foreign direct investment -...

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1. FDI Related Law

2. Types of Foreign Direct Investment

3. Establishing a Business in Seoul

4. Land Acquisition by Foreigners

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Foreign Investment Promotion Act (FIPA)

The Foreign Investment Promotion Act (FIPA) isthe basic law governing the grant of incentives toforeign investors. The Foreign InvestmentPromotion Act was promulgated in order topromote foreign investment by supporting andproviding accommodation for foreign investors.The FIPA delegates certain items to itsEnforcement Decree and Enforcement Regulationsand the Regulation of Foreign Investment andTechnology Importation.

The Foreign Exchange Transactions Act (FETA)governs foreign exchange transactions related toforeign investment, and the Special Tax TreatmentControl Act, its Enforcement Decree andEnforcement Regulations and the Regulation onTax Exemptions or Reductions for ForeignInvestment provide for exemptions and reductionsof applicable taxes related to foreign investment.

Definition of Terms Relating toForeign Direct Investment

FFoorreeiiggnneerrssAn individual with foreign citizenship, a companyestablished under the laws of a foreign country(hereinafter referred to as a "foreign corporation"),or an international economic cooperationorganization. International economic cooperationorganizations include: (a) Organizations carrying out international

economic cooperation activities as an agent ofa relevant foreign government;

(b) International development financingorganizations such as the International Bank for

3. Foreign Direct Investment

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11.. FFDDII RReellaatteedd LLaaww

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Re-construction and Development (IBRD),International Finance Corporation (IFC) andAsian Development Bank (ADB);

(c) International organizations engaged in foreigninvestment either as a concerned party or as anagent.

FFoorreeiiggnn IInnvveessttmmeenntt "Foreign investment" consists mainly of two types:(i) purchase of shares or equity in a Koreancompany; and (ii) grant of a long-term loan to aKorean company.

- Purchase of shares or equity in a Koreancompany

The ownership of shares or equity in a Koreancompany for the purpose of establishing acontinuous economic relationship with thecompany, by participating in the management ofthe company and through other means.Specifically, in order to qualify as “foreigninvestment” under the FIPA, the amount of theinvestment by each foreigner must be KRW 50million or more and the foreigner must own 10%or more of the voting shares or equity in theKorean company. Even if the foreigner does notown 10% or more of the voting shares or equity inthe Korean company, the investment by theforeigner will be considered “foreign investment”under the FIPA, if the foreigner enters into one ofthe following types of contracts with the Koreancompany: (a) A contract that allows the foreigner to dispatch

or elect officers (i.e., directors, representativedirectors, general partners, auditors or personsin similar positions that have the right toparticipate in important business decision-making processes;

(b) A contract with a term of one year or more for thedelivery or purchase of raw materials or products;

(c) A contract for the supply or introduction oftechnology or for joint technology research anddevelopment project.

- A “long-term loan”A loan with a maturity of five years or more, madeto a foreign-invested company by its foreign parentcompany or by a company that has a capitalaffiliation with the parent company in the followingmanner: (a) A company that owns 50 percent or more of

the total shares or equity of the foreign parentcompany;

(b) A company, whose foreign parent companyowns 50 percent or more of the total shares orequity of the foreign-invested company, (i)which owns 10 percent or more of the totalshares or equity of the foreign parentcompany, or (ii) 50 percent or more of thetotal shares or equity of which are owned bythe foreign parent company or a company thatowns 50 percent or more of the total shares orequity of the foreign parent company.

FFoorreeiiggnn IInnvveessttoorrssForeigners who own shares or equity inaccordance with the FIPA.

FFoorreeiiggnn--IInnvveesstteedd CCoommppaannyyA company in which foreign investors haveinvested in accordance with the Foreign InvestmentPromotion Act.

OOppeerraattoorrss ooff FFaacciilliittiieess tthhaatt EEnnhhaannccee tthhee FFoorreeiiggnnIInnvveessttmmeenntt EEnnvviirroonnmmeennttAn operator running facilities to provide animproved environment for foreign investors suchas schools, hospitals, clinics, pharmacies andresidential buildings.

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IInnvveessttmmeenntt CCoonnttrriibbuuttiioonnssItems that foreign investors contribute as consideration for the acquisition of shares pursuant to the FIPA.The following table classifies investment contributions recognized under the FIPA.

Protection and Liberalization of Foreign Investment

PPrrootteeccttiioonn ooff FFoorreeiiggnn IInnvveessttmmeennttThe Korean government extends a greater level of protection for foreign investment than for portfolioinvestment in stocks and bonds. With respect to the proceeds of foreign investment, the Foreign Investment Promotion Act guaranteesremittance by foreign investors to foreign countries in accordance with the contents of the relevant contractfor foreign investment or for the introduction of technology.

Also, except as otherwise provided in the relevant laws and regulations of Korea, foreign investors andforeign-invested companies are treated equally as Korean citizens or Korean companies with respect totheir business operations. Rules and regulations on tax reductions and exemptions that apply to Korean citizens and Koreancompanies also apply equally to foreign investors and foreign-invested companies, except as otherwiseprovided in the relevant laws and regulations.

Investment Contributions

•International means of payment under the Foreign ExchangeTransactions Act, or domestic means of payment arising from theexchange thereof (i.e., foreign currency); •Capital goods:- Machinery, equipment, facilities, apparatus, components, and partstreated as industrial facilities including ships, motor vehicles,airplanes, etc.; livestock, seeds, plants, trees, fish and shellfishnecessary for the development of agriculture, forestry and fisheries;

- Raw materials and spare parts for the test operation of facilitiesdeemed necessary by the competent ministers; freight andinsurance premium costs for the transportation of such materials;technology utilized in the installation of related facilities; or servicesengaging in consultation with respect to the import of suchmaterials.•Income generated from stocks or equity acquired pursuant to

FIPA (dividends)•Industrial property/intellectual property rights and other

equivalent rights dealing with technology and the use thereof:- Intellectual property rights: Rights utilized for industrial activities

among the copyrights under the Copyright Act and layout designrights in Article 2.5 of the Layout Designs of the SemiconductorIntegrated Circuit Act.

•Remaining assets generated from the liquidation of a foreigncompany’s branch or liaison office located in Korea;•Repayment of long-term loans with maturity of five years or

longer, pursuant to FIPA, to FDI companies by their overseasparent companies and to companies affiliated with the respectiveoverseas parent companies;•Stocks of a foreign company listed on a foreign stock exchange

market;•Stocks owned by foreign nationals pursuant to the Foreign

Exchange Transactions Act;•Real estate in Korea owned by foreign nationals; Other domestic

means of payment: Sales proceeds from the disposition of realestate and stocks of a Korean company owned by foreignnationals pursuant to FIPA and the Foreign Exchange TransactionsAct.

