# Bankless In Japan



## expatriotically

Hi all,

Is it possible to work in Japan without having direct deposit or even a bank account? I know employers don't do checks but could there be a way? Regardless of why I want to go bank free, does anyone have any comments?


----------



## larabell

You need to ask your employer. It's certainly possible that you can convince them to hand you a wad of cash every month but that's not very common and if you work for a large company or make a significant amount of money, they may well refuse. BTW, checks do exist in Japan and some companies can issue them -- but if you're living in Japan it's likely to be a hassle to cash them without a bank account. Also you're likely to draw unwanted attention from the tax officials.

You'd be better off setting up an account for the direct deposit and just withdrawing the cash the next day if you prefer not to keep it there.


----------



## Luisa

you could always open a postal account instead of a `bank` account. Japan Post, or if you live in the country there are loads of options, JA, local fisherman organisations that all have some sort of banking structure. It`s usually localised within the prefecture too.


----------



## expatriotically

It's a no go with the employers. Lift a finger to change policy because it's inconvenient for a gaijin? I think the Japan Post is basically a bank as far as it concerns my issue. But thanks for the input fellows.


----------



## larabell

expatriotically said:


> Lift a finger to change policy because it's inconvenient for a gaijin?


It's probably not a "finger" in this case. The entire Japanese economy is based on electronic transfer and has been for a long time. They'd probably have to send someone to the bank to withdraw your money and then fill out extra forms come tax time to explain where the money went and why.

If you could give us a hint as to why you're allergic to banks, someone might be able to make a more useful suggestion...


----------



## expatriotically

That makes sense larabell, thanks. The reason I want to go bank free is because all US citizens will lose their banking privacy rights after FATCA comes in play, and after they sign the waiver, that is.


----------



## larabell

At the moment, you only have to file under FATCA if you have a substantial amount of money in the bank (over $50k at the end of the year if you're single, $200k if you're actually living in Japan) so the idea of having your employer deposit the money and you take out whatever's left after paying rent and everything else before the next deposit would keep you from having to file anything extra.

As for the institution reporting your account -- they already report interest to the Japanese tax authorities (not to mention your employer reporting your salary) and Japan has a treaty with the US to share tax-related information so if you accumulate enough in your account(s) to attract attention, the IRS can find out about it eventually anyway.

You can get out of the reporting requirement by transferring your money to a US bank account on a regular basis -- but, of course, that won't help keep the information out of the hands of the IRS. There's also a clause about foreign subsidiaries of a US bank not falling under FATCA so, presumably, you could accumulate money in a Citibank account here and not trigger any additional reporting requirements -- but like any other US bank, Citibank reports to the IRS.

Do you know this website has a new forum specifically dealing with tax issues. I know banking privacy isn't strictly a "tax issue" but the reason things are becoming so transparent is the result of the IRS trying to crack down on tax cheats living abroad so there may be some useful information there.


----------



## expatriotically

Though earned interest is reported to the tax authority and taxed, if the IRS could simply request the information from the Japanese tax authority then they wouldn't be needing citizens to sign waivers in order to have the information released from the banks. Is this not so?

It is unfortunately too late to "get out of the reporting requirement" as almost no Americans in Japan or elsewhere, were aware of their FBAR filing requirements and I'm sure have already failed to file thus subjecting themselves to heavy fines as soon as they file delinquent FBARS, enter the OVDI, or FATCA comes into effect!


----------



## larabell

I don't see anything on the IRS web site about signing waivers.

As for FBARs, this has been discussed in depth on the tax forum but my understanding is that filing back FBARs with an explanation letter saying you simply weren't aware of the requirement may be enough to get you off the hook. The intention is to rout out tax cheats -- if someone has reported and paid the interest, I wouldn't expect them to be raked over the coals.

Of course, if you have a problem with back FBARs that means you have more than $10k in one or more Japanese banks already so I'm not entirely sure how getting your employer to stop putting your salary in a bank would change anything there. If the idea is to not fall under FATCA, hoping nobody will notice the missing FBARs, just make sure you take the money back out of the bank before you reach $200k.


