- Japan's 2024 NISA reform created a permanent, ¥18 million lifetime limit account with ¥1.2 million/year in the Tsumitate (accumulation) slot and ¥2.4 million/year in the Growth slot
- For long-term investors, the eMAXIS Slim All Country and eMAXIS Slim S&P500 funds remain the most popular choices — both with expense ratios under 0.1%
- Foreign residents on tax-resident status in Japan can open and use NISA accounts — but gains become taxable upon leaving Japan permanently
- In 2026, the Growth account's flexibility (individual stocks, REITs, ETFs) makes it the more powerful tool for investors comfortable with active allocation
Section 1 — What the New NISA Actually Changed
Japan's NISA (少額投資非課税制度, Small Amount Investment Tax Exemption System) underwent its most significant reform since inception in January 2024. The changes were substantial enough that financial media in Japan labeled it "new NISA" or simply "新NISA" — and the marketing worked. NISA account openings surged by over 40% in 2024, with total accounts now exceeding 23 million as of early 2026.
The structural changes matter enormously for long-term investors. Under the old system, NISA accounts had annual limits of ¥1.2 million (Tsumitate) or ¥1.2 million (General), with 5–20 year tax-free windows and no ability to "refill" used allowance after selling. The new system eliminated most of these restrictions:
The lifetime limit is ¥18 million total, with ¥12 million reserved for the Growth Investment Account (成長投資枠) and the remaining ¥6 million for the Tsumitate Account (つみたて投資枠). Annual contribution limits are ¥2.4 million (Growth) and ¥1.2 million (Tsumitate), for a maximum of ¥3.6 million per year. The tax-free status is now permanent — there is no expiry window. And crucially, when you sell an asset inside NISA, the cost basis of that sale is restored to your lifetime limit within 5 years, allowing reinvestment of proceeds without penalty.
These changes made Japan's NISA one of the most generous tax-advantaged retail investment accounts among developed economies. For comparison, the US Roth IRA caps annual contributions at $7,000 (approximately ¥1 million) and the UK ISA at £20,000 (approximately ¥3.8 million). Japan's ¥3.6 million annual combined limit (approximately $24,800) is competitive with any of them.
Section 2 — The Growth Account: What You Can Buy
The Tsumitate account is restricted to approved low-cost investment trusts (投資信託) — over 230 qualifying funds, all with expense ratios below 0.7% and monthly accumulation structures. It is designed for set-and-forget investors. The Growth account is considerably more flexible and is the focus for investors who want to do more.
Eligible Growth account instruments include: individual Japanese stocks listed on the Tokyo Stock Exchange (TSE), Japanese REITs (J-REITs), domestically-registered ETFs tracking Japanese and foreign indices, and approved investment trusts including those investing in foreign markets. Notably excluded are: leveraged and inverse ETFs, individual foreign stocks, cryptocurrency products, and certain high-cost active funds.
This means the Growth account is well-suited for building a diversified core portfolio of low-cost index funds alongside targeted Japanese equity positions or J-REITs. An investor could, for example, hold eMAXIS Slim All Country (全世界株式) as their primary global equity position, supplement with direct holdings in Japanese financial stocks benefiting from rate rises, and layer in a J-REIT ETF for income exposure — all within the ¥2.4 million annual Growth limit, entirely tax-free.
Section 3 — Top Fund Picks for 2026
| Fund Name | Ticker/Code | Expense Ratio | AUM (¥B) | Best For |
|---|---|---|---|---|
| eMAXIS Slim All Country | 253266 | 0.057% | ¥6,800B | Core global diversification |
| eMAXIS Slim S&P500 | 253266 | 0.09372% | ¥4,200B | US equity concentration |
| eMAXIS Slim Developed ex-Japan | 0331418A | 0.10% | ¥890B | Non-Japan developed markets |
| Nikkei 225 Index Fund (Fidelity) | 3281006C | 0.154% | ¥340B | Japan domestic equity |
| iShares TOPIX ETF (TSE: 1475) | 1475 | 0.065% | ¥1,100B | Broad Japan coverage via ETF |
| Nippon India Index Fund | 9I31119A | 0.2% | ¥180B | Emerging market satellite |
The eMAXIS Slim series from Mitsubishi UFJ Asset Management has become the default choice for cost-conscious Japanese investors, and for good reason. The All Country fund, tracking the MSCI ACWI Index, now holds over ¥6.8 trillion in assets — remarkable for a fund less than eight years old. Its expense ratio of 0.057% is among the lowest globally for an all-world fund and competes directly with Vanguard's VT (0.07%) in pure cost terms.
The S&P500 fund remains the most popular single fund in Japan's NISA universe, reflecting Japanese retail investors' appetite for US large-cap exposure. Whether this concentration makes sense in 2026 — with US valuations elevated and yen appreciation potentially compressing returns when converted back to yen — is a legitimate debate. A split allocation (70% All Country, 30% domestic or fixed income) is increasingly recommended by Japanese financial planners as a more resilient core.
For income-oriented investors, J-REIT ETFs accessible through the Growth account — particularly the iShares Core J-REIT ETF (TSE: 1476) and Nikko AM TSE REIT Index (TSE: 1595) — offer dividend yields in the 3.5–4.5% range, sheltered entirely from the 20.315% withholding tax that would otherwise apply.
Section 4 — Practical Guide: Opening NISA as a Foreign Resident
Foreign residents on mid-term visa status (1–3 years) can open NISA accounts, but the account must be closed — and all remaining tax benefits forfeited — within one year of departing Japan permanently. This is enforced via the requirement to notify your securities firm when you leave. Failing to do so exposes you to back-taxation on gains. Plan your exit timing carefully.
Opening a NISA account in Japan requires: Japanese tax residency (you must have a My Number/マイナンバー), a Japanese bank account, and a Residence Card. Foreign residents on Highly Skilled Professional, Engineer/Specialist in Humanities, or Business Manager visas qualify fully.
The most foreigner-friendly securities firms for NISA opening are:
SBI Securities (SBI証券): Japan's largest retail broker by NISA accounts. English interface available for basic navigation. Supports the full range of Growth and Tsumitate instruments. Monthly fee: ¥0.
Rakuten Securities (楽天証券): Strong app interface, deep integration with Rakuten Point system (points can be used to purchase fractional fund units — a uniquely Japanese feature). English support limited but improving.
Monex Securities (マネックス証券): Most English-friendly of the major brokers. Slightly smaller product range than SBI but easier onboarding for non-Japanese speakers.
For investors comfortable operating entirely in Japanese, SBI Securities offers the deepest product range and most competitive fund pricing. For those who need English support, Monex is the pragmatic choice.
One frequently overlooked advantage of the NISA Growth account for foreign residents: Japanese dividend withholding tax is eliminated on J-REIT distributions and domestic stock dividends held within NISA. For high-dividend Japanese stocks — major banks, utilities, telecommunications companies — the after-tax yield differential versus taxable accounts can be 0.8–1.5 percentage points annually, which compounds significantly over a decade-long investment horizon.
Data as of March 2026. Regulations change — verify before acting.
— iBuidl Research Team