What Happens to Your NISA When You Move Abroad? The Continuation Notice, the Five-Year Return Deadline, and U.S. Tax (PFIC)

If you invest through Japan’s current NISA program, launched in 2024, and you are about to move abroad for work or for good, you will want answers to three questions: can you keep the account, what happens to your monthly purchases, and how long can you stay away and still keep the tax exemption?

NISA is designed for residents of Japan, and in principle the account is treated as closed when you leave. But people who leave temporarily because their employer transferred them can file a continuation notice before departure and keep the exemption on existing holdings. This article walks through the requirements and deadlines under Japan’s Act on Special Measures Concerning Taxation (Article 37-14) and guidance from the Financial Services Agency (FSA) and the National Tax Agency (NTA), then briefly covers how a NISA is taxed once you are a U.S. resident.

Key points

• When you leave Japan and no longer have an address or residence there, your NISA account is, in principle, treated as closed at departure, and the holdings move to a taxable account.
• If you leave temporarily because of a transfer order from the employer that pays your salary, or a similar unavoidable reason, you can file a continuation notice (keizoku tekiyo todokedesho) with your brokerage by the day before you leave. Existing holdings stay tax-free in Japan, but you cannot buy anything new while abroad.
• To resume purchases after you return, file a return notice (kikoku todokedesho) by December 31 of the year that includes the date five years after you filed the continuation notice. Miss it, and the account is treated as closed on that date.
• People subject to Japan’s exit tax in the departure year cannot use the continuation notice, and not every brokerage offers it.
• Once you are a U.S. resident, the NISA exemption does not carry over to your U.S. return. Japanese investment trusts may also be PFICs.

What happens to a NISA when you leave Japan

Under the statute, a NISA holder who stops being a resident because of departure must file a notice with the brokerage by the day before leaving. There are two kinds:

	Continuation notice	Departure notice
Who	People leaving because of a transfer order from the employer paying their salary, or a similar unavoidable reason, who plan to use the NISA again after returning	Everyone else
Deadline	Day before departure	Day before departure
While abroad	Existing holdings stay tax-free in Japan	Account treated as closed at departure
New purchases	Not allowed	Not applicable
After return	File a return notice to resume purchases	Open an account again (check with your brokerage)

When an account is treated as closed, the holdings are moved to a taxable account. The law treats them as sold and repurchased at their value at that time. For Japanese tax purposes, the gain up to that point stays tax-free, and that value becomes your new Japanese cost basis.

Requirements for the continuation notice

• Reason: a transfer order from the employer that pays your salary, or a similar unavoidable reason. Ask your brokerage whether a job change or a personal move qualifies.
• Plan to return: you intend to use the NISA account again after you come back.
• Exclusion: if you are subject to the exit tax (Income Tax Act Article 60-2) in the year you leave, you cannot file it. The exit tax generally applies to people leaving with securities worth 100 million yen or more who lived in Japan for more than five of the previous ten years; see Navigating Japan’s Exit Tax and US Dual-Status Filing.
• Where and when: to the branch of the brokerage holding your NISA, by the day before you leave. Electronic submission is permitted.
• Availability: the FSA notes that whether a firm handles continuation differs by firm. Confirm early, especially if you were planning to switch providers.

What you can and cannot do while abroad

Item	After filing a continuation notice
Holding investments bought before departure	Allowed, tax-free in Japan
Dividends, distributions, and sale gains on those holdings (Japanese tax)	Remain exempt
New purchases in either the tsumitate or growth allowance	Not allowed; anything acquired between departure and the return notice cannot go into the NISA
Automatic monthly purchases	Stop them, following your brokerage’s instructions
Resuming purchases	Requires the return notice

Remember that a Japanese exemption is not a U.S. exemption. Income you receive while a U.S. resident is reportable in the U.S., as discussed below.

Coming back: the return notice and the five-year limit

To use the account again, file a return notice stating that you have returned and the date, with the same brokerage. The deadline is December 31 of the year that includes the date five years after you filed the continuation notice.

Continuation notice filed	Return notice due by
October 20, 2026	December 31, 2031
March 1, 2027	December 31, 2032

If you do not file in time, you are treated as having closed the account on that December 31, and the holdings move to a taxable account. If your assignment may run past five years, decide before that year whether to sell or to keep the investments in a taxable account.