----------



## expatriotically

If you are interested in reading about waiver I mentioned, google irs fatca. IRS Notice 2011-60 p.21 para 3. 

They aren't letting people off the hook anymore. If they aren't assessing penalties then how have they raised over $4 billion from 33,000 people? No one can meet their "reasonable excuse" criteria. 

And this submitted to expatforum. In it you can educate yourself about what is really going on behind IRS curtains. I was a real eye opener for me at least. 

OVDI #1 (2009):
http://www.morganlewis.com/pubs/TaxR...s_21sept10.pdf
OVDI #2 (2011) and beyond:
http://www.morganlewis.com/pubs/TaxN...er_18oct11.pdf

The reason I am worried about fatca so much is that they are more likely to uncover if someone missed fbar filing after Japan signs fatca. Read those 2 reports and you will see just what all the fuss is about.


----------



## larabell

IRS Notice 2011-60 is about low income housing credit in North Dakota and it's only 7 pages long. I believe you meant 2010-60. If so, the paragraph in question just says that if you don't give your FFI permission to share your information with the IRS and if that prevents them from sharing the information under local law, the FFI has to withhold taxes from any interest you might receive. That doesn't sound all that dire -- most banks in Japan pay little or no interest anyway and... besides... you do claim that as income, right? So just add the amount the bank withholds to your return and you'll get it back at the end of the year (assuming the exclusion brings your total tax down to zero).

It might be worth asking your bank if they're allowed to share your account information with the IRS without your permission. I'm not sure what, if anything, the Japanese government is doing in connection with FACTA -- as far as I can tell, it's a US law, not an international treaty. It will be interesting to see what the US decides to hold over their heads to get every non-US financial institution in the entire world to submit reports to the IRS in US dollars.

If you keep your account balance below $50k, the bank can opt not to report your information to the IRS. You might want to quiz your bank about this and maybe change banks if need be. In that case, I've heard that Japan Post is the most protective of their account information for what it's worth.

Also, the links you posted are broken. If you don't have enough forum posts to allow posting of links, you can PM me the links and if they're relevant I should be able to post them myself. Or just post the page names and I should be able to search for them on on the Morgan-Lewis web site (a quick search just for the part of the name that didn't get deleted came up empty).

Another possibility is to find a Japanese National whom you really trust (and who trusts you), get an inkan made with their name, and have then open an account for you in their name. Make sure your employer can transfer your salary to an account that's not in your name -- they should be able to. You may have some trouble paying certain bills that are in your name, but that's what furikomi is for. Also, technically, you'd still be in violation of FBAR requirements if you hold the inkan and have access to the funds -- but the bank probably won't report you to the IRS and, even if they do, the IRS won't be able to link the account to you. Of course, IANAL, so if you go that route, I don't want to know about it ;-).


----------



## expatriotically

You are right. It was 2010-60. I was thinking of the other one 2011-34. It's a little different but equally boring to read through. But, really the point I was trying to make about the waiver is that one customer being recalcitrant can lead to the bank itself being considered out of compliance if I'm not mistaken which leads to withholding on their income, too, which I'm sure they would not tolerate. 

It is a US law for sure but from what I've read, what will be held over the foreign banks heads will be a 30% withholding on all US source income if they are deemed non-compliant. Basically it's going to get expensive not to give in to Uncle Sammy. 

Did you try pasting the url? They worked before I sent them, honest. 

I had asked my employer wether they could do direct deposit in another's name. They said no dice. They said my name had to be on the account so while someone else could probably open an account in their name and let me use it, I don't think I could route my direct deposit there, again not in my name, and I wouldn't want to drag some innocent poor soul into the quagmire the US imperialists have over the financial world. End rant. 

Thanks for the tips though, and let's continue thinking of ways to beat the system.


----------



## Guest

I thought there only was once an IRON CURTAIN. Now the IRS got hold of this idea? Seriously, what do the acronyms FATCA, FBARS and OVDI stand for? Since I am a US citizen here in Japan naturally I am concerned with it also.


