Job Discussion Forums

[Yawarakaijin]

Hi everyone, just wondering if there may be anyone out there able to answer a few questions/point me in the right direction.

As part of my new years resolution I have decided to get into playing the stock markets. Admittedly I have not done the required research and don't plan on throwing any money in until I have done so, but I have a few starter questions that maybe some expats might have some experience with.

1.) I've noticed a lot of the online trading sites require a US/Canadian/British address. How would this affect a non-resident of said countries? Is the address just a requirement for signing up for the site or would it require you to pay the capital gains taxes of said country?
Are you required to have a bank account within the country you are "trading from"?

I have a lot of questions in regards to how this may or may not affect my non-resident status and who I would pay taxes too?

2.) Is it possible to avoid this whole messy situation? Do any of you use a Japan based trading site or stock broker based in Japan? Would that be the way to go?


I realize this post is kind of all over the place but I have just a few minutes before work and was wondering if anyone could throw a little light on this subject for me. Thanks in advance.

[Chris21]

A non-resident would become a resident again if using a trading site from their home country. This would not only open you up to taxes on your capital gains, but also on your income in Japan.

Japan-based trading sites are definitely the way to go. You don't get as high a return on dividends if investing in foreign companies (because of higher taxes for non-resident dividends), but your capital gains and employment income would be protected from tax authorities back home.

I've found Rakuten and E*Trade Japan are the best in Japan for buying/selling foreign companies. Rakuten is safe but their selection is limited... there are a lot of Dow and Nasdaq stocks that they don't offer. E*Trade has a better selection (I think) but they are on the verge of bankruptcy. Their 4th quarter results are due on Jan 24.

[Yawarakaijin]

Thanks for the info. I imagined using one of those sites would affect my non-resident status. I'm curious. Do you know any Japan based online trading site that offer English language suppourt? I just don't have the kanji skills to feel comfortable messing around there in Japanese.

[Chris21]

Unfortunately none of the J-sites (kabu.com, UFJ's stock trading site, Rakuten and E*Trade Japan) offer any kind of English support (on the sites or with telephone operators), but if you can get someone to help you open the account, it's actually pretty easy to navigate the Rakuten site (can't speak for the other sites). I have pretty poor kanji skills but I'm able to figure out the links for "buy", "sell", "order status", etc. If you have experience with Western trading sites (like BMO Investorline in Canada), it helps when navigating in Japanese.

Alternatively, it's fairly simple to open an E*Trade Hong Kong account. They have everything in English, but there is the concern that your investments would be pretty far from you (in case something went wrong, it might be difficult to get them in order). Also,the extent of E*Trade's financial problems are not known yet (although things should be clearer after Jan. 24)