2010년 3월 23일 화요일

ancestor,Hanbok,Sebae - korea lunar new year #2

Korean often retrun to their ancestral hometown for the new year.
Given Korea's post-war urbanization, this translates into a phenomenon
known as the Great Migration, in which korea's major cities empty out
and rural communities seem to double in population.
The great migration is also accomplished by legendary traffic congestion
on national highways.
Many Korean families perform an ancestral rite ceremony, or Charye
ceremony involves bowing before a shrine, upon which a good deal of
sacrificial food is placed. the food  which is consumed by the family afterward,
requires much preparation, traditionally performed by a family's womenfolk.
another custom is the Sebae.
younger family members perform a deep bow to their elders (parents, grandfather etc)
and wish them a happy new year; parents reward this with a small gift, usually money
Koreans often mark the new year with a set of new korean clothing or hanbok - the new
year's hanbok is called Seobim.
Traditional games are played, too, particularly the board game of Yutnori.

2010년 3월 19일 금요일

Land Acquisition System for Foreigners - doing business in seoul # 5

If a foreigner intends to acquire any land in Korea, in principle, the foreigner can purchase it regardless of the target land’s zoning district. The foreigner only needs to report to the competent government office after the land acquisition. However, prior approval is required for acquisition of land in a military facility protection zone, cultural property protection zone, ecosystem conservation zone, or some islands that are used for military purposes. In addition, acquisition of land in Korea by a foreigner or a foreign corporation of a country that prohibits purchase of land in such country by a Korean citizen or a Korean company may be prohibited based on reciprocity.
Introduction to the system

There are three main laws governing land acquisition by foreigners in Korea. First, the Foreigner’s Land Acquisition Act prescribes general matters regarding foreigners’ local land acquisition. Second, the Foreign Investment Promotion Act deals with incentives for any foreign-investment company such as simplified investment notification procedures, tax reductions or exemptions and favorable conditions on purchasing government properties if they register under the said law and acquire any land in Korea. Thirdly, the Foreign Exchange Transaction Regulations stipulate matters regarding foreign exchange inflow and outflow related to non-resident’s acquisition of local immovables.

Foreigner's Land Acquisition Act (FLAA)

Any foreigner may acquire domestic lands merely by filing a notification in accordance with certain procedures except in a limited number of cases where permission is required. There are two types of notifications: land acquisition notifications and notifications of continuous holding of land. The documents that must be attached to a land acquisition notification vary depending on the cause of acquisition (acquisition by contract, inheritance, auction, exercise of the right of repurchase, acquisition by a final court judgment, etc.).

In the case of permission as opposed to notification, the foreign purchaser must apply for and obtain a permit prior to the entry into any land purchase contract where the permission is required. If the lands are acquired for for-profit purposes, a foreign investment notification must be filed in addition to a land acquisition notification. If the foreigner acquiring the lands is a non-resident, a real property acquisition notification under the Foreign Exchange Transactions Act (FETA) must be additionally filed.
Land acquisition by contract, non-contracted land acquisition, and continuous holding of land require notification after the fact.

[Land Acquisition Through Notification]


● Land acquisition through contract

- Subject of notification : land acquired through a contractual agreement (excluding land subject to permission)

- Period : within 60 days from the agreement date of the contract

- Place : Land Registration Division of the competent city/county/district office

- Required documents :

· Transcript of land registration;

· Land acquisition contract;

· Photo identification (when notification is filed through a proxy, IDs of both proxy and the foreigner acquiring land are required)

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

● Land acquisition by other causes than a contract

- Causes of acquisition other than by contract: inheritance, auction, exercise of redemption right, final judgment of a court of law

- Period : within six months from the acquisition date

In the case of...
* inheritance: within 6 months from the date of predecessor's death

* auction : within 6 months from the date of successful bid

* redemptive right : within 6 months from the date of repurchase agreement or of deposit for repurchase

* 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)

● Continuous holding of land

- 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)

The acquisition procedures for the lands requiring permission differ from those for the lands requiring notification, therefore, it is desirable for a foreigner acquiring domestic lands to check, in advance, whether the target lands require notification or prior permission prior to the entry into a contract. Zones requiring permissions may be verified via a land use plan verification issued by the municipal office or through a phone call to the relevant department of the municipal office.