----------



## larabell

They're references to US tax laws. Drop any one of them into Google and you'll find plenty of information. To make an otherwise long story short, US citizens are taxed on their worldwide income, regardless of where they live. Congress has been passing laws to make it harder to avoid this obligation by living and/or banking overseas.


----------



## Guest

*bankless in Japan*



larabell said:


> They're references to US tax laws. Drop any one of them into Google and you'll find plenty of information. To make an otherwise long story short, US citizens are taxed on their worldwide income, regardless of where they live. Congress has been passing laws to make it harder to avoid this obligation by living and/or banking overseas.


Thank you, I didn't know that. Some of us have moved here for various reasons other than tax evasion. You get a few rotten apples in the bunch which makes it miserable for the rest of us.


----------



## expatriotically

Close any accounts that are potentially problematic before June 30, 2013.


----------



## Guest

*bankless in Japan*

Is it that bad already? I can't open one up here in Japan yet. My account is still in the US.


----------



## expatriotically

marzipan said:


> Is it that bad already? I can't open one up here in Japan yet. My account is still in the US.


Of course you can open a new account. Having an account isn't a problem. Next year when you file your income tax return for 2012, be sure to file a 1040b stating that you do have a foreign bank account. As long as you report it, you'll be fine. Also if your account ever gets above $10k U.S be sure to report that by June 30 of the year following the reporting year using TDF 90-22.1. You can get all those forms from the IRS website. As long as you report both those things whenever they apply to you, then you will likely never run afoul of the IRS.


----------



## Guest

thanks, I will save this information. IRS= money mafia ?


----------



## mphone

*Renunciate*

I would not suggest performing any suspicious activity like suddenly closing your accounts or tieing your name to a spouses account. If you plan to return, then these actions could put you (and any spouse) in a precarious situation with the IRS.

Only you can ascertain how far you are willing to go to escape FATCA and FBAR. Depending on your feelings, cut out the middle man and become a Japanese citizen or a citizen of any other country. As far as I know, the US is the only country with such a reporting requirement for internationally operated banks. You may want to also change banks after acquiring your new citizenship. Also, you would not want to mention tax evasion as your reason for renunciation.


----------



## BBCWatcher

Well, Japanese gift and estate/inheritance taxes, even between spouses, aren't exactly fun. The spousal annual gift limit is a mere 1.1 million yen, and that limit is "sticky" for 5 years after leaving Japan.

Every country has its tax and financial quirks, really. U.S. FATCA/FBAR (if either/both apply) are mere reports and have no tax liabilities associated with them.

By the way, if your account is held at Citibank Japan (assuming you gave Citibank your U.S. Social Security number or ITIN) that account _does not_ count toward FATCA (IRS Form 8938) thresholds. But a Citibank Japan account _does_ count toward FBAR (FinCEN Form 114) thresholds, so you still might have to file that report annually. (Which takes about 10 minutes to do, online.) So if you want to avoid even the chance of having to file IRS Form 8938 (one of the two possible forms in this category), open your bank account at Citibank Japan. Which is, actually, a rather good bank in Japan, at least as long as you can maintain the minimum balance to avoid maintenance fees.


----------



## larabell

Of course, rumor has it that Citibank has sold their retail banking operation to SMBC. I only saw one news item and haven't received anything to confirm that from either Citibank or from SMBC so for now it's only a rumor.


----------



## Raffish_Chapish

larabell said:


> Of course, rumor has it that Citibank has sold their retail banking operation to SMBC. I only saw one news item and haven't received anything to confirm that from either Citibank or from SMBC so for now it's only a rumor.


I heard this too - seems pretty reliable from what I've heard


----------



## BBCWatcher

Good point. It does look pretty solid, and it looks like the sale will complete in late 2015.

I'm not aware of any other U.S. financial institutions offering ordinary retail banking services in Japan. However, I hope SMBC will at least continue cutting 1099s for the Citibank Japan clientele they're picking up. We shall see.