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LLiibbeerraalliizzaattiioonn ooff FFoorreeiiggnn IInnvveessttmmeennttExcept as otherwise provided in the relevant laws and regulations of Korea, foreigners may engage in,without restraint, various investment activities in Korea.

The business categories which prohibit foreign investment are not the areas where foreign investment isprohibited, but the categories for which it is difficult to apply the FIPA.

In the cases where foreign investment is restricted, the Korean government enforces such restrictions mostlyby placing limits on the percentage of voting shares that can be purchased by foreigners.

Foreigners cannot invest in companies that are engaged in both businesses where foreign investment isprohibited and partially permitted. In the case where a foreigner intends to invest in a company that isengaged in more than two businesses where foreign investment is partially permitted, the foreigner cannotinvest in excess of the investment ratio prescribed for the business with the lowest ratio for permittedforeign investment.

However, a foreigner can invest in a company engaged in a foreign-investment restricted business if thesales of the restricted business are less than one percent of its total sales. However, if the company’s salesfrom the restricted business generates more than one percent of its total sales after the foreigner purchasesthe shares, the foreigner must transfer the shares in the company to a Korean citizen or a Korean companywithin six months of the settlement of its account; provided, however, that the transfer can be postponedup to an additional six months after obtaining permission from the Ministry of Knowledge Economy(MKE).

- Income from acquired shares or equity, etc.- Proceeds from sale of shares or equity, etc.- Principal, interest and fees paid according to a loanagreement

- Consideration paid under a technologyintroduction agreement.

Guarantee of Remittance for Foreign Investors

- Postal services, central bank, individual-businessessmutual aids, pensions, stocks and future exchange,other financial market management sectors,clearing houses

- Legislative, administrative, judiciary, foreigndiplomatic missions to Korea, and otherinternational and foreign organizations

- Research and development of economics, otherresearch and development in humanities and social

sciences- Educational organizations (infant school,elementary school to university, special educationalinstitutions)

- Artists, religious organizations, organizations ofindustries, industry experts, environmentalmovements, politics, labor movements etc.

Business Categories where Foreign Investment is Prohibited


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[FDI-Restricted Businesses]

Restricted Business Categories Criteria for Approval of Foreign Investment

Business Sector (IK* Code) Criteria for Permission

Cereal crop cultivation (01110) Allowed except for the cultivation of rice and barley

Beef cattle farming (01212) FDI ratio less than 50%;

Inshore fishing (05112) FDI ratio less than 50%

Coastal fishing (05113) FDI ratio less than 50%

Newspaper publishing (22121) FDI ratio less than 30%

Magazine and periodical publishing (22122) FDI ratio less than 50%Allowed except for manufacturing and supply of nuclear fuel for nuclear power plantsFDI in electric power generation related to the operation of nuclear power plants is not allowed. Foreigners cannot purchase power generation facilities from Korea Electric Power Corporation (KEPCO) or more than 30% of the total power generation facilities of the nation.

Allowed if all of the following conditions are met: - FDI ratio less than 50%.- The number of voting shares owned by foreign investors must

be lower than that of the largest Korean shareholder.Other transmission & distribution of electric power (40122)

Wholesale of meat (51312) FDI ratio less than 50%

Allowed if all of the following conditions are met:1. Scope of permission: transportation between North and South Korea;2. Must be joint ventures with domestic shipping companies;3. FDI ratio less than 50%.

Coastal water freight transportation (61122) Same as above;

Scheduled air transport (62100) FDI ratio less than 50%;

Non-scheduled air transport (62200) FDI ratio less than 50%;FDI in core telecommunication businesses is subject to domestic law: Foreign governments, foreign nationals and Korean corporations* may own 49% or less of the total number of stocks or equity with voting rights. However, a foreign investor in Korea Telecom can be a majority owner only when the FDI ratio is 5 % or less.

Wired telephone and other wired telecommunications (64219)

Same as above

Coastal water passenger transport (61121)

Leased line services (64211)

Electric power transmission (40121)

Electric power generation (40110)

Nuclear fuel processing (23300)

Same as above

▼

Mobile telephone services (64221) Same as above

Cellular telephone services (64229) Same as above

Other unclassified telecommunications (64299) Same as above

Domestic commercial banking (65121) Allowed only for commercial banks

Radio broadcasting (87211) NOT PERMITTED

Television broadcasting (87212) NOT PERMITTED

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Foreign Investment Zone (FIZ)

The system of Foreign-investment Zones (FIZ) relates to areas designated by a mayor or a governor settingaside specific zones where foreign investors can locate and conduct their businesses and be provided withvarious incentives including special tax exemptions or reductions. These FIZs are designed to induce large-scale foreign investments.

DDeessiiggnnaattiioonn aanndd DDeevveellooppmmeenntt ooff FFIIZZEach mayor and governor may designate a certain area of a National Industrial Complex or a ProvincialIndustrial Complex, for the purpose of leasing or transferring exclusively to foreign investors (the “ForeignCompany Exclusive Zone”), as a FIZ upon consultation with the Foreign Investment Committee.

Also, if necessary for promoting foreign investments meeting specific criteria, each mayor or governmentmay designate a certain area which is sought for investment by foreign investors (the‘Foreign CompanyHope Zone’) as a FIZ upon consultation with the Foreign Investment Committee, and in such case, thecriteria should be met within five years after the designation.

In the case where constructing a new site is necessary to build a plant, etc., in a Foreign-Investment Zone, itcan be developed as a Provincial Industrial Complex, which requires a development plan.

Restricted business categories Criteria for Approval for Foreign Investment- FDI ratio of 49% or less- FDI in businesses supplying news programs not allowed- FDI ratio in comprehensive cable broadcasting business of

50% or less- FDI in relay cable broadcasting businesses not allowed

Satellite broadcasting (87223) FDI ratio of 33% or less

News agency activities (88100) FDI ratio of less than 25%Allowed excluding those nuclear waste management businesses pursuant to Article 82 of the Electrical ConstructionBusiness Act

* Korea Standard Industrial Classification (KSIC) / Last updated on Oct. 16, 2006

Note 1) FDI in the businesses listed in the table permitted if the criteria for permission are satisfied

2) FDI-allowed businesses: 1,058 sectors (as of May 2005)

- Fully open: 1,030 sectors

- Partially open: 26 sectors (FDI allowed if the criteria for FDI permission are satisfied)

- Closed: Two sectors (Radio and television broadcasting)

3) FDI-restricted businesses (including partially open sectors): 28 sectors

Cable and other program distribution (87222)

Radioactive waste disposal (90230)

Cable networks (87221)


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SSuuppppoorrtt ffoorr FFoorreeiiggnn IInnvveessttmmeenntt ZZoonneessThe Korean government supports foreign-invested companies operating in FIZs with tax reductions or exemptions andprivileges such as construction costs and basic facility support and exemption of the traffic generation charge.