Example: an extended assignment

Example: You file the continuation notice on October 20, 2026, and leave for the U.S. on October 25. You hold an investment trust bought in the growth allowance for 2 million yen, worth 2.6 million yen at departure.

• Case A, return in April 2029: you file the return notice, the trust stays in your NISA, and you can buy again.
• Case B, assignment extended and no return notice by December 31, 2031: the account is treated as closed that day. If the trust is worth 3 million yen then, the 1 million yen gain stays tax-free in Japan and your Japanese cost basis in the taxable account becomes 3 million yen.

In both cases, distributions and gains received while you are a U.S. resident belong on your U.S. return, computed under U.S. rules regardless of the Japanese exemption. Keep your original purchase dates, prices, and distribution records.

How a NISA is treated once you are a U.S. resident

The IRS says that during the part of the year you are a U.S. resident, you are taxed on income from all sources. The NISA exemption is a Japanese rule, so dividends and gains inside the account are ordinary investment income on a U.S. return. Three points to watch:

• PFIC: the Instructions for Form 8621 define a passive foreign investment company as a foreign corporation with 75% or more passive income or at least 50% passive assets. Japanese investment trusts and ETFs may qualify. A shareholder generally files Form 8621 for each PFIC when receiving certain distributions, selling, making elections, or meeting the annual reporting rule. Part I is not required if total PFIC stock is $25,000 or less ($50,000 on a joint return) at year-end and there was no excess distribution or gain.
• FBAR: the IRS lists brokerage accounts and mutual funds as foreign financial accounts and says it does not matter whether the account produced taxable income. If your foreign accounts total more than $10,000 at any time during the year, an FBAR is required.
• Form 8938: an unmarried taxpayer living in the U.S. files if specified foreign financial assets exceed $50,000 at year-end or $75,000 at any time during the year.

For PFIC calculations and elections, see Japanese Investment Trusts as PFICs? and Japanese NISA and iDeCo are Taxable in the US. Whether to keep the account under a continuation notice or tidy it up before you leave depends on how long you will be away, what you hold, and the U.S. reporting burden.

FAQ

What if I forget to file the continuation notice?

The account is treated as closed when you stop being a resident, and the holdings move to a taxable account at their value at that time.

Can I sell NISA investments while abroad?

With a continuation notice on file, gains and dividends on holdings bought before departure stay exempt in Japan. They are still reportable on your U.S. return while you are a U.S. resident.

Can I keep my monthly purchases going?

No. Investments acquired between your departure and your return notice cannot go into the NISA account.

My assignment may last more than five years. What should I do?

After the return notice deadline passes, the account is treated as closed. Plan before that year whether to sell or to hold the investments in a taxable account.

At CLT NY INC., an IRS Enrolled Agent prepares U.S. returns for NISA and Japanese fund holders, including PFIC reporting on Form 8621, FBAR, and Form 8938, in English or Japanese. Contact us.

Related articles

• Are NISA and iDeCo Taxable in the U.S.? The Crucial Differences in Tax-Advantaged Investment Accounts Between Japan and the U.S.
• Japanese NISA and iDeCo are Taxable in the US: The PFIC Problem and Risks of Unknowingly Holding Them
• Japanese Investment Trusts as PFICs? US Residents Must Know the High Tax Risk and Avoidance Strategies (QEF)
• Form 8938 vs. FBAR (FinCEN Form 114): Thresholds, Covered Assets, Deadlines and Penalties Compared [2026]
• Expat’s Essential Guide: Navigating Dual-Status Tax Filing for US Arrival & Departure Years
• Tax Checklist Before Moving from Japan to the U.S.: Resident Tax, Year-End Adjustment, Final Return, and Tax Agent (2026)

Sources: Act on Special Measures Concerning Taxation, Art. 37-14 (e-Gov); FSA NISA FAQ; NTA NISA Q&A; NTA No.1478 (exit tax); IRS: Taxation of dual-status individuals; IRS: Instructions for Form 8621; IRS: FBAR; IRS: Do I need to file Form 8938?. Information as of October 2026. This article provides general information and is not individual tax advice.