[Land Acquisition Subject to Prior Permission]

- Subject : 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

- Period : prior to the contractual agreement

- Place : Land Registration Division of the competent city/county/district office

- Required documents :

· Transcript of land registration;

· Land acquisition contract concluded by both parties;

· Photo identification

- Processing period : 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 the said designated areas does not cause any inconveniences in such areas (Article 4.3 of the FLAA)

Land Acquisition Procedures for Foreigners

The laws and procedures applicable to a foreigner acquiring domestic lands vary depending on the purpose of 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 (land acquisition notification, etc.). In addition to the land acquisition notification, acquisition of real estate property for profit purposes (real estate property lease, etc.) requires foreign investment notification, and acquisition by a non-resident under the FETA involves real estate property acquisition notification.

Foreign-Investment Company and Domestic Branch of Foreign Company

Where a foreigner incorporates a domestic company (foreign-invested company) under the FIPA to engage in profit-making activities in Korea and purchases real property (office buildings, factory sites, etc.) in the name of such corporation, the applicable laws are the FLAA, the FIPA, and the Registration of Real Estate Act, which provide for the following acquisition procedures.

2010년 3월 16일 화요일

Korea business start up education program in Seoul , Korea

   Q&A :     August8002@gmail.com

Establishment of Business Entity - doing business in seoul #4

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


Corporation and Company

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

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

In order for a foreign company to conduct ordinary business activities in Korea, it must appoint a representative of a domestic branch, undertake procedures for establishment of a branch under the Foreign Exchange Transactions Act, and register with the court. In addition, a branch is classified as a permanent establishment of the foreign corporation for tax law purposes. So the income generated from the domestic business activities of the branch will be subject to the same corporate tax rates applicable to domestic companies.
Liaison office

The fundamental difference between a branch and a liaison office is that a liaison office may not conduct business activities. Accordingly, a liaison office must obtain a serial number issued by the relevant tax office but is not required to register with the court.

Procedures to Establish a Company

The procedures for establishing a domestic company 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 a Korean citizen, the incorporation procedures are essentially the same except for the additional requirements related to an advance report of foreign investment and registration as a foreign-invested company.


Foreign Investment Notification

The reporting party is either the foreign investor himself/herself or any other person having a power of attorney executed by the investor. The foreign investment report must be filed with a foreign exchange bank or Invest KOREA and is processed immediately upon filing. The documents to be submitted are: (i) the foreign investment report, and (ii) a certificate of nationality.
Remittance of Foreign Capital Contributions

Foreign capital contributions may be either remitted to a local bank account or brought in through customs procedures. If remitted, the contributions are converted into local currency within Korea and deposited in a capital contribution account (or a securities margin account), against which the bank issues a certificate of capital contribution.
Incorporation of Company

Please refer to the explanation in the “Procedures for Incorporation” section on page 71.
Business Registration

Please refer to the explanation in the “Business Registration” section on page 74.
Transfer of Paid-in Capital to Corporation's Account

Upon completion of the procedures for incorporation, court registration and business registration, the newly-incorporated company is a lawful and valid entity, and the bank will transfer the paid-in capital contribution held in the custody of the bank to the company’s bank account.
Foreign-Invested Company Registration

A foreign-invested company must register with the relevant agency to which it made the foreign investment report within 30 days of the completion of the paid-in capital contribution. The documents to be submitted include: (i) one copy of the application for foreigninvested company registration, (ii) one copy of the corporate registry extract, and (iii) one copy of the certificate of foreign exchange purchase receipt/deposit. The certificate of foreign-invested company registration is used as an attachment when filing for overseas remittance of investment proceeds or an extended-stay visa (D-8).

Procedures for Incorporation

It is more desirable to entrust a lawyer, a judicial scrivener or Invest KOREA with incorporation procedures 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 of the domestic corporation is required at the time of filing.