[Types and Designation of Foreign Investment Zones]

Criteria for Business Categories Criteria for DesignationIndustry - CriteriaNew - Immediate occupation is possible

- A clear need for foreign-invested companies to move in is given Expansion of existing zones - Contract of over 3/4 of the designated zone area

- Immediate occupation is possible in the zone subject to expansion- A clear need for foreign-invested companies to move in is given

Criteria for Business Categories Criteria for DesignationIndustry CriteriaManufacturing <More than US$30 million>Manufacturing or industry-supporting business.

Installing a new factory to conduct high-tech businessTourism <More than US$20 million>Tourist hotels, floating tourist hotels, recreation

businesses and amusement facilities, international conference facilitiesLogistics & SOC <More than US$10 million>Combined freight forwarding businesses, joint

collection and delivery centers, logistics businesses and facility establishment businesses, SOC led by private investment, port facilities, logistics in ports and airports

R&D <More than US$5 million>Installation of a new R&D facility with at least tenfull-time researchers with Master's degrees or higher related to the projectwith at least 3 years of research experience

[Support for Foreign-Invested Companies in FIZ]

Criteria Individual FIZ FIZ Complex

((11)) TTyyppee 11:: FFIIZZ CCoommpplleexx For lease or transfer of national and local industrial complexes exclusively to foreign-invested companies

((22)) TTyyppee 22:: IInnddiivviidduuaall FFIIZZ Foreign investment meeting the given requirements

※In the case of a foreign corporation whose stocks or equity share are directly or indirectly owned by Koreannationals or companies, the portion corresponding to the owning rate shall not be counted as part of the foreigninvestment.

Reduction of Rent -100%: Business within the region - 100%:High-technology supported business of more than 1million US$

-75%: Manufacturing business of more than 5 million US$- Investment Amount

Exemption from Tax

- Manufacturing: <30mil. US$ - Tourism: <20mil. US$- Distribution: <10mil. US$ - Research Facilities: <5mil. US$

- Manufacturing: <10mil. US$- Distribution: <5mil. US$

▼

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The government will provide support in designatedFIZs in the form of infra-facilities such as harbors,roads, water facilities, railroads, communicationsand electrical power and 100 percent rent-freenational properties. Foreign investors will also beexempt from traffic the generation fee caused bynecessary construction work. At the same time, allrelevant restrictions on the foreign-investedcompanies’ exports and imports will be alleviated.

Ongoing Administration of Foreign Investment

RReeggiissttrraattiioonn ooff FFoorreeiiggnn--IInnvveesstteedd CCoommppaanniieessIf a foreign investor has paid in full its requiredcapital contribution, has acquired outstandingshares, or has converted, subscribed to, orexchanged any convertible bonds, exchangeablebonds, depository receipts or any other similarsecurities into or for equity securities, then suchforeign investor or foreign-invested company mustfile for foreign-invested company registration within30 days of such an event.In addition, if a foreign investor that did not file thenecessary foreign-invested company registrationreceived an order for such registration and failed tofile the registration within the prescribed period,such foreign investor must dispose of the shares inthe foreign-invested company to a Korean citizenor company within six months of the expiration ofsuch prescribed period. In the event of unavoidablecircumstances, the foreign investor may obtain theapproval of the MKE for an extension of up to sixmonths. In the event of a report pursuant to acquisition ofequity shares from a merger or otherwise, uponcompletion of the transfer or reduction of equity

securities, or in the case of a change of businessname, investment amount or business objectives,the foreign investor or foreign-invested companymust modify its foreign-invested companyregistration within 30 days of the relevant event.

RReessttrriiccttiioonnss oonn DDiissppoossaall ooff CCaappiittaall GGooooddssA foreign investor or a foreign-invested companymust file a report with the Ministry of KnowledgeEconomy in advance if it intends to transfer, lease,or use for any other purposes than as notified anycapital goods imported under customs exemptionswithin five years of the date of import notification.

CCoonndduucctt ooff OOtthheerr BBuussiinneessss bbyy FFoorreeiiggnn--IInnvveesstteeddCCoommppaanniieessAny registered foreign-invested company must notengage in any category of business in restrictedareas of foreign investment beyond the extentpermitted (unless the foreign investment ratio isless than 10 percent).A foreign-invested company is also prohibited fromacquiring, beyond the extent permitted, equitysecurities in another domestic company that isengaged in any categories of business with respectto which foreign investment is restricted; provided,however, that such prohibition does not apply if: (a) The foreign investment ratio of a foreign-

invested company is less than 50 percent andthe largest shareholder of the foreign-investedcompany is not a foreign investor (includingany affiliates);

(b) A foreign-invested company engaged infinancial or insurance business whose businessobjectives include acquisition of equitysecurities in other companies acquires equitysecurities in other companies in accordancewith the provisions of other laws; or

[Support for Foreign-Invested Companies in FIZ]

Criteria Individual FIZ FIZ Complex

- Exempted from obtaining approval to subdivide land in an urban area - Exemption of a company from the obligation to give priority to people with distinguished services to

the state

Exemption from Tax

- National tax (corporate, income tax)- Local tax (acquisition, registration,

property, comprehensive land tax)

- National tax (corporate, income tax)- Local tax (acquisition, registration, property, comprehensive land tax)

- 100% for the initial 5 years, 50% forthe following 2 years (local tax canbe extended up to 15 years)

- 100% for the initial 3 years, 50% for the following 2 years(local tax can be extended up to 15 years)

Period of Exemption

Subject to Exemption

Exclusion fromother laws


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(c) The acquired equity securities by a foreign-invested company are not more than 10percent of the aggregate number of the issuedand outstanding shares or the aggregate equityinvestment.

Furthermore, a foreign investor or a foreign-invested company must not use the capitalcontributions for any purpose other than what wasnotified or permitted.

NNoottiiffiiccaattiioonn ooff SShhaarree TTrraannssffeerr aanndd CCaappiittaallRReedduuccttiioonnA foreign investor must file a notification with theMKE within 30 days of the execution of a sharetransfer agreement if it transfers the acquired sharesto another person or within 30 days of the expirationof the notice period for creditors if it intends to effecta capital reduction related to the shares held.If the approval or registration for a foreign investoris revoked or cancelled, such foreign investor musttransfer the equity securities held by itself to aKorean citizen or company within six months ofsuch revocation or cancellation. But in the event ofunavoidable circumstances, the foreign investormay request the approval of MKE for an extensionof up to six months on the required transfer.

22.. TTyyppeess ooff FFoorreeiiggnn DDiirreeccttIInnvveessttmmeenntt

The procedures for establishment of a foreign-invested company largely consist of foreigninvestment notification, company registration, andforeign-invested company registration. Thecertificate to be issued attesting to foreign-invested

company registration is used as an attachmentwhen filing for overseas remittance of investmentproceeds, extended-stay visas (D-8), etc.

