Last year we discovered Transferwise and did a big write-up on the site. That post is the most-commented on so far on the blog, and there is a wealth of information in the comments alone. Well worth a read if you need to send money from Japan to other countries.

The consensus from the feedback I have had so far is that for most people Transferwise is the best option for moving money abroad. If you are sending large amounts or need the funds to arrive quickly GoRemit might be a better fit.

I've been using Transferwise since we wrote about it, and so far I still love the service. I have sent money to myself in the UK, to my daughter in Singapore, and to my brother in Sweden.

Each time setting up a new beneficiary and doing the transfer took just a couple of minutes online and the funds arrived within a day or two (to Singapore was same day).

I had one small hiccup when I made the first transfer to Singapore, as Transferwise needed my My Number in order to comply with Japanese regulations. I had set up my account before that law came into effect, so that caused a delay for a few days as they requested the documents, I submitted them, and they confirmed them.

Normally they take care of this when you sign up, so anyone opening a new account won't have that problem. If you have an older account that you haven't used for a while it might be worth checking to see if all your info is up to date.

So why am I such a big fan?

1. The website is in English, it's simple and easy to use, and everything can be done online easily.
2. The fee is low and the exchange rate is as good as you are going to get (they use the interbank rate).
3. Setting up new beneficiaries can be done online in minutes, and the site remembers information from previous transfers so sending money to the same person takes seconds to set up.

Any drawbacks?

1. You can use a debit or credit card to fund some transfers (for a fee) but the cheapest option is to send money from your bank to Transferwise's account in Japan. This could take time and cost money, depending on your bank.
2. Er, that's about it. 

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Right now I think Transferwise is the best option to send money abroad from Japan. If you are still using the Post Office or your bank, I really recommend you check it out. You won't regret it :)

How about you? How do you send money abroad? Any experiences with Transferwise?

We're starting a new series today, looking at various aspects to consider when making an investment plan.

I've received a lot of questions recently about how to start investing, and it can seem pretty overwhelming at first, so over the next few weeks we'll go through various aspects of making an investment plan.

Today we'll be looking at geography.

And basically it boils down to the question: are you planning to retire in Japan?

If so then I recommend you either get permanent residency (you can apply after 10 years living here, or after three years of marriage to a Japanese citizen) or naturalize (five years living here). Not having one of these puts you in a vulnerable position (you could lose your visa and have to leave). There are no downsides to having permanent residency. As soon as you become eligible you should apply. If you naturalize you will need to renounce your current citizenship. This is of course a huge decision.

If you are not planning to retire in Japan it may make sense for you to keep some of your investments abroad -this is because most financial institutions in Japan will ask you to close your accounts if you leave.

There are a few options: Interactive Brokers, banks in Singapore or Hong Kong, or providers in your 'home' country if you have access to them.

The exception would be tax-advantaged accounts like iDeCo and (to a lesser extent) NISA. It may make sense for you to use these even if you are planning to leave Japan.

If you are not sure, but plan to be here for a while, a combination of the two (investing in Japan and abroad) may be a good way to hedge your bets.

If you are resident in Japan for tax purposes, you must declare all worldwide income to the tax office.

[EDIT: this following section is partially false. Both instructing dividends to be reinvested and buying accumulation funds do not get you out of paying tax on the dividends. See Stockbeard's comment below]

​The easiest way to avoid headaches here is to invest in things that do not produce dividends or interest in overseas accounts, and refrain from selling them. Some examples would be shares that don't pay dividends [FALSE]or mutual funds/ETFs that reinvest dividends.[/FALSE] As they are not producing any income, you neither have to declare them nor pay Japanese tax on them while they grow.

If you have more than 50 million yen's worth of overseas assets you must declare this to the tax office, regardless of whether you owe tax on it or not. Failure to do so is a crime with both penal and monetary sanctions.

If you have more than 100 million yen's worth of worldwide assets excluding property when you leave Japan, you may be liable for the exit tax.

The other thing that we need to consider is currencies and exchange rates.

If you are planning to retire in Japan, you don't really need to think about exchange rates too much (apart from if you plan to take lots of overseas trips). You are presumably earning in yen, you can invest in yen, and in the future you will need yen to spend.

If you are planning to leave Japan, it's a bit more complex. If you know that you will be moving to Canada next, then you may wish to keep a certain amount of your investments in Canadian dollars. This is to avoid the unpleasant possibility of the yen crashing just before you transfer all your yen to Canada as you move.