Methods for Incorporation

There are two methods for incorporation of the company: (i) by promotion and (ii) by public offering. Incorporation by promotion is the promoters’ establishing a company by subscription for all shares issued by the company at the time of incorporation. Incorporation by public offering involves the promoters’ subscription for part of the shares issued at the time of incorporation, with the public offering of the remaining shares.

Procedures for Establishment

- Incorporation by Promotion

Constitution of promoters→preparation and notarization of articles of incorporation→decision on the number and class of shares to be issued→share subscription by promoters→capital contribu-tion in cash or kind→appointment of directors and statutory auditor→report on the progress of incorporation by the directors and statutory auditor →convening the inaugural board of directors meeting and appointment of representative director→registration of incorporation→incor-poration notification and business registration

- Incorporation by Public Offering

Constitution of promoters→preparation and notarization of articles of incorporation→decision on the number and class of shares to be issued→ share subscription by promoters→gathering of shareholders→ capital contribution→convening of inaugural general shareholders’ meeting (appointment of directors and statutory auditor, report on progress of incorporation)→convening of board of directors meeting and appointment of representative director→registration of incor-poration→incorporation notification and business registration

Registration of Incorporation

- Registration Period

A company incorporated by promotion must be registered within two weeks of the completion of the investigation of the progress of incorporation. A company incorporated by public offering must be registered within two weeks of the last day of the inaugural general shareholders’ meeting.

- Pre-Registration Decisions

Prior to registration, the company must review its promoters and the viability of corporate names. A company requires one or more promoters who must subscribe for the shares in writing and thereby become shareholders of the newly-incorporated company. If a corporate name chosen by such company is identical to or not clearly differentiated from another name registered by another person within the same line of business and within the same municipality, such a name may not be registered. This can be verified in the Seoul municipality through the Supreme Court’s website (www.scourt.go.kr) under the “Registered Business Names” link, and at the relevant registration office for other municipalities.
- Documents Required for Registration

The list of documents required for registration is as follows:


Prepared by Applicant

- Foreign investment notification certificate
- Letter of attorney

ㆍRegistration application by the representative director Representative director becomes the appointee
    of all letters of appointment
ㆍRegistration application by judicial scrivener: The judicial scrivener becomes the appointee

- Executive inauguration acceptance certificate

ㆍKorean citizens: Attach registered seal/certificate and certificate of residence
ㆍForeigners: Attach original of signature authentication, copy of passport;

- Subscription money for stocks deposit certificate
- Corporate registered seal
- City railroad public bonds
- Supreme Court income certificate stamp
- Registration tax payment receipt:

Relevant district office where company headquarters is located

- Personal registered seals of each executive and promoter (including foreigners)
- Articles of association (notarized)
- Share acceptance certificate
- Application for stocks
- Report on inauguration matters
- Written consent to shorten the inauguration meeting period
- Inaugural meeting minutes (notarized)
- Board of directors' meeting minutes (notarized)
- Seal impression registration certificate and corporate registered seal card application form
- Shareholder register
- Written consent to share issue matters
The list of documents prepared by the investor in his/her own country depends on whether the investor is an individual or a corporation. The requirements also differ if the investor’s nationality is Japanese. In the case of a corporate investor, the applicant must bring a copy of one’s resident registration certificate or the driver’s license 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 the exception of Japanese citizens). The list of promoters is not required to be identical to that of the officers.


Incorporation Notification and Business Registration
The business registration must be made within 20 days of the commencement of business, and the incorporation notification filed within two months of the registration of incorporation. The schedule of the required documents is as follows:
Required Documents

- Corporation establishment notification and business registration form
· Articles of association (Attach an itemized account of investment object for investment in-kind)
· Certified copy of corporate registration

- Accounts of shareholders, etc.
- Business permit certificate (for businesses requiring permits, approvals, notifications, etc.)
- Copy of lease contract (when renting a place of business)
- Other
· Taxpayer registration notification form (when there are no executives to handle matters related
   to domestic tax);
· Copy of foreign exchange purchase certificate;
· Copy of foreign currency purchase certificate;
· Alien registration certificate or copy of passport (when the representative is a non-resident)

Business Registration to Be Done Beforehand

If a foreign investor makes his/her investment in-kind and thereby incorporates a company, business registration must be filed before the capital contribution in-kind is made because the business registration certificate is required for the VAT refund at the time of customs clearance for the in-kind contribution. The documents to be submitted include the resident registry extracts of the promoters, copies of any lease agreements, and a copy of the application for the business license (if applicable) or a business plan. Other documents required for incorporation must also be filed after the incorporation as well.