Foreign investment may be made in any of thefollowing forms: (a) Acquisition of newly-issued shares, (b) Acquisition of issued and outstanding shares,

and merger or consolidation, and(c) Long-term loan transactions. Each type of investment entails a different set ofprocedures.

Acquisition of New Shares

Any foreigner who intends to undertake a foreigninvestment by acquisition of shares newly-issued bya Korean company (including those going throughincorporation procedures) must file a notification inadvance with any branch of a foreign exchangebank, a designated foreign bank, or Invest KOREA.Acquisition of newly-issued shares can be in theform of:(a) Establishment of a new corporation; or(b) Participation in the capital increase of an

existing domestic company or a foreign-invested company.

The notifying party may be either the foreigninvestor himself or any other person having apower of attorney. The documents to be submittedare a foreign investment notification by acquisitionof new shares as well as a certificate of nationalityof the foreign investor and any other documentsrelated to the investment in kind, if applicable. Ifthe notifying party is another person acting for andon behalf of the investor, a power of attorney isrequired as well. These notifying procedures must be complied withif there are any changes in the previous notifyingstatement, i.e. the corporate name, nationality ofthe foreign investor, the amount of the foreigninvestment, foreign investment ratio (thepercentage of the shares to be owned by foreigninvestors), means of investment, businessobjectives, share transferor, the person extendingthe loan, the amount of the loan, and the termsand conditions of the loan. The modification mustbe filed with the previously notified agency.

[Procedures Applicable to All Lines of Business except Manufacturing Industry]

InvestKOREA/

designatedforeign

exchangebank

Foreigninvestmentnotification

▶Designated

foreignexchange

bank/ Invest KOREA

Verificationof payment

of theinvestment in cash or

kind▶

Court/Invest KOREA

Registrationof

incorporationand businessregistration

▶Invest

KOREA/designated

foreignexchange

bank

Foreign-investedcompany

registration

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Acquisition of Issued and Outstanding Shares

Any foreigner who intends to undertake a foreign investment by the acquisition of outstanding sharesissued by a Korean company must file a notification in advance with any branch of a foreign exchangebank, a designated foreign bank, or Invest KOREA. Any foreigner who intends to undertake a foreigninvestment by the acquisition of outstanding shares issued by a corporation operating in the defense-industry business must obtain the approval of the MKE in advance. As in the case of new shares, thenotifying or approval procedures must be complied with if there are any changes in previously notified orapproved statements, i.e. the amount of the foreign investment, foreign investment ratio, and other details.

Acquisition of Shares by Merger or Consolidation

Any foreigner who undertakes a foreign investment by the acquisition of shares by merger or consolidationmust file a notification with any branch of a foreign exchange bank or a designated foreign bank, or InvestKOREA. In contrast to an acquisition of newly-issued or issued and outstanding shares, which requiresnotification prior to acquisition, an acquisition of shares by merger or consolidation requires the notificationto be filed within 30 days after the acquisition. The requirements for the notification, however, are notsignificantly different from those under the acquisition of existing shares.

Foreign Investment through Long-term Loan

If a loan with a maturity of five years or more is extended to a foreign-invested company by its foreignparent company or by a company having an affiliation with the said foreign parent company throughcapital investment meeting certain conditions, then the foreign investor must file a notification in advancewith any branch of a foreign exchange bank, a designated foreign bank, or Invest KOREA. Therequirements are identical to those applicable to share acquisitions, but additionally require the loan-relateddocuments, such as the loan agreements and other related documents. Any modification to the amount orterms and conditions of the loan requires a notification of modification.

- Acquisition of any shares issued due to capitaltransfer of any reserve, revaluation reserve, or anyother surpluses of the foreign-invested companyunder the provisions of any law

- Merger or consolidation of the foreign-investedcompany with or into any other company, mergeror consolidation through the shares owned at thetime of any share swap, any transfer of shares orcompany-split, or acquisition of the shares in acorporation surviving or consolidated after suchshare swap, transfer of shares or company-split

- Acquisition by purchase, inheritance, bequest or giftof shares in a registered foreign-invested companyfrom a foreign investor

- Acquisition of shares by investing the proceedsfrom the shares under conditions prescribed by law

- Conversion of, subscription to or exchange of anyconvertible bonds, exchangeable bonds, depositaryreceipts or any other convertible, subscribable orexchangeable bonds or securities into or for equitysecurities

Mergers or Consolidations Requiring Notification


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33.. EEssttaabblliisshhiinngg aa BBuussiinneessss iinn SSeeoouull

Establishment of Business Entity

A foreigner may establish a domestic business entity in any of the following four ways: throughestablishment of a company or a sole proprietorship, to either of which the Foreign Investment PromotionAct (FIPA) is applicable, or through establishment of a branch office or a liaison office under the proceduresas set forth in the Foreign Exchange Transactions Act (FETA). But a foreign corporation may not itselfregister as a domestic business.

CCoommppaannyy The provisions of the Foreign Investment Promotion Act and the Commercial Code are applicable toforeign investment through establishment of a company by a foreigner or a foreign company. A companyestablished by a foreigner or a foreign company is treated as equal to other domestic companies. In orderfor the Foreign Investment Promotion Act to be applicable to a domestic company established by aforeigner or a foreign company, the foreign investment must be KRW 50 million or more.

SSoollee PPrroopprriieettoorrsshhiipp If a foreigner makes an investment of KRW 50 million or more, in the form of a sole proprietorship, theinvestment is recognized as a foreign investment. As in the case of domestic companies, the ForeignInvestment Promotion Act will be applicable to investments through sole proprietorships. In contrast todomestic companies, sole proprietorships have the advantage of being less complex in terms of establishingand dissolving the business. But sole proprietorships can be disadvantaged in terms of having a lower creditrating with more difficulties in securing access to capital and high-quality labor.

[Establishment of Business Entity by Foreigners]

Representative

Business Entity

FIPA applicable

FETA applicableBranch Office

Company Corporation

Sole Proprietorship

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BBrraanncchh OOffffiiccee In order for a foreign company to conduct ordinary business activities in Korea, it must appoint arepresentative of a domestic branch, undertake procedures for establishment of a branch under the ForeignExchange Transactions Act, and register with the court. In addition, a branch is classified as a permanentestablishment of the foreign corporation for tax law purposes. So the income generated from the domesticbusiness activities of the branch will be subject to the same corporate tax rates applicable to domesticcompanies.