Of course the opposite may also happen, i.e. the yen gets really strong just before you move. You can't predict which will happen, so it is prudent to make sure you have enough dollars to meet your needs, regardless of what happens with the exchange rate.

If you're not sure where you will end up, a mix of currencies might be a good strategy. For example, I have pounds, dollars, and yen in my portfolio.

Now that we (hopefully) have geography down, we can look at risk next week.

What are your thoughts on geography and investing?

Anyone wanting to transfer money abroad has run into the expense and hassle of traditional transfer methods.

It's time-consuming.
It's expensive.
The exchange rates are terrible.
The paperwork is annoying.
The people in the bank don't know how to do the transfer.
You forgot to bring <random document> with you.
It takes ages to transfer the money.

Sound familiar? Well, in that case a service called TransferWise might be of interest.

It's designed to avoid the fees and inflated exchange rates that plague other international money transfers.

How it works is you make a domestic transfer to the TransferWise account in Japan, and they make a domestic transfer to the account abroad you are sending money to from their account in that country. It's quick, cheap, and most of all painless once you have registered.

Registration is easy, you go to their website, type in your information, upload a photo of your ID (drivers license or zairyu card) front and back, and your My Number card, paper card, or jyuuminhyou, and wait for them to check the details. Took me about five minutes to complete the process, and about six hours for them to confirm my ID.

You can even use your Google, Facebook, or Paypal account to log in.

Once you are registered to the system you can easily make transfers online to 38 countries. Best of all, sending money to a new account doesn't take hours of paperwork...

I sent 100,000 yen to my account in the UK, and it arrived safely a couple of business days later.

This is by far the best way of doing international money transfers that I have seen. Big shout out to Good and Bad Japan for bringing it to my attention.


Edit: The GoRemit service (confusingly, also run by Shinsei) seems to be the second best in terms of exchange rate, ease of use, and fees. It appears to be slightly worse than TransferWise in terms of costs (fixed fee instead of 1% makes it better for larger amounts, but the worse exchange rate and possible fees from receiving banks edges it out).

The next best option in my opinion is Japan Post's system, but it is a poor second. The fee is higher, the exchange rate worse, you have to go to the branch and fill out paperwork, and you need the international transfer information (IBAN, BIC, etc.) which is sometimes difficult to get.

Shinsei Bank's international money transfer is mostly worse (higher fee of 4,000 yen unless you are a Platinum custumer) but you can register each destination account individually (which takes an hour or so at the branch in my experience) and then make transfers by telephone.

Sign up with TransferWise and let me know what you think of the service.

Any other good ways to transfer money?

A friend of mine keeps obsessing about exchange rates, and how they impact his portfolio. At first I didn't really pay attention to him, but he's right.

Even if you are not playing in the forex sandpit (I'm not), as long as you have assets denominated in foreign currencies you will have to deal with the consequences of exchange rate movements.

There are three main factors:

• the currency you earn in
• the currency you save/invest in
• the currency you will need in the future

If all three of them are the same currency then congratulations, you don't have any currency risk and can stop reading this post. Enjoy the rest of your day ;)

Still with us?

​Let's look at me. I earn money in yen, invest in yen and dollars/pounds, and will probably need yen in the future (I think there is a good chance I will stay here in Japan).

In my case there is a further complication in that I like to take trips abroad and may decide I want to live somewhere else in the future. This means that I will need both yen (for my life in Japan) and other currencies (for my trips abroad and if I decide to move to a different country).

The yen is very strong right now. The pound is weak, and uncertainty about a possible UK exit from the EU is making it weaker still.

I believe the yen will be weaker in the future, and the pound stronger. Because of this it might make sense for me to save/invest in pounds right now.

For me the currency situation is as follows:

The last few years have seen the yen strengthen, so it has felt like our saving and investing has been for nothing. I think this will turn around, but even if it doesn't it isn't the end of the world as our income is enough to support us.

Investing in other currencies protects us from the 'bad scenario' of wanting to leave Japan and not having enough money (with a weak yen) to do so. For me, that particular scenario is worse than the other bad scenario of living in Japan with less purchasing power from investments.

What do you think? Do you have a plan do deal with currency fluctuations? What do you think will happen in the future?
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