Sole Proprietorship Registration

Foreign Investment Notification
The reporting party is either the foreign investor or any other person having a power of attorney executed by the investor (notarization not required). The report must be filed with a foreign exchange bank or the report is processed immediately upon filing.

Remittance of Capital Contributions
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 remittance of 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.

Business Registration

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



Required Documents

- Business registration application form
- Copy of business permit certificate, etc. (for businesses requiring permits, approvals, notifications, etc.)
- Copy of lease contract (when renting a place of business), or certified copy of building registration
- Other

· Taxpayer setup notification form (for such cases as when the owner of the business does not normally
    reside at the place, or stays abroad more than 6 months, etc.)
· Contract of partnership for a joint business (notarized)
· Copy of foreign investment notification form
· Copy of foreign exchange purchase, deposit certificate
· Present original of alien registration certificate (or passport) and submit a copy (when the business
   owner is a non-resident)

Foreign-Invested Company Registration

The registration must be filed at the same agency where report of the foreign investment was made within 30 days of the completion of the payment of the capital contribution. Required documents include an application for foreign-invested company registration, a business registration, and a certificate of foreign exchange purchase receipt/deposit.

Domestic Branch of Foreign Company

Establishment Notification
- 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 nonbanking 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

- Documents to be submitted in Application for Permit or Filing Notification with a Designated Foreign Exchange Bank
· Notification form of establishment of domestic branch by foreign company
· Articles of incorporation of the head office (notarized in the jurisdiction where the head office is located)
· Letter of appointment of the head of the domestic branch
· Power of attorney if applicable (notarized in the jurisdiction where the head office is located)
· Corporate registry extract or business license of the head office (if a photocopy is submitted, notarized in the jurisdiction where the head office is located)

Registration of Establishment of Branch

The Commercial Code does not distinguish between a branch and a liaison office and requires the establishment of a domestic place of business and registration thereof if a foreign company intends to operate any business activities within Korea. In practice, for registration purposes, an office is not deemed to be engaged in business activities under the foreign exchange regulations and is only permitted to conduct routine activities such as exchange of information and similar activities. Thus, it is impossible to register a liaison office as a place of business, and only a branch can be registered as a place of business.

Closure and Redemption after Liquidation

- Notification
If any person having obtained a permit for establishment, etc. under Korean law intends to close a domestic branch or repatriate funds obtained from the sale of the domestic assets after closure of business operations, such person must file a notification with the designated foreign exchange bank.

- Limit on Withdrawal Amount
The repatriation amount is limited up to the sum of the initial operating capital contributed from abroad, retained earnings and other reserves (deduction of deficits, if any)

- Documents required for repatriation of liquidation proceeds
· Letter of application: to be filed under the name of the liquidator if an applicant is appointed
· Background to the application
· Liquidation report audited by a certified public accountant (including a balance sheet and a statement of
  income as of the date of closure or liquidation)
· Certificates of tax clearance (one copy each for national and local taxes)
· A statement of operating capital contributed from abroad, retained earnings and other reserves
· A certificate of deposit balance (must be consistent with the remittable amount as stated
    on the liquidation report)
· A certified copy of liquidation registration, if the branch has been engaged in business activities
· The following documents if a certified copy of liquidation registration is not available

* A closure notification certificate (issued by the competent tax office)
* A document evidencing appointment of a liquidator
* A document evidencing that notification was given to liquidation creditors (photocopies of public notices in newspapers)
* A confirmation of wage arrears clearance for Korean workers (issued by the competent labor office)
* An original copy of the closure notification