[Differences between a Sole Proprietor and a Company]Type Sole Proprietorship Corporation

- All profits taken by the sole proprietor - Easier financing

- Easier to establish - Complicated procedures for

incorporation

Characteristics - Faster decision-making procedures - Time-consuming decision-making

procedures

- Unlimited liability of the owner - Liability limited up to the invested capital

- Limited financing - Ownership and management separable

Adequacy Small businesses Medium and large businesses

Registration Not required Required

Capital Contributor Sole proprietor One promoter or more

[Differences between a Foreign-invested Company and Domestic Branch]

Type Foreign-invested Company Domestic Branch of Foreign Corporation

Governing Law Foreign Investment Promotion Act Foreign Exchange Transactions Act

Nature Domestic corporation Foreign corporation

The foreign investor and the foreign- The head office and the branch office

Legal Entity invested company are considered considered the same entity

separate entities (independent (for accounting and closing purposes)

accounting and closing)

Designated foreign exchange bank

Notification and Invest KOREA, or designated foreign (notification), The Ministry of Strategy

Permits exchange bank and Finance (MOSF) (financial business

license and other permits)

Minimum (maximum) Minimum: KRW 50 million per investmentN/A

Amount of Investment Maximum: N/A

All income generated within or Only the income generated within the

Taxability outside the country is taxable: at 13 country is taxable: at 13 percent

percent and 25 percent


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LLiiaaiissoonn ooffffiiccee The fundamental difference between a branch anda liaison office is that a liaison office may notconduct business activities. Accordingly, a liaisonoffice must obtain a serial number issued by therelevant tax office but is not required to registerwith the court.

Procedures to Establish a Company

The procedures for establishing a domesticcompany consist of three main steps: (a) Foreign investment report, (b) Registration as a company, and (c) Foreign-invested company registration. In comparison to the procedures required for aKorean citizen, the incorporation procedures areessentially the same except for the additionalrequirements related to an advance report offoreign investment and registration as a foreign-invested company.

FFoorreeiiggnn IInnvveessttmmeenntt NNoottiiffiiccaattiioonn The reporting party is either the foreign investorhimself/herself or any other person having a powerof attorney executed by the investor. The foreigninvestment report must be filed with a foreignexchange bank or Invest KOREA and is processedimmediately upon filing. The documents to besubmitted are: (i) the foreign investment report,and (ii) a certificate of nationality.

RReemmiittttaannccee ooff FFoorreeiiggnn CCaappiittaall CCoonnttrriibbuuttiioonnss Foreign capital contributions may be eitherremitted to a local bank account or brought inthrough customs procedures. If remitted, thecontributions are converted into local currencywithin Korea and deposited in a capitalcontribution account (or a securities marginaccount), against which the bank issues a certificateof capital contribution.

IInnccoorrppoorraattiioonn ooff CCoommppaannyy Please refer to the explanation in the “Proceduresfor Incorporation” section on page 71.

BBuussiinneessss RReeggiissttrraattiioonn Please refer to the explanation in the “BusinessRegistration” section on page 74.

TTrraannssffeerr ooff PPaaiidd--iinn CCaappiittaall ttoo CCoorrppoorraattiioonn''ssAAccccoouunntt Upon completion of the procedures forincorporation, court registration and businessregistration, the newly-incorporated company is alawful and valid entity, and the bank will transferthe paid-in capital contribution held in the custodyof the bank to the company’s bank account.

FFoorreeiiggnn--IInnvveesstteedd CCoommppaannyy RReeggiissttrraattiioonn A foreign-invested company must register with therelevant agency to which it made the foreigninvestment report within 30 days of the completionof the paid-in capital contribution. The documents tobe submitted include: (i) one copy of the applicationfor foreign-invested company registration, (ii) onecopy of the corporate registry extract, and (iii) onecopy of the certificate of foreign exchange purchasereceipt/deposit. The certificate of foreign-invested companyregistration is used as an attachment when filing foroverseas remittance of investment proceeds or anextended-stay visa (D-8).

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71

Procedures for Incorporation

It is more desirable to entrust a lawyer, a judicialscrivener or Invest KOREA with incorporationprocedures than to personally undertake the task.To utilize the services provided by Invest KOREA,however, the head office must be located in Seoul,and the presence of the representative director ofthe domestic corporation is required at the time offiling.

MMeetthhooddss ffoorr IInnccoorrppoorraattiioonn There are two methods for incorporation of thecompany: (i) by promotion and (ii) by publicoffering. Incorporation by promotion is thepromoters’ establishing a company by subscriptionfor all shares issued by the company at the time ofincorporation. Incorporation by public offeringinvolves the promoters’ subscription for part of theshares issued at the time of incorporation, with thepublic offering of the remaining shares.

PPrroocceedduurreess ffoorr EEssttaabblliisshhmmeenntt - Incorporation by Promotion Constitution of promoters→preparation andnotarization of articles of incorporation→decisionon the number and class of shares to be issued→share subscription by promoters→capital contribu-tion in cash or kind→appointment of directors andstatutory auditor→report on the progress ofincorporation by the directors and statutory auditor→convening the inaugural board of directorsmeeting and appointment of representativedirector→registration of incorporation→incor-poration notification and business registration

- Incorporation by Public Offering Constitution of promoters→preparation andnotarization of articles of incorporation→decisionon the number and class of shares to be issued→

share subscription by promoters→gathering ofshareholders→capital contribution→convening ofinaugural general shareholders’ meeting(appointment of directors and statutory auditor,report on progress of incorporation)→convening ofboard of directors meeting and appointment ofrepresentative director→registration of incor-poration→incorporation notification and businessregistration

RReeggiissttrraattiioonn ooff IInnccoorrppoorraattiioonn - Registration Period A company incorporated by promotion must beregistered within two weeks of the completion ofthe investigation of the progress of incorporation. Acompany incorporated by public offering must beregistered within two weeks of the last day of theinaugural general shareholders’ meeting.

- Pre-Registration Decisions Prior to registration, the company must review itspromoters and the viability of corporate names. Acompany requires one or more promoters whomust subscribe for the shares in writing andthereby become shareholders of the newly-incorporated company. If a corporate name chosenby such company is identical to or not clearlydifferentiated from another name registered byanother person within the same line of businessand within the same municipality, such a namemay not be registered. This can be verified in theSeoul municipality through the Supreme Court’swebsite (www.scourt.go.kr) under the “RegisteredBusiness Names” link, and at the relevantregistration office for other municipalities.

- Documents Required for Registration The list of documents required for registration is asfollows:


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72

The list of documents prepared by the investor in his/her own country depends on whether the investor isan individual or a corporation. The requirements also differ if the investor’s nationality is Japanese. In the caseof a corporate investor, the applicant must bring a copy of one’s resident registration certificate or the driver’slicense of the representative director, and seals of all shareholders and officers (including foreign citizens)listed in the documents. All powers of attorney must be notarized if given by foreign citizens (with theexception of Japanese citizens). The list of promoters is not required to be identical to that of the officers.

