.
  • Pros: Have physical branches, so you can consult staff face-to-face, which can feel reassuring.
  • Cons: 👎 Very limited investment product selection, usually only a few mutual funds they recommend, and fees are typically higher than online brokerages.
  • Recommendation: Consider this if you completely don't want to choose yourself and just want the bank to manage things for you. But for those who want to manage their own investments, it's highly not recommended.

Summary: Unless you have specific needs, just choose between Rakuten Securities or SBI Securities.

Step 2: Prepare Necessary Documents

Once you've chosen where to open your account, prepare the following. Nowadays, you can usually submit everything online by just taking photos with your phone.

1. My Number Card (マイナンバーカード):

   • Having this card is the most convenient; just take photos of both sides and upload.
   • If you don't have the card, you can use your "My Number Notification Card" or a "Juminhyo (Resident Record with My Number)" + another form of identification.

2. Identity Verification Document (本人確認書類):

   • Residence Card (在留カード) + Driver's License (運転免許証) is the most common combination.
   • You can also use a health insurance card (健康保険証), etc., depending on the specific requirements of your chosen financial institution.

3. A Japanese Bank Account: Used for transferring money for investments, and later for receiving dividends or proceeds from sales.

Step 3: Submit Your Application

• Online Application (Most Recommended):

  1. Go to the official website of your chosen securities firm and find the "NISA口座開設" (Open NISA Account) entry point.
  2. It will first guide you to open a regular "General Securities Account" (総合口座). If you already have one, you can skip this.
  3. Then apply for the NISA account, fill in your personal information, and choose the NISA type you want to open (General NISA or Tsumitate NISA).
     • つみたてNISA (Tsumitate NISA): Suitable for beginners who want to invest small amounts monthly and long-term in mutual funds. Annual limit is 400,000 JPY.
     • 一般NISA (General NISA): Suitable for those who want to buy stocks or invest a larger lump sum. Annual limit is 1,200,000 JPY.
     • Not sure which to choose? Start with つみたてNISA. It has a lower barrier to entry, diversifies risk, and is best for getting started.
  4. Follow the website's instructions to upload photos of the documents you prepared.
  5. Submit and wait for review.

• Mail or Counter Application:

  • If you choose a bank or prefer to apply by mail, you can request an application packet to be sent to your home from their website, fill it out, and mail it back. Or, you can apply directly at a bank counter. This process will be much slower, taking several weeks.

Step 4: Wait for Tax Office Review (税務署の審査)

After you submit your application, the securities firm will send your information to the Japanese Tax Agency.

This is to check if you have applied for a NISA account elsewhere. You don't need to do anything during this process, just wait. It usually takes 1 to 2 weeks.

Step 5: Account Opened, Start Investing! 🎉

Once the tax office review is complete, the securities firm will notify you by email or mail: "Your NISA account has been opened!"

After that, you can:

1. Log in to your securities account.
2. Transfer money from your bank account to your securities account.
3. Within your NISA allowance, choose the mutual funds or stocks you want to buy, and place your order!

Done! The entire process, from application to being able to invest, can take as little as just over a week, or as long as three to four weeks.

One last reminder: Starting from 2024, Japan will implement the "New NISA" system, which has higher limits, is more flexible, and is permanent! Opening an account now means you can catch this super benefit, so don't hesitate, act now!