2010년 3월 15일 월요일

Doing business in Seoul #3

Foreign Investment Zone (FIZ)


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

Designation and Development of FIZ

Each mayor and governor may designate a certain area of a National Industrial Complex or a Provincial Industrial Complex, for the purpose of leasing or transferring exclusively to foreign investors (the “Foreign Company 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 government may designate a certain area which is sought for investment by foreign investors (the‘Foreign Company Hope Zone’) as a FIZ upon consultation with the Foreign Investment Committee, and in such case, the criteria 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, it can be developed as a Provincial Industrial Complex, which requires a development plan.

Support for FDI companies in FIZ


The Korean government supports foreign-invested companies operating in FIZs with tax reductions or exemptions and privileges such as construction costs and basic facility support and exemption of the traffic generation charge.



Doing business in Seoul #2

Protection and Liberalization of Foreign Investment


Protection of Foreign Investment

Through the Foreign Investment Promotion Act (FIPA), foreign investments are provided high level of investment protection.
With respect to the proceeds that come from the stocks etc. acquired by a foreign investor, proceeds from the sale of stocks, etc., the principal, interests, and service charges paid in accordance with the loan contract, and the compensation paid in accordance with a license agreement, their remittance to foreign countries is guaranteed in accordance with the details of the permission or report of the foreign investment contract or the license agreement at the time when the said remittance is made.
Foreign investors and foreign-capital invested companies are treated in the same way as nationals of the Republic of Korea and Korean corporations.
The provisions concerning the abatement or exemption of taxes from among tax laws applied to Korean corporations or Korean citizens also apply to foreign investors, foreign-capital invested corporations, persons who have extended loans and persons who have provided technology as prescribed in the Foreign Investment Promotion Act.

Liberalization of Foreign Investment

A foreigner may conduct, without restraint, various activities of foreign investment in Korea except for the following cases:
- Where it threatens the maintenance of national safety and public order;
- Where it has harmful effects on public hygiene or the environmental preservation or is against Korean 
   morals and customs; and
- Where it violates the Acts and subordinate status of the Republic of Korea

Foreign Investment Protected Business Categories
- Postal business, central bank, private mutual-aids, financial market management businesses, other financial
   support services etc.

- Legislative/judiciary/administrative bodies, official foreign residences in Korea, other international and
  foreign institutions
- Educational institutions (infants, primary school to college level, special schools, etc.)
- Artistic, religious, environmental/political/labor movement organizations etc.
In the cases where foreign investment is restricted, the Korean government enforces such restrictions mostly by 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 is prohibited and partially permitted. In the case where a foreigner intends to invest in a company that is engaged in more than two businesses where foreign investment is partially permitted, the foreigner cannot invest in excess of the investment ratio prescribed for the business with the lowest ratio for permitted foreign investment.
However, a foreigner can invest in a company engaged in a foreign-investment restricted business if the sales of the restricted business are less than one percent of its total sales. However, if the company’s sales from the restricted business generates more than one percent of its total sales after the foreigner purchases the shares, the foreigner must transfer the shares in the company to a Korean citizen or a Korean company within six months of the settlement of its account; provided, however, that the transfer can be postponed up to an additional six months after obtaining permission from the Ministry of Knowledge Economy (MKE).



Doing business in Seoul #1

Foreign investment promotion Act (FIPA)

foreign investment promotion act is to provide necessary
support and convenience to foreign investment, with the
ultimate view of contributing to the sound development
of each economy.
The FIPA delegates certain items to its Enforcement
Decree and Enforcement Regulations and the Regulation
of Foreign Investment and Technology Importation.

The foregin Exchange Transaction Act (FETA) governs
foreign exchange transaction related to foreign investment,
and the Special Tax Treatment Control Act, its Enforcement
Decree and Enforcement Regulations and the Regulations
on Tax Exemptions or Reductions for foreign Investment
provide for exemptions and reductions of applicable taxes
related to foreign investment.

* Definition of Terms and Relating to Foreign Direct Investment