1. Acceptance of foreign investment report2. Power of attorney: ① If applied for by the representative

director: The representative directormust be the attorney with full powerof attorney.

② If applied for by a judicial scrivener:The scrivener must be the attorneyregardless of who the promoters orofficers are.

3. Acceptance of appointment of officer① Korean citizens: Each acceptance

must be sealed, to which a sealimpression certificate and a residentregistration certificate must beattached.

② Foreign citizens: Each acceptancemust be signed, to which an originalcopy of signature notarization and aphotocopy of the passport must beattached.

4. Certificate of capital contribution5. Common seal of the company6. Urban rail bond

7. Supreme Court revenue stamp8. Registration tax receipt: issued by the

ward office exercising jurisdiction overthe head office

9. Seal of each officer and promoter(including foreign citizens)

10. Articles of incorporation: notarized 11. Share subscription certificate12. Application for shares13. Organizational report14. Consent to shortening the notice

period for convening the inauguralshareholders’ meeting

15. Minutes of the inaugural share-holders’meeting: notarized

16. Minutes of the board of directors’meeting: notarized

17. Common seal notification andapplication for common seal card

18. Register of shareholders19. Consent to issuance of shares* The documents from 10~19 can be

prepared with the aid of Invest KOREA(82-2-3460-7550, www.investkorea.org)

Prepared by Applicant

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73

[Documents Prepared by Corporate Investors]

Given by investors, officers and any other persons listed in documents

Power of Attorney (1) - Korean/Japanese: sealed and with a seal impression certificate attached thereto

- Foreign national: signed and notarized

Prepared by all persons listed as officers

Acceptance of - Korean/Japanese: sealed and with a seal impression certificate and a resident

Appointment (1) registry extract attached thereto


Seal Impression

Certificate (2), Resident To be attached to the powers of attorney and acceptances of appointment

Registry Extract (1)

- Korean/Japanese corporation: with the common seal affixed,

Corporate Registryand a common seal impression certificate and

Extract, Power ofa corporate registry extract attached thereto

Attorney Given by the- Foreign corporation: notarized and given by the representative

Corporationdirector of the foreign investor corporation

to the representative director of the Korean corporation,

together with a corporate registry extract notarized and attached thereto

Photocopy of All foreign citizens

Passport (1)

[Documents Prepared by Individual Investors]

Given by investors, officers and any other persons listed in documents

Power of Attorney (1) - Korean/Japanese: sealed and with a seal impression certificate attached thereto


Prepared by all persons listed as officers

Acceptance of - Korean/Japanese: sealed and with a seal impression certificate and a resident

Appointment (1) registry extract attached thereto


Seal Impression

Certificate (2), Resident To be attached to the powers of attorney and acceptances of appointment

Registry Extract (1)

Photocopy of All foreign citizens

Passport (1)


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74

Incorporation Notification and Business Registration

IInnccoorrppoorraattiioonn NNoottiiffiiccaattiioonn aanndd BBuussiinneessss RReeggiissttrraattiioonn DDoonnee aatt tthhee SSaammee TTiimmeeIn general, the incorporation notification and business registration application can be filed at the same timeat the tax office having jurisdiction over the head office, or Invest KOREA. The business registration mustbe made within 20 days of the commencement of business, and the incorporation notification filed withintwo months of the registration of incorporation. The schedule of the required documents is as follows:

BBuussiinneessss RReeggiissttrraattiioonn ttoo BBee DDoonnee BBeeffoorreehhaanndd If a foreign investor makes his/her investment in-kind and thereby incorporates a company, businessregistration must be filed before the capital contribution in-kind is made because the business registrationcertificate is required for the VAT refund at the time of customs clearance for the in-kind contribution. Thedocuments to be submitted include the resident registry extracts of the promoters, copies of any leaseagreements, and a copy of the application for the business license (if applicable) or a business plan. Otherdocuments required for incorporation must also be filed after the incorporation as well.

[Registration Flowchart]

Foreign Investment

Notification

Capital Contributions Deposited

(Designated Foreign Exchange Bank)

Foreign Invested

Company RegistrationBusiness Registration

- Incorporation notification and business registrationapplication (available at Invest Korea and the taxoffice)

- Articles of incorporation (as well as thespecification of contributions in the case ofcontributions in kind)

- List of shareholders - Business license (if the line of business requires

license, approval or notification) - Copy of the lease agreement (if the place of

business is rented)※ If part of a building is rented, the applicable floor

plan must be attached (Only if the key money

deposit is equal to or less than KRW 240 millionin Seoul, KRW 190 million in the MetropolitanOverpopulation Control District, KRW 150million in other metropolises, or KRW 140million in any other area)

- Miscellaneous·Tax payment manager notification (unless there is

an employee to handle tax matters)·Copy of foreign exchange purchase receipt /

deposit certificate·Copy of foreign exchange purchase certificate·Copy of foreign citizen registration or passport

(if the representative director is a non-resident)

Schedule of Required Documents

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75

Sole Proprietorship Registration

FFoorreeiiggnn IInnvveessttmmeenntt NNoottiiffiiccaattiioonn The reporting party is either the foreign investor or any other person having a power of attorney executedby the investor (notarization not required). The report must be filed with a foreign exchange bank or InvestKOREA. The report is processed immediately upon filing.

RReemmiittttaannccee ooff CCaappiittaall CCoonnttrriibbuuttiioonnss No funds originating domestically may be remitted as a capital contribution to a foreign-invested company.In principle, a third party cannot make such remittance on behalf of the investor either. Against remittanceof the capital contribution, the bank will issue a certificate of foreign exchange purchase receipt or deposit,which is required for filing the business registration and foreign-invested company registration.

BBuussiinneessss RReeggiissttrraattiioonn In principle, the application must be filed by the applicant or any other person having a notarized power ofattorney. The filing must be made at the tax office with jurisdiction over the place of business or InvestKOREA within 20 days of the commencement of business. The required documents are as follows:

FFoorreeiiggnn--IInnvveesstteedd CCoommppaannyy RReeggiissttrraattiioonn The registration must be filed at the same agency where report of the foreign investment was made within30 days of the completion of the payment of the capital contribution. Required documents include anapplication for foreign-invested company registration, a business registration, and a certificate of foreignexchange purchase receipt/deposit.

- Business registration application (available at InvestKOREA or the tax office)

- Copy of business license (if the line of businessrequires a license, approval or notification)

- Copy of the lease agreement (if the place ofbusiness is rented)※ If part of a building is leased, an applicable floor

plan must be attached.(Only if the rental deposit is KRW 240 millionor less in Seoul, KRW 190 million in theMetropolitan Overpopulation Control District,KRW 150 million in other metropolises, orKRW 140 million in any other area)

- Miscellaneous·Tax payment manager notification (if the sole

proprietor stays outside the country for 6 monthsor more or is not ordinarily stationed at the placeof business)·Joint venture agreement, if applicable (notarized)·Copy of foreign investment notification·Copy of foreign exchange purchase receipt/

deposit certificate·Copy of foreign citizen registration or passport (if

the sole proprietor is a non-resident)

Required Documents


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76

Domestic Branch of Foreign Company

EEssttaabblliisshhmmeenntt NNoottiiffiiccaattiioonn - Principle ·Notification must be filed with designated foreign exchange bank.

