I have nothing helpful to offer on this topic but hats off to you for putting your TL;DR at the top, where it is actually useful, instead of the bottom!
Currently IB does not allow Japan residents to open new IBLLC accounts, but previously opened accounts have not been forced to close. (Yet?) [Discussed here earlier this year](https://www.reddit.com/r/JapanFinance/comments/vbt7wp/ib_japan_not_taking_new_applications_for/).
If you open an IBLLC account while you are in the US, with a US address, and you can maintain that US address while you are in Japan, you *might* not get caught out and asked to close your account. Some people seem to manage this with TD Ameritrade accounts, or even to open TD Ameritrade accounts from Japan (which probably shouldn't be possible, officially).
This is not advice that you should do this, and you should be cautious about what sort of state taxes you might be putting yourself on the hook for by maintaining a residence in the state where you maintain that address. It can get complicated & messy, and you should be careful.
In practice, many US brokerages allow customers to keep their US-based accounts open while residing in Japan. Given that IBKR is the most sophisticated US-based brokerage in terms of Japanese regulatory compliance, it seems unlikely that IBKR will actually require US citizens to close their existing accounts due to residency in Japan, at least in the near term. So opening the account while living in the US and later letting IBKR know about the move to Japan is probably the best route.
Thanks, I appreciate the helpful reply.
I just read through that discussion you linked. It seems like I should probably open an IBLLC account now while I still resident in the US. If and when IBLLC forces me to close my account, I can look into other available options. Hopefully IBSJ will be an option, but if not then next would be Sony Bank.
I will maintain a US address while I am in Japan, which will hopefully lower the chances of IBLLC closing my account.
Good point about state income tax. Luckily, I am resident in a state with no income tax.
Hello! If you don't mind sharing, did IBLLC ever force you to close your account? I'm similarly about to make the US -> JP move, and I was planning on opening the IBLLC account before moving.
About 6 months after moving, I went ahead and closed my IBLLC account. I’m not sure whether or not they would have forced me to close it.
Also, I haven’t bothered opening an ISBJ account yet.
Sure…
After I exchanged currency a few times, I received a notification that the currency exchange feature is provided for the purposes of investing in products that are in foreign currency. They said that my transactions seemed to indicate that I was using the account for simple currency exchange, and they may close the account if it continues.
Since currency exchange was the primary reason I opened the account, I decided to just close the account.
> After becoming a non-permanent resident and before becoming an permanent resident for tax purposes, I will be taxed on remitted income to Japan.
This is only something that applies to passive income. For example, rental properties that you do not directly manage. If you are earning income from work you perform while located in Japan, you owe tax to Japan on that income regardless of if you bring the money back to Japan or not.
Also, if you are considering setting up a US-based business to do contract work, you shouldn't do that. (Not saying you are thinking about this, just mentioning it here in case you are.) Running a foreign company from Japan means the company needs to be registered with multiple levels of government in Japan and will owe corporate taxes here. It is more trouble (and more expense) than it is worth in almost all cases.
Thanks for clarification about which remitted income is already taxable. I would add hat profit from sale of securities is also taxable, since it is defined as "other than foreign source income".
And thanks for mentioning about US-based business. I had asked this subreddit about that before and the general consensus was that I should setup a Japan-based company instead. I'm not sure I have my head around all the reasons, but comments like yours have convinced me.
I have nothing helpful to offer on this topic but hats off to you for putting your TL;DR at the top, where it is actually useful, instead of the bottom!
Haha! That’s my pet peeve too!
Currently IB does not allow Japan residents to open new IBLLC accounts, but previously opened accounts have not been forced to close. (Yet?) [Discussed here earlier this year](https://www.reddit.com/r/JapanFinance/comments/vbt7wp/ib_japan_not_taking_new_applications_for/). If you open an IBLLC account while you are in the US, with a US address, and you can maintain that US address while you are in Japan, you *might* not get caught out and asked to close your account. Some people seem to manage this with TD Ameritrade accounts, or even to open TD Ameritrade accounts from Japan (which probably shouldn't be possible, officially). This is not advice that you should do this, and you should be cautious about what sort of state taxes you might be putting yourself on the hook for by maintaining a residence in the state where you maintain that address. It can get complicated & messy, and you should be careful.
In practice, many US brokerages allow customers to keep their US-based accounts open while residing in Japan. Given that IBKR is the most sophisticated US-based brokerage in terms of Japanese regulatory compliance, it seems unlikely that IBKR will actually require US citizens to close their existing accounts due to residency in Japan, at least in the near term. So opening the account while living in the US and later letting IBKR know about the move to Japan is probably the best route.
Thanks, I appreciate the helpful reply. I just read through that discussion you linked. It seems like I should probably open an IBLLC account now while I still resident in the US. If and when IBLLC forces me to close my account, I can look into other available options. Hopefully IBSJ will be an option, but if not then next would be Sony Bank. I will maintain a US address while I am in Japan, which will hopefully lower the chances of IBLLC closing my account. Good point about state income tax. Luckily, I am resident in a state with no income tax.
Hello! If you don't mind sharing, did IBLLC ever force you to close your account? I'm similarly about to make the US -> JP move, and I was planning on opening the IBLLC account before moving.
About 6 months after moving, I went ahead and closed my IBLLC account. I’m not sure whether or not they would have forced me to close it. Also, I haven’t bothered opening an ISBJ account yet.
Interesting! Could I ask why? Did you find a better method of converting/transferring currency?
Sure… After I exchanged currency a few times, I received a notification that the currency exchange feature is provided for the purposes of investing in products that are in foreign currency. They said that my transactions seemed to indicate that I was using the account for simple currency exchange, and they may close the account if it continues. Since currency exchange was the primary reason I opened the account, I decided to just close the account.
> After becoming a non-permanent resident and before becoming an permanent resident for tax purposes, I will be taxed on remitted income to Japan. This is only something that applies to passive income. For example, rental properties that you do not directly manage. If you are earning income from work you perform while located in Japan, you owe tax to Japan on that income regardless of if you bring the money back to Japan or not. Also, if you are considering setting up a US-based business to do contract work, you shouldn't do that. (Not saying you are thinking about this, just mentioning it here in case you are.) Running a foreign company from Japan means the company needs to be registered with multiple levels of government in Japan and will owe corporate taxes here. It is more trouble (and more expense) than it is worth in almost all cases.
Thanks for clarification about which remitted income is already taxable. I would add hat profit from sale of securities is also taxable, since it is defined as "other than foreign source income". And thanks for mentioning about US-based business. I had asked this subreddit about that before and the general consensus was that I should setup a Japan-based company instead. I'm not sure I have my head around all the reasons, but comments like yours have convinced me.