US Persons and Japan-based Investing

[GaijinPotter]

US citizens, in fact all "US Persons" (including greencard holders) are not permitted to have or open investment accounts (brokerage accounts, mutual funds, etc.) at Japan-based financial institutions, including Citbank.

[tokyoleone]

I do not believe that is totally correct. US citizens or green card holders are free to open any kind of account they like (although it is true that Citibank does not allow them to invest in their mutual funds). However, the tax consequences for doing so can be severe as these types of investments are treated quite differently for tax purposes than US-based and SEC-registered investments. I believe that many Japanese banks and securities companies such as Shinsei, Nomura, Daiwa, etc. will be more than happy to sell you funds, stocks, etc. if you wish to buy them.

[GaijinPotter]

If you try to apply for a brokerage account or invest in mutual funds in Japan, and if you are a US citizen, I expect you will be told that such accounts are not available to US citizens. This was my first-hand experience, and it is effectively the same as Citibank's policy that prohibits US persons from investing in their mutual funds.

[tokyoleone]

As far as I know, there are no legal restrictions either in Japan or the US actually prohibiting US citizens from opening investment accounts here. I am a US citizen and hold accounts with Nomura brokerage and Shinsei bank. I had no trouble investing in a Nikko AM mutual fund through Shinsei. In fact, you can even invest in one of their funds online without even talking to anyone at the bank. The website does state however that US citizens are not allowed to invest in the US-based Fidelity funds they offer.

You are correct about CItibank. The reason they give is the complexity of compliance with SEC (US securities and exchange commission) rules and regulations regarding taxation of US citizens and "tax persons".

Indivual experiences with Japanese financial institutions may vary, some may simply be unprepared or unwilling to deal with foreigners. Personally, I have not found that to be the case. You mentioned first-hand experience - were you rejecte by a brokerage/bank because of your nationality?

[tokyoleone]

I might add that I certainly am not advocating investing in mutual funds in Japan - just that it's possible. In fact, after I realized the tax consequences of the Nikko fund (lots of forms to fill out for the IRS and and a VERY high tax rate) I quickly sold it.

[madeira]

Gaijinpotter, do you have a link? Or any idea why Japan would be forbidden? I have investment accounts in a few countries and this is the first time I've heard anything like this.

eta: I hold US funds in these accounts, too. My advisors are aware of my status, and there have been no problems.

[tanmedia]

I might add that I certainly am not advocating investing in mutual funds in Japan - just that it's possible. In fact, after I realized the tax consequences of the Nikko fund (lots of forms to fill out for the IRS and and a VERY high tax rate) I quickly sold it.

-- Well, you are a resident in Japan. If you're already paying tax on any capital gains (to the Japanese govt.), why would you even declare to the U.S. govt. that you are doing so? And if you think the IRS is going to be tracking down your mutual fund investments in Japan, you must be a person of interest to them.

[tokyoleone]

Tanmedia,

I would be quite flattered if the IRS were to consider me a person of interest, but with my modest investments, I'm rather sure I'm not. I know a lot of American expats don't report their outside-US investments. However, technically that is illegal. You're right that the risk of being caught is low but I believe it is increasing as the tentacles of the IRS reach ever further, especially in these days of post-9-11 paranoia. So I just prefer to keep most of my investments in US-based mutual funds for now.

By the way, it's my understanding that tax treatment of individual foreign stocks and bonds (like buying stocks on the Nikkei and buying Japanese government bonds) is much more favorable than mutual funds so I may eventually go that route.

Regards,
Tokyoleone

[PanicInducingGaijin]

As far as I know, there are no legal restrictions either in Japan or the US actually prohibiting US citizens from opening investment accounts here. I am a US citizen and hold accounts with Nomura brokerage and Shinsei bank. I had no trouble investing in a Nikko AM mutual fund through Shinsei. In fact, you can even invest in one of their funds online without even talking to anyone at the bank. The website does state however that US citizens are not allowed to invest in the US-based Fidelity funds they offer.

You are correct about CItibank. The reason they give is the complexity of compliance with SEC (US securities and exchange commission) rules and regulations regarding taxation of US citizens and "tax persons".

Tokyoleone is exactly right. Citibank won't let you do it at all, but with Shinsei, most of the funds are available for you to purchase.

[hunbertbest]

My Name is Ladam Best, a citizen of Nigeria,i am the director of Best wireless phone limited here in nigeria, also i have a brach in london,WE are Exporter and Inporters of mobile phones and other related electronics,

Now i want to expand my business to other country this is why i am looking for business partner that can be my manager over there, if you no you can be my manager overther or if you no your country is good for business or you no somebody that can be my business partner please reply to my company email as soon as possible, Email hunbertbest@yahoo.com

i wait to read from you thanks.

[Name Deleted]

My Name is Ladam Best, a citizen of Nigeria,i am the director of Best wireless phone limited here in nigeria, also i have a brach in london,WE are Exporter and Inporters of mobile phones and other related electronics,

Now i want to expand my business to other country this is why i am looking for business partner that can be my manager over there, if you no you can be my manager overther or if you no your country is good for business or you no somebody that can be my business partner please reply to my company email as soon as possible, Email hunbertbest@yahoo.com

i wait to read from you thanks.

If you are such a big company why do you have a web-based yahoo address?

you could be a 419 scam for all we know.

PS Mobile phones are MADE in Japan, they virtually invented the things. No idea why you want to export to Japan.

[user deleted from system]

My Name is Ladam Best, a citizen of Nigeria,i am the director of Best wireless phone limited here in nigeria, also i have a brach in london,WE are Exporter and Inporters of mobile phones and other related electronics,

Now i want to expand my business to other country this is why i am looking for business partner that can be my manager over there, if you no you can be my manager overther or if you no your country is good for business or you no somebody that can be my business partner please reply to my company email as soon as possible, Email hunbertbest@yahoo.com

i wait to read from you thanks.

This sounds like a swell idea!! Golly, I'd better get in to this great business deal...they only come around once in a lifetime. Nigeria....sounds so exotic. I bet they are great to do business with...those Nigerites. I'll get to this guy pronto and send over 20-30 thousand dollars to get this venture off the ground.

For ____s sake

[The Old Man]

My Name is Ladam Best, a citizen of Nigeria,i am the director of Best wireless phone limited here in nigeria, also i have a brach in london,WE are Exporter and Inporters of mobile phones and other related electronics,
i wait to read from you thanks.

Sounds like Lynchmob is using multiple posters

[Name Deleted]

This sounds like a swell idea!! Golly, I'd better get in to this great business deal...they only come around once in a lifetime. Nigeria....sounds so exotic. I bet they are great to do business with...those Nigerites. I'll get to this guy pronto and send over 20-30 thousand dollars to get this venture off the ground.

For ____s sake

Does he have a sister-in law to the Nigerian Finance Minister who just died in a plane crash? Im amazed there is anyone left still alive there with all these rich people getting killed off.

[Big T]

My Name is Ladam Best, a citizen of Nigeria,i am the director of Best wireless phone limited here in nigeria, also i have a brach in london,WE are Exporter and Inporters of mobile phones and other related electronics,

Now i want to expand my business to other country this is why i am looking for business partner that can be my manager over there, if you no you can be my manager overther or if you no your country is good for business or you no somebody that can be my business partner please reply to my company email as soon as possible, Email hunbertbest@yahoo.com

i wait to read from you thanks.

Hello, yes? I am rich and stupid. I want you please taking my money. OK?

i wait to hear from you thanks.