- Notification of the following must be made to MOSF (by both a branch and liaison office); ·Extension of loans, overseas financial brokerage, credit card services, installment financing and other non-

banking financial services ·Services related to securities and/or insurance ·Any other services not allowed under the provisions of the Foreign Investment Promotion Act or any

other law ·Any other services deemed to adversely threaten public order and standards of decency

[Establishment Procedures]

◀

◀

◀

◀

◀

Application for Establishment

of Branch

Proceduresunder

Individual laws

Court Registration and BusinessRegistration Branch

Serial No. Issued: Tax Office

Deliberation by Relevant Government Agencies

Acceptance & Authorization of Branch Establishment Notilication

Designated Foreign

Exchange Bank

MOSF

Classification Activities

Branch OfficeEngaged in business activities that generate

income within the country

Conducts no business activities that generate income in the country but only liaison

work, market research, research and development, and any other non-business

activities. May conduct quality control, market research, advertising, and other

activities of preliminary and supplementary nature, but may not maintain an inventory

of products for the purpose of direct sales or assisting the head office in sales.

[Classification of a Branch]

Liaison Office

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80

Because the acquisition procedures for the lands requiring permission differ from those for the landsrequiring notification, it is desirable for a foreigner acquiring domestic lands to check, in advance, whetherthe target lands require notification or prior permission prior to the entry into a contract. Permission-required zones may be verified by a land use plan verification issued by the municipal office orthrough a phone call to the relevant department of the municipal office.

* judicial decision : within 6 months from the date of the final court decision - Place: Land Registration Division of the competent city/county/district office- Required documents: ·Transcript of land registration; ·Photo identification; ·Document verifying the cause of acquisition other than by contract.

In the case of...* inheritance: document verifying the inheritor* auction: notice of successful bid* redemptive right: document verifying repurchase (repurchase agreement)* judicial decision: final judgment of a court of law

- Processing period: on-the-spot (less than 3 hours)

•• CCoonnttiinnuuoouuss hhoollddiinngg ooff llaanndd- Subject of notification: a Korean national or a Korean corporation intending to keep land after changing to

"foreign national" as stipulated in the FLAA- Period: Within 6 months from changing nationality- Place: Land Registration Division of the competent city/county/district office- Required documents: ·Transcript of land registration ·Document verifying change of nationality ·Photo identification - Processing period: on-the-spot (less than 3 hours)

- SSuubbjjeecctt : land in military installation reservations; naval bases; military air base areas; cultural property protection zones;ecosystem preservation districts; islands necessary for military purposes; green belt zones

- PPeerriioodd : prior to the contractual agreement

- PPllaaccee : Land Registration Division of the competent city/county/district office - RReeqquuiirreedd ddooccuummeennttss : ·Transcript of land registration; ·Land acquisition contract concluded by both parties; ·Photo identification

- PPrroocceessssiinngg ppeerriioodd : Within 15 days from the filing date of the application

*The head of city/county/district office must grant permission on the condition that the acquisition of land located in thesaid designated areas does not cause any inconveniences in such areas (Article 4.3 of the FLAA)

[Land Acquisition Subject to Prior Permission]

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81

Land Acquisition Procedures for Foreigners

The laws and procedures applicable to a foreigner acquiring domestic lands vary depending on the purposeof acquisition, residence, and whether the foreigner is an individual or a corporation. The FLAA merely provides for the procedures to follow when a foreigner acquires lands in Korea (landacquisition notification, etc.). In addition to the land acquisition notification, acquisition of real estateproperty for profit purposes (real estate property lease, etc.) requires foreign investment notification, andacquisition by a non-resident under the FETA involves real estate property acquisition notification.

FFoorreeiiggnn--IInnvveessttmmeenntt CCoommppaannyy aanndd DDoommeessttiicc BBrraanncchh ooff FFoorreeiiggnn CCoommppaannyy Where a foreigner incorporates a domestic company (foreign-invested company) under the FIPA to engagein profit-making activities in Korea and purchases real property (office buildings, factory sites, etc.) in thename of such corporation, the applicable laws are the FLAA, the FIPA, and the Registration of Real EstateAct, which provide for the following acquisition procedures.

Business District tax office PPeerriioodd : In the case of a corporation, the registration is Registration Invest KOREA usually made simultaneously with the establishment of the

corporation; in the case of a personal business, the registrationis made within 20 days after starting the business. However, in cases where the commercial real estate (e.g., building) is constructed or purchased, the registration must be made before the contractual agreement or the ownership transfer of such real estate in order to receive value-added tax reimbursement. RReeqquuiirreedd ddooccuummeennttss : Transcript of company registration(company) or copy of FDI notification (individual business)

[Procedures for FDI Company and Domestic Branch of Foreign Company]

Business Proxy service Establishment provided by Invest

KOREA

Procedure Place Matters to be Noted

FDI Notification Head office/branches of PPeerriioodd : Prior to remitting investment capitalforeign exchange banks PPeerrssoonn : Investor or proxy (when applying through a proxy, Invest KOREA a power-of-attorney is required)

RReeqquuiirreedd ddooccuummeennttss: FDI notification form (provided)PPrroocceessssiinngg ppeerriioodd : On-the-spot (issuance of notification certificate)

▼

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▼

N/A


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82

Land Acquisition Land Registration PPeerriioodd : Within 60 days from the date of the contract

Notification Division of the competent RReeqquuiirreedd ddooccuummeennttss: Real estate acquisition contract;

city/county/district office Transcript of real estate registration* Applicable only when FDI

ratio is 50% or more

Real Estate

Acquisition

Contract&

Payment

FDI Company Same institution where PPeerriioodd : Within 30 days after the required payment is

Registration FDI notification was completed

made RReeqquuiirreedd ddooccuummeennttss: Certificate of foreign currency

purchase; transcript of company registration (company) or

certificate of business registration (individual business)

Registration of Registry office where the PPeerriioodd : Within 60 days from the date of the contractual

Real Estate land is located agreement (completion of payment)

RReeqquuiirreedd ddooccuummeennttss: Transcript of company registration

(individual: copy of foreigner registration); application form

(provided); document verifying the grounds of registration

(certified contract); registration certificate for rights of the

person entitled to registration

*When applying through a proxy, a power-of-attorney with

the applicant’s signature is required.

