To apply for a D8 visa for foreign investors, the first thing you need to do is report foreign investment. If the initial step is not done correctly, it can lead to difficulties in subsequent procedures, and ultimately, it can affect the visa issuance. Therefore, today, we will look into the essential matters to be aware of when reporting foreign investment. First, let's examine the basic requirements and procedures for foreign investment.
Basic Requirements for Foreign Investment
◆ Each foreign investor must meet the following conditions simultaneously:
・Foreign investment amount: 100 million KRW or more
・Foreign investment ratio: Ownership of 10% or more of the total voting shares or total capital contribution
Exceptions
- Even if the investment ratio is less than 10%, if a foreigner dispatches or appoints an executive to the domestic company, it is exceptionally recognized.
(An executive refers to a director, CEO, executive with unlimited liability, auditor, or someone with the authority to participate in important management decisions.)
Purpose of Capital Contribution
◆ According to the Foreign Investment Promotion Act, one of the following must apply to the means (investment tools) by which a foreign investor owns shares, etc.
◇ Cash: Foreign payment means (foreign currency) according to the Foreign Exchange Transactions Act or domestic payment means (converted KRW) resulting from its exchange
◇ Capital goods
◇ Profits derived from shares acquired under the Foreign Investment Promotion Act
◇ Industrial property rights, intellectual property rights, and other similar technical and usage rights
◇ Remaining assets distributed to the foreign investor following the liquidation of a domestic branch, office, or domestic corporation in which the foreigner invested
◇ Repayment of loans or other borrowings from abroad reported for a long term under the Foreign Investment Promotion Act
◇ Shares specified by Presidential Decree
- Shares of a foreign corporation listed or registered on a foreign securities market
- Shares owned by a foreigner under the Foreign Investment Promotion Act or the Foreign Exchange Transactions Act
◇ Domestic real estate owned by a foreigner under the Foreign Exchange Transactions Act
◇ Proceeds from the disposal of shares or real estate owned by a foreigner under the Foreign Investment Promotion Act or the Foreign Exchange Transactions Act
Procedure and Points to Note for Foreign Investment in Korea
1. Preparation of Foreign Investment Report/ Application
◆ Investment report: Prepare 2 copies in Korean or English
- Foreign investment report for acquiring or contributing shares
- Nationality certificate of the foreign investor, ID of the representative
- Personal (credit) information collection and use consent form (for foreign investment)
- Power of attorney: If represented, notarization is required
2. Issuance of Investment Report Certificate/ Transfer of Investment Funds to Korea
◆ Transfer the capital from abroad to the domestic bank branch where foreign investment reporting is possible
- Principle of transferring after investment reporting (pre-reporting principle)
- The investment funds should be sold for KRW and deposited as share subscription money (bank intermediation)
▶ Certificate of foreign exchange purchase (deposit) / share subscription deposit certificate (for corporate registration) issued
- Power of attorney: If represented, notarization is required
※ Essential details when transferring
1. Receiving bank name 2. Sender's name 3. Recipient's name
4. Purpose of funds: Indicate "For company establishment or investment funds" in the Detail section when transferring
(Example: "Investment fund in [name of the foreign investment company]")
※ In principle, the sender's name and the recipient's name should be the same.
※ Since it's foreign investment, the transfer must be in dollars or foreign currency.
Some ask if they should convert to KRW and transfer, but transferring in converted KRW is absolutely not allowed.
If the investor is in Korea and needs to transfer funds on behalf,
The Ministry of Justice limits proxy transfers to spouses and minor children,
so only spouses and minor children must transfer. An important point to note when making a proxy transfer is that
The bank-issued document (Swift message) in Field 70, containing the transfer information (Remittance information), must include "sent on behalf of [investor's name] for the investment in [name of the foreign investment company]", and when the document arrives at a Korean bank, it must be in the mt103 format.
3. Corporate Establishment
◆ It takes approximately 3~5 days after applying for corporate establishment at the court (registry office) in charge of the address.
4. Application for Registration of a Foreign Investment Company / Receipt of Certificate of Registration of a Foreign Investment Company
◆ Required documents when applying for registration of a foreign investment company
- One copy of the application form for registration of a foreign investment company
- One copy of the foreign exchange purchase (deposit) certificate
- Corporate registration certificate (in case of a corporation) after investment completion
- Business registration certificate
- Shareholder register (with corporate seal)
- Corporate seal certificate
- Power of attorney and ID of the representative if applied by proxy
- Personal (credit) information collection and use consent form (for foreign investment)
So far, we have looked into the procedures and required documents for the foreign investment report when establishing a foreign investment corporation.
Our ALL VISA KOREA, has experience in establishing foreign investment corporations from various countries and issuing D8 visas. We provide one-stop service from foreign investment reporting to D8 visa issuance. If you have any inquiries about establishing a foreign investment corporation and the foreign investment visa (D8 visa), please contact us. We will kindly consult and handle the complex procedures for you at a reasonable price.