----------



## Raffish_Chapish

BBCWatcher said:


> Good point. It does look pretty solid, and it looks like the sale will complete in late 2015. I'm not aware of any other U.S. financial institutions offering ordinary retail banking services in Japan. However, I hope SMBC will at least continue cutting 1099s for the Citibank Japan clientele they're picking up. We shall see.


Shinsei is easy to set up with and you can withdraw cash free from convenience stores...


----------



## larabell

Hmmm... When I went to Shinsei I had them check whether they could handle my rent auto-payment and they couldn't -- something to do with not having connections with the bank that my landlord was using. Now... this was many years ago and they might be more "connected" now but before setting up the account, it might pay (no pun intended) to bring along a list of all the payees you're going to want to auto-pay. Citibank is the same... when I checked they couldn't handle everything.

BTW, SMBC lets me withdraw cash from convenience stores at no charge (at least at Family Mart). I believe that started right after the 3/11 quake when some of the banks started shutting down small ATM-only branches in favor of using convenience store ATMs.


----------



## Raffish_Chapish

Actually you are right - I forgot they won't let me pay my Docomo phone through them!


----------



## BBCWatcher

Raffish_Chapish said:


> Shinsei is easy to set up with and you can withdraw cash free from convenience stores...


An account at Shinsei (or at any other non-U.S. financial institution) is IRS Form 8968 ("FATCA") reportable and counts toward reporting thresholds, the point I responded to upthread. Until SMBC acquires Citibank Japan, accounts held at Citibank Japan are not Form 8968 reportable and do not count toward reporting thresholds.

Some people care about that difference. I don't think it's particularly interesting, actually, but perhaps others disagree.


----------



## larabell

Well... the OP obviously thought that was important.

One thing I've advised people to do in the past is open one account at Citibank and one with a real Japanese bank (not Shinsei). That was pre-FATCA and the main reason was so one could do most of their online banking in English and handle all the auto-payment stuff through the Japanese bank. You could move a small chunk of money from Citibank to the Japanese account every few months just to cover the auto-payments.

That would mostly shield you from FATCA if it weren't for the upcoming merger between Citibank and SMBC. It could still do so if SMBC treats the Citibank accounts as US-based and issues 1099s but I wouldn't put money on that actually happening.

That said, I do a lot of banking with SMBC and I have yet to have them ask me where I'm from or for any passport or SSN information whatsoever. I'm hoping that means they don't care... but I'm not putting any money on that being the case, either.

If you withdraw almost all of the money from an account soon after each payday, the balance will never accrue to the point where an FBAR or FATCA filing would be necessary. The trouble is finding someplace to accumulate wealth since anything other than cash under a mattress or buying gold or real estate is likely to eventually trigger the reporting requirements. If the money is legitimate income and you're filing US taxes, I'd say just bite the bullet. The FATCA threshold is fairly high for someone living outside of the US and the hassle of avoiding the reporting requirements isn't worth it (IMHO). Plus... if the IRS ever discovers such shenanigans by accident, it's going to raise a huge red flag.


----------



## DavidMac

As a foreigner, what documents do you need to open a bank account in Japan? Will work visa and Passport suffice?


----------



## BBCWatcher

No. You'll need a _resident card_. Your visa is irrelevant once you've entered Japan.


----------



## Raffish_Chapish

Resident Card (you get this from your local ward office, this has your official address on the back, this is what they want) and passport. They will also want a Japanese phone number in my experience


----------



## BBCWatcher

Resident cards haven't been issued at ward offices since 2012. You now get them either upon landing at certain airports or at regional immigration offices. You only report a change of address at the ward office. See here (official Japanese government site) for details.

If you have an old ward office-issued card you'll be renewing your card at the regional immigration office when the time comes. That time should come soon if it hasn't already, since I think the last batch of those older cards expires this year (2015).