* For more information : Registry Division of the Ministry of

Court Administration (TEL: 82-2-3480-1394)

▼

▼

▼

N/AN/A

※ FDI companies that currently engage in business activities in Korea only need to file (1) Land AcquisitionNotification and (2) Registration of Real Estate when acquiring land in Korea.

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83

RReessiiddeenntt FFoorreeiiggnn NNaattiioonnaallssWhere a resident foreign citizen purchases a residential apartment unit or a domestic branch of a foreigncorporation acquires real property, registration of transfer of ownership requires only filing of a notificationwith the competent municipal office within 60 days of the entry into the purchase contract and nonotifications under the FETA (since only land requires acquisition notification). The applicable laws are theFLAA and the Real Property Registration Act (RPRA).

[Procedures for Resident Foreign National]

Land Acquisition Land Registration Division PPeerriioodd: Within 60 days from the date of the contract

Notification of the competent city/ RReeqquuiirreedd ddooccuummeennttss: Real estate acquisition contract; transcript

county/ district office of real estate registration

Registration of Registry office where the PPeerriioodd: Within 60 days from the date of the contract (completion

Real Estate land is located of payment). Required documents: Copy of alien registration

(branch: transcript of branch registration); registration

application form (provided); document verifying the grounds of

the registration (approval contract); certificate of registration

concerning the right of the person entitled to registration;

transcript of real estate registration.

*When applying through a proxy, a power-of-attorney with


*For more information: Registry Division of the Ministry of

Court Administration (TEL : 82-2-3480-1394)

▼

▼

••When a foreign national residing in Korea acquires real estate for residential purposes (e.g., apartment), he/sheis not subject to notification under FETA; he/she simply needs to file a land acquisition notification to thegovernment authority within 60 days from the date of the sales contract agreement, and then file a “Registrationof Transfer of Ownership”.

•• Applicable laws: FLAA, Registration of Real Estate Act

Procedure Relevant authority Precautions

Real Estate

Acquisition

Contract &

Payment

N/A N/A


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NNoonn--RReessiiddeenntt FFoorreeiiggnn NNaattiioonnaallss•In principle, a foreign national not residing in Korea must file a "Real Estate Acquisition Notification"

pursuant to FETA, if he/she wants to acquire real estate in Korea prior to remitting the funds foracquisition. Then a land acquisition notification under the FLAA has to be filed (if the real estate is land)following the required procedures for "Registration of Transfer of Ownership"

•Applicable laws: FLAA, FETA, Registration of Real Estate Act

84

Land Acquisition Land Registration Division PPeerriioodd : Within 60 days from the date of the contract

Notification of the appropriate city/ RReeqquuiirreedd ddooccuummeennttss : Real estate acquisition contract; transcript

county/district office of real estate registration *When acquiring real estate (e.g., building) excluding land and

other real estate-related rights (e.g., mortgage, right toregistered lease, etc.), land acquisition notification is notrequired.

Payment

[PROCEDURES FOR Non-Resident Foreign National]

Procedure Relevant Authority Precautions

Real Estate Acquisition Contract

▼

▼

▼

▼

N/A N/A

Real Estate Head office/branches of PPeerriioodd : When withdrawing funds for real estate acquisition Acquisition foreign exchange banks RReeqquuiirreedd ddooccuummeennttss : Real estate acquisition contract; written Notification statement of real estate appraisal or certificate of declared

value of the real estate; transcript of real estate registration NNoottiiccee: - Notification must be made when applying for both the

real estate acquisition and real estate-related rights (e.g., lease/real rights).

- When making an overseas remittance of funds for real estate disposition, a real estate acquisition notification must be submitted to the bank.

- Regarding eligibility of notification exemption, see chapter III

N/A N/A

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85

Registration of Registry office where the PPeerriioodd : Within 60 days from the date of the contract (completion

Real Estate real estate is located of payment)

RReeqquuiirreedd ddooccuummeennttss : Document verifying the address/ real

estate registration; registration application form (provided);

document verifying the grounds of the registration (approval

contract); certificate of registration rights; transcript of real

estate registration

*When applying through a proxy, a notarized power-of-

attorney is required.

* For more information: Registry Division of the Ministry of Court

Administration (TEL : 82-2-3480-1394)

▼

Applying for •Individual Seoul NNoonn--rreessiiddeenntt ffoorreeiiggnn iinnddiivviidduuaallss :

Real Estate Immigration Office - PPllaaccee : Seoul Immigration Office (TEL : 1345)

Registration •Corporation Land RReeqquuiirreedd ddooccuummeennttss : Certificate of land acquisition notification;

Number Registration Division of copy of passport

the city/county/ NNoonn--rreessiiddeenntt ffoorreeiiggnn ccoommppaanniieess :

district office - PPllaaccee: Land Registration Division of the appropriate

city/county/district office

- RReeqquuiirreedd ddooccuummeennttss : Certificate of land acquisition

notification; document verifying the identity of the company

(e.g., address, representative's name, registration of company

issued from the respective country). When applying through a

proxy, proxy's ID and a notarized power-of-attorney are

required.


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86

OOvveerrsseeaass KKoorreeaann NNaattiioonnaallss • Since those with permanent residence of a foreign country are still Korean nationals, they are not subject to

"Land Acquisition Notification" when acquiring land in Korea. They are also excluded from "Real EstateAcquisition Notification" pursuant to FETA whether they reside in Korea or not.

• In the case where Korean nationals abroad have a Korean registration number, they can follow thesame procedures as Korean nationals when applying for real estate registration. However, in cases wheresuch number has been cancelled, they need to obtain a "Registration Number for Real EstateRegistration".

• Applicable laws: Registration of Real Estate Act※ Since, unlike Korean nationals abroad, foreign citizens are considered foreign nationals, they need to

file a "Land Acquisition Notification" pursuant to the FLAA and "Real Estate Acquisition Notification" pursuantto FETA.

[PROCEDURES FOR Overseas Korean Nationals]

Procedure Relevant Authority Precautions

Real Estate Acquisition Contract

Applying for Registry Division of Seoul RReeqquuiirreedd ddooccuummeennttss : Document verifying the address or Real Estate District Court document verifying that a person resides in a foreign countryRegistration (TEL : 82-1544-0773)Number

▼

Registration of Registry office where the PPeerriioodd : Within 60 days from the date of the contract agreement

Real Estate land is located (completion of payment)

RReeqquuiirreedd ddooccuummeennttss : Document verifying address or document

verifying that a person resides in a foreign country; registration

application form (provided); document verifying the grounds of

the registration (approval contract);certificate of registration

concerning the right of the person entitled to the registration;

transcript of real estate registration

*When applying through a proxy, a power-ofattorney with


*For more information: Registry Division of the Ministry of

Court Administration (TEL : 82-2-3480-1394)

▼

N/A N/A

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