Corporation

The Foreign Invested Corporation – FIC

• Under the Foreign Investment Promotion Act in Korea, Foreign Investment is classified into (1) Foreign Direct Investment (FDI), which establishes a domestic corporation in Korea by transferring the legal capital to Korea, and (2) Foreign Indirect Investment, which invests in the Public Funds as well as Real Estates administrated by the Korean Government, by transferring foreign funds to Korea.
• A Foreign Invested Corporation means a domestic corporation established in Korea by transferring the legal capital from foreign countries.

Advantages of the Foreign Invested Corporation

Under the policy of actively attracting foreign investment, the foreign investment is granted incentives as well as benefits such as Permanent Residence Visa (F5), Long-Term Residence Visa (F2), Tax Deduction on Income Tax, Acquisition Tax, Registration Tax, Comprehensive Real Estate Tax, Voting Rights, Use of Express Immigration Gate, and Visa Fee Exemption if qualified.

1. No additional requirements.

1. Investors are not required any income certificate, Korean proficiency test, academic degree, or work experience or additional documents except legal capital investment.

2. Business activities are allowed.

1. A Foreign Invested Corporation can engaged in all kinds of business activities without any restrictions unless prohibited in the Laws.

3. Executives and Employees can be dispatched to Korea.

1. Executives and employees in the mother company can be dispatched to the Foreign Invested Corporation, the Korean Branch, and the Liaison Office in Korea.

4. Long-Term Residence Visa F2, Permanent Residence Visa (F5), or Korean Citizenship can be granted.

1. Investor Visa Holders can applied to Long-Term Residence Visa F2, Permanent Residence Visa (F5), or Korean Citizenship if legal stay duration, Income requirement and other requirements are qualified.

5. Free real estate transactions are guaranteed.

1. Foreign Investors can acquire real estates such as apartments and offices without any restrictions, take out loans with the purchased real estates as collateral, and transfer business income and real estate sales funds to overseas if the requirement is fulfilled.

6. Attending in a school is allowed.

1. Foreign Investors as well as their family can go to a school without a student visa or permission in Korea.

7. Signing up for the major social insurances is allowed.

1. Foreign Investors as well as their family have same benefits as Koreans by signing up for the 4 major social insurances such as Health Insurance, Unemployment Insurance, National Pension, Industrial Accident Insurance.

8. The family members get the same benefits.

1. Foreign investors’ spouse, underage children, and unmarried adult children can receive the same benefits.

Foreign Invested Corporations VS Branches VS Liaison Offices

1. Commercial Business Activities for Profit Purpose

1. While the Foreign Invested Corporations and the Branches can carry out commercial business activities for profits purpose without any restrictions, the Liaison Offices can only conduct non-profit activities such as market research, etc. and cannot issue legal tax invoices for tax reports.

2. Tax Reduction

1. The Foreign Invested Corporations can receive tax reductions on corporate income tax, acquisition tax, registration tax, comprehensive real estate tax under the Foreign Investment Promotion Act. However, the Branches and the Liaison Offices cannot receive such tax reductions.

3. Requirement for Remittance of Legal Capital

1. While the Foreign Invested Corporations are required to remit the legalcapital to Korea, the Branches and the Liaison Offices are not required legal capital.

4. Visa Type

1. The Foreign Invested Corporations can apply for Investor Visa (D8) or Dispatched Staff Visa (D7), and the Branches and the Liaison Offices are only allowed to apply for Dispatched Staff Visa (D7).

The differences between the Foreign Invested Corporations, the Branches and the Liaison Offices are as follows.

• The Requirement of Legal Capital : the Foreign Invested Corporations
• The Requirement of Court Registration :
  the Foreign Invested Corporations and the Branches
• The Business Activity for Profits : the Foreign Invested Corporations and the Branches

	FIC	Branch	Liaison
Foreign Investment Report	O	X	X
Certificate of FIC	O	X	X
Legal Capital	O	X	X
Court Registration	O	O	X
Business Activity for Profit	O	O	X
Bank Account	O	O	O
Visa Type	D7, D8	D7	D7
Purchase of Real Estates	O	O	O

Remark

• Legal Capital : Min. KRW100,000,000 (USD77,000 min.)
• The Legal Capital must be transferred from aboard. (Any local fund in Korea is not considered as the legal capital.)

Therefore, the decision should be made reasonably in consideration of business purposes as well as legal capital remittance.

The Establishment Procedure of FIC

1. The Establishment Procedures for the Branch and the Liaison office are applied to that of FIC by exempting (1) the Foreign Investment Report (2) the Remittance of Legal Capital (3) Court Registration (the Branch is required).

Inquiry for the Foreign Invested Corporations

Q & A

How much do I need to invest to apply to Investor Visa D8 ?

1. The minimum legal capital of the Foreign Invested Corporation is KRW100,000,000 (USD75,000). However, it is recommended to invest KRW300,000,000 (USD222,000) for the immigration inspection and the operating expenses if you want to obtain an Investor Visa D8 quickly.

How many executives and employees can the mother company dispatch to the Foreign Invested Corporation in Korea?

1. A foreign company that establishes a Foreign Invested Corporation in Korea can dispatch its executives and employees to the FIC in Korea. In principle, one professional employee can be dispatched for every KRW100,000,000 (USD75,000 equivalent) of the investment. However, the number of employees dispatched can be increased by submitting the necessary and supporting documents of the FIC.

What kinds of business can the Foreign Invested Corporation engage in Korea ?

1. The Foreign Invested Corporation has no limits on the business scope like regular domestic corporations in Korea. Therefore, the FIC can engage in all business activities including international trade.

Check Points for the Foreign Invested Corporation

1. The Name of Legal Capital Remittance

1. The legal Capital must be transferred in the name of the foreign investor, and the foreign investor must submit the company documents or the Family Relation Certificate if the Legal Capital Remittance is arranged by any company name or any family name, provided that any Legal Capital transferred under other persons’ names are considered as the proper legal capital. However, if foreign investor invest more than KRW 300 million, such legal capital transmitted under the names of parents is acceptable.

2. Proof of Legal Capital Sources

1. All foreign investors are required to submit the Proof of Legal Capital Sources that he/she own. Those funds from bank loans or borrowings are not considered as proper legal capitals.

3. Foreign Investment Report

1. All foreign investors are required to report their investment in advance prior to Legal Capital Remittance. Otherwise, 50% of the fund transferred in to Korea may be collected as income tax if they fail to get a investment permission and re-remit the funds to overseas.

Inquiry on other Foreign Investments

DaeHan Public Administrative Attorney’s Office has specializes in Foreign Invested Corporations (FIC) including Korea Branches and Liaison Offices, Immigration on Public Bond Investment and Real Estate Investment, and has provided Immigration & Investment Solutions, D8, D7 Visa Consulting, Management, Tax and Marketing consulting. We can submit any application for licenses or permits on the behalf of clients.

Please contact us for the following issues. (1) Establishment of Branches & Liaison Offices (2) Dispatch of Staffs on Long-Term Visas (3)
Immigration on Public Bond Investment (4) Immigration on Real Estate Investment (5) Visa Consulting on D8, D7, F5, F2 (6) Family Invitation & Other Immigration Issues (7) M&A & Technology Outsourcing (8) Stock Market Investment (KOSPI, KOSDAQ) (9) Management & Tax Consulting
(10) Marketing & Trading Consulting.