Tax-advantaged investments no lost cause for U.S. residents of Japan

While Japan has two advantageous investment vehicles accessible to both Japanese citizens and foreign residents, namely the Nippon Individual Savings Account (NISA) and the Individual Defined Contribution (iDeCo), conventional wisdom in internet finance circles dictates that U.S. taxpayers should steer clear of them. Since their country applies its full tax code to citizens and green card holders abroad, the tax implications and potential pitfalls are not worth the hassle, the truism goes.

Japan resident Rick Gundlach, a certified public accountant and attorney who runs his own practice out of both Pennsylvania and Chiba Prefecture, disagrees.

“Something I recurrently face as a U.S. tax preparer are individuals saying Americans can’t do iDeCo or NISA,” he says. “If there’s any follow-up, it’s to the effect of ‘because PFICs.’”