How to Report Overseas Direct Investment

Procedure

Procedure

1. 01

   1. Check whether it is overseas direct investment — Check whether the investor acquires 10% or more of the foreign corporation, or, if below 10%, whether it builds a relationship such as dispatching an executive or a sales or technology contract of 1 year or more. Additional acquisition of shares in a corporation already invested in and lending with a repayment period of 1 year or more are also overseas direct investment. Paying funds to set up and run a non-corporate business abroad is also included.

2. 02

   2. Determine the foreign exchange bank for the report — A company belonging to a main debtor group reports to its main creditor bank, other companies report to the bank with the largest credit, and a resident that fits neither reports to a bank it designates. The bank that receives the report becomes the reporting institution for later remittance reports and follow-up reports. Once the investment schedule is set, confirm the remittance timing and required documents with this bank first.

3. 03

   3. Prepare the overseas direct investment report and business plan — Fill in the investment details on the overseas direct investment report in Form 9-1 and prepare a business plan including the funding and use plan. Attach a document proving that the investor is not registered as a defaulter with the comprehensive credit information agency and a document proving no tax arrears. For a share acquisition, add documents the reporting bank considers necessary, such as the share transfer agreement.

4. 04

   4. Remit after reporting to the foreign exchange bank — Article 18 of the Foreign Exchange Transactions Act requires the report to be completed before payment, so funds are remitted after the report. Even before reporting, up to USD 100,000 may be paid through the designated foreign exchange bank, but the reporting procedure must be completed within 1 year from the date the contract is concluded. Report documents may also be submitted electronically after real-name verification.

5. 05

   5. Continue follow-up reporting — File a remittance (investment) report immediately after remittance and a foreign securities (claims) acquisition report within 6 months after paying in the investment. If total investment exceeds USD 3,000,000, file an annual business performance report within 5 months after the end of the fiscal year; report changes within 5 months after the end of the fiscal year in which the change occurred, and a sale of shares to another resident within 3 months. If the foreign subsidiary is liquidated, bring the remaining assets back to Korea and submit the liquidation report immediately.

Filing route

Filing route

Deadlines & processing notes

Deadlines & processing notes

Fees & official charges

Fees & official charges

Included in the basic fee — Initial document review, required-document guidance, basic form preparation, one filing support and one ordinary supplement.

Conditional success fee — For this service, any conditional success fee may be separately agreed within the lawful service scope and stated in a written engagement agreement. No outcome is guaranteed.

Displayed amounts are starting estimates, not statutory or standard rates. The final fee is confirmed after consultation and document review in the engagement agreement. Government fees and actual expenses may change.

Basic documents

Basic documents

Investing without reporting or with a false report can lead to an administrative fine of up to 100,000,000 won, and large violation amounts are subject to criminal penalties. If money has already been remitted, report the violation to the sanctioning authority and file a post-report with the reporting bank. Failing to post-report a transaction eligible for post-reporting, or reporting falsely, can lead to an administrative fine of up to 30,000,000 won, so share transfers and retained-earnings capital increases should also be reported within 3 months from the transaction date.