----------



## Raffish_Chapish

BBCWatcher said:


> Resident cards haven't been issued at ward offices since 2012. You now get them either upon landing at certain airports or at regional immigration offices.]
> 
> Oh yeah that's right - but your first time here you will have to go to your ward office and get your address put on the back - that's what I meant soz!


----------



## DavidMac

Ok Thanks for the info guys! So even if my VISA is only for 6 months, and I will only actually be in Japan for 4 months I still have to get one? I'm assuming that mid-long range means time > 3 months?


----------



## BBCWatcher

Your visa permits entry for a specific purpose only. Once you've entered, it's "burned." It doesn't actually matter how much time is marked on the visa. (That only indicates the maximum approvable time at entry. Officials at entry set whatever time limit they wish equal to or less than your approved visa.)

You should get a residence card when you arrive at a major airport in Japan with your more-than-short-stay visa. However, if you don't, your stay is limited to the amount of time specified on the sticker passport control affixes to your passport. If you want to stay longer than that you have to go get a residence card (or an amended stamp in your passport at least).

To open a bank account you need a residence card and ID (your passport).


----------



## Raffish_Chapish

I thought working Visa's were only 1 or 5 years these days...they just got rid of 3 years in Jan


----------



## BBCWatcher

Maybe, but the visa term _never_ matters except as a cap for the next approval in sequence, and there's always a next approval in sequence (entry). What matters is the term approved upon or after entry. That's always been true. Japanese authorities have always had the ability (and often exercise it) to approve a shorter term, or to cancel work status if they wish (as they did with several Brazilian auto workers not very long ago).

Visas are to facilitate entry for a specific purpose only. That's it. Governments can change their minds about stay permission and often do, so you're always governed by the _latest_ term approval. It doesn't matter what your visa said, it's gone. Your residence card (or passport stamp) -- whatever is most recent -- controls absolutely.

I'm pretty sure my first visa was marked for 5 years. When I arrived, I was approved for a stay of up to 2 years as I recall, and that's what my residence card and re-entry permit said. It didn't matter that my visa said 5 -- that was gone, done, used, and in the past. The government initially thought "up to 5," and then they settled on 2 when I arrived. So 2 it was, not 5.

It's not just Japan I'm describing. It's every country. For example, the U.S. has B1 and B2 visas. Some citizenships qualify for 6 month B1/B2 visas. That's great, but U.S. Customs and Border Protection can stamp your passport with shorter stay permission, and CBP often does. And that's your approved stay permission, not 6 months. If the government then comes back and says "get out," you have to get out. Your stamp then doesn't matter -- they changed their minds, as they're entitled to do.

But none of THAT matters to answer the question asked. To open a bank account in Japan, you need a (valid, unexpired) residence card and your ID (passport).


----------



## Raffish_Chapish

and a phone number most likely....

Wow - you know you're visa's pal! No doubt!


----------



## larabell

A couple of clarifications come to mind.

First, multiple-entry visas do exist and such a visa is hardly "burned" after the first entry. However, it becomes mostly irrelevant once you enter, up until such time as you "officially leave" Japan -- which may or may not be the same as physically leaving.

Second, the visa term does matter because, in almost all cases, the initial term of one's status of residence is derived from the visa term since, presumably, the people who made that determination for one's visa application probably had more information to hand than the guy at the airport. While it's true that the guy at the airport can change that term (shorter, not longer), in practice they almost never do.

Of course, neither of those are relevant to the original question... some of us are just showing off .

Working visas are almost always one or five years these days. It would be interesting to know what kind of visa the OP has that carries a six-month term. That's relevant because certain visas (like temporary visitor visas) do not qualify for a resident card. No resident card, no bank account. The visa type matters more than the term.

Finally, while this is just barely relevant, many cell phone providers won't accept a contract if one's status of residence is close to expiring. What "close" means may depend on the provider (I believe DoCoMo was six months when I last applied but that was over a decade ago). Some banks may well have a similar rule as far as opening accounts. If so, it might pay to shop around. How long you plan to stay is irrelevant but how long you are allowed to stay is very relevant to some businesses.


----------

