Foreign SME Requirements
FOREIGN MONEY required for SME FDI:
UPDATE 12 April 2013: The government has announced that the SME FDI investment will remain at W100 million equivalent in foreign currency. The backtracking could be the result of the feedback they received from the foreign community, with maybe a little dash of the current North Korean 'crisis on the peninsula'.
The following was announced around September to take effect in October first and then moved to June.
This is the policy the government has announced it will not longer implement (at least for now).
As of June 2013, the investment amount required for a foreign national to set up a Small/Medium Enterprise (SME) in Korea and acquire a ‘Work’ Visa is the equivalent in a foreign currency (USD or Euro) to KRW300 million. (Note: implementation date pushed back from November 2012 to June 2013)
EXCEPTION to FDI FX requirement.
Foreign passport holders who fall into one of the following categories may* not be reequired to bring foreign currency into Korea to obtain a business visa:
- overseas Korean (F4 visa)
- permanent resident (F2 or F5 visa)
- spouse of Korean national (F6 visa)
*K4E has used ‘may’ rather than ‘does’ because there can be exceptions or other interpretations by government/immigration officials of the requirements.The above visa categories need only comply with basic Korean requirements to set up a business. They are not required to bring foreign currency into the country.
Change for foreign sole proprietorships:
Foreign invested SME business operators who were sole proprietors (and not incorporated) have been assigned a D8 visa. In future, they may fall into the D-9 (International Trade and Management - 무역경영) category.
Foreign direct investors who are sole proprietors (not incorporated) who invested the equivalent to KRW50 million that was required when they set up their business, will have to increase their investment by another KRW50 million to KRW100 million to retain their D-8 visa status. They also have the option of not investing the additional money and changing their status to D-9. This will happen when their visa is due for renewal, not before.
So if you currently have a D-8 visa based on a KRW50 million equivalent investment in a sole proprietorship foreign-invested business and it is due to expire on 15 August 2013, there will be no change in your status until then. When you go to renew, you will have the choice of doubling your investment to retain your D-8 status or changing to a D-9.
If you do wish to retain your D-8 visa status, you will need to submit documented proof that you have completed the transition to incorporation process (basically that you have paid the additional KRW50 million.
Officials at the Ministry of Justice have explained to K4E staff that this new policy will make it easier for the Korean government to collect taxes from foreign invest SME’s.
New foreign SME investors, regardless of whether they will have a D-8 or D-9 visa, are required to bring the equivalent of KRW300 million in a foreign currency (usually EURO or USD) into the country in order to apply for a residency visa.
K4E Note: At the time of this posting (November 2012 and updated March 2012), information on these new regulations and requirements is somewhat sketchy and as yet only available in Korean. A ‘file’ telling current sole proprietorship D-8 visa holders and recent applicants that these changes would take effect after 29 October, was posted on the Hi-Korea website, File #260, in Korean only. Hi-Korea describes itself as ‘e-government for foreigners’ but the vast majority of file/memo updates are in Korean only – when one looks at the English version the postings of these information updates appear to be years in arrears.)
K4E Editor: Korea4Expats.com tries to ensure that the information we provide is accurate and complete, so should you notice any errors or omissions in the content above please contact us at email@example.com.
Regarding this issue, we are still in the process of researching information and will be updating this page as we learn more.
Last Updated on 2013-04-12
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