Yes, an individual can borrow foreign capital from overseas.If the individual is a non-profit organization or a non-resident, then the designated transaction has to be notified to the Bank of Korea through a foreign exchange bank. The individual who has borrowed foreign capital from overseas has to deposit the received capital into an account of a resident in the designated foreign exchange bank and use it for the purpose as stated at the time of notification / application for permission.

“Credit card business” refers to a business incorporating at least two categories of the below, including number 2.

1. Issuance and management of credit cards;
2. Settlement of payments related to credit card use;
3. Recruiting and management of franchise companies.

Relevant regulations regarding credit card business can be found in the “Credit-Specialized Financial Business Act,” and stipulates that permission needs to be obtained from the Financial Supervisory Commission with regard to the specific payment characteristics of the credit card business.
According to Art. 3 of the Credit-Specialized Financial Business Act, the parties eligible to receive the permission for credit card business are limited to specialized credit finance businesses or to those companies wanting to become a specialized credit finance company. Included are the ones as listed below:

– Parties that are established under different acts or laws or companies that have
received permission or approval by the Minister of Finance and Economy and are
designated by the President of the Republic of Korea.
– Parties in businesses, which are advised to add a credit card section to its business
and are designated by the President of the Republic of Korea.
In case of a foreign investor, there are no restrictions to entering the credit card market.
However, the foreign investor has to obtain permission for establishment from the Financial Supervisory Commission just as the Korean businesses are required to do by meeting the following requirements and minimum standards:
– Standard of financial soundness: adjusted net equity rate shall be more than 9%;
– Standard of human manpower and facilities: more than 300 employees, 30 stores,
necessary computers (including back-up), relevant software etc.
– Standard of capital: if operating less than two specialized credit finance businesses
KRW 20 billion, if operating more than three specialized credit finance businesses KRW
40 billion.

According to the “Credit-Specialized Financial Business Act”, the businesses belonging to the credit-specialized finance business sector are credit card business, facilities leasing business, installment finance and new technology business financing.

A foreign national who wants to invest in the Korean stock market has to first register at the Financial Supervisory Service and designate a custodian bank. The necessary capital for the investment has to be sent to the custodian bank. It is possible to assign a proxy for further duties or tasks. After the above process is completed, the foreign national can make investment through an assigned security company. In reality, it is possible that the security company conducts all the above procedures if designating a specific security company to do so.

♦ Banking Sector

Type of approval or permit and relevant institution:
– Approval from the Financial Supervisory Committee
· Capital requirement:
– Banks in the cities: KRW 100 billion
– Banks in the province: KRW 20.5 billion
– Basis of judgement:
– Validity of the business plan;
– Appropriateness of the amount of capital;
– Composition of shareholders and the potential of successful fundraising;
– The management capabilities of the promoters or the management as well as their
reliability and interest to benefit the public.
· The same conditions are described above are applied when the foreign investor
participates in the setting up of a new bank;
· If a foreign bank wants to set up a branch office in Korea and has to obtain an
approval from the Financial Supervisory Committee, the capital basis is considered
as the operational fund of the branch.

♦ Security Sector

· Type of approval or permit and relevant institution:
– Permit from the Financial Supervisory Committee
· Capital requirement:
– Comprehensive security business: KRW 50 billion;
– Security dealing and security brokerage business: KRW 20 billion;
– Security brokerage business: KRW 3 billion.
· Requirements, if the major investor is a foreign company:
– Has to conduct a security business in a foreign country as of the date of applying for
the permit;
– The amount of capital of the company according to the revised financial statement
has to be more than four times the amount of investment as of the end of the most
recent business year;
– Has to satisfy a certain credit rating level from an internationally renowned credit-
rating institute (e.g. above ‘investment-qualified’) or other standards set by a
government evaluation agency proving its financial soundness;
– No record of administrative penalty heavier than a corporate warning or a penal
punishment of more than a fine during the last three years;
– An establishment of a domestic branch of a foreign security company has to obtain
a permit from the Financial Supervisory Committee.

♦ Insurance Sector

· Type of approval or permit and relevant institution:
– Permit from the Financial Supervisory Committee
· Capital requirement: KRW30 billion (KRW 10 billion, in case only partial business is
conducted)
· Documentary requirements for a foreign insurance business:
– The type of business to be conducted in Korea has to be the same as that conducted
overseas pursuant to foreign laws;
– Enough assets, and proven financial transparency and business stability to conduct
business in Korea. Status quo is to be internationally acknowledged;
– Possibility of protecting the insurance contractor, and enough physical facilities such
as professional manpower and computer equipment available to conduct the
insurance business;
– Sound and adequate business plan.

♦ Credit-Specialized Financial Business Sector

· Type of approval or permit and relevant institution:
– For facility lease and rent, installment finance, new technology business financing:
registration at the Financial Supervisory Committee;
– For credit-card business: permit of the Financial Supervisory Committee.
· Capital requirement:
– less than two credit-specialized financial businesses : KRW 20 billion;
– more than three credit-specialized financial businesses : KRW 40 billion.

♦ Security Investment Trust Sector

· Type of approval or permit and relevant institution:
– Permit of the Financial Supervisory Committee
· Capital requirement: KRW10 billion
· Requirements for a foreign investor:
– Has to conduct the same kind of business overseas at the day of filing the
application for the permit;
– The amount of capital has to be at least three times the amount for investment as of
the end of the most recent business year;
– Has to satisfy a certain credit-rating-level from an internationally-renowned credit-
rating institute (e.g. above ‘investment-qualified’ level) or other standards set by a
government evaluation agency proving it’s financial soundness;
– No record of administrative penalty heavier than a corporate warning or a penal
punishment of more than a fine during the last three years.

A permanent establishment refers to a permanent place in Korea conducting all or part of the business activities of a foreign company. The foreign company does not only decide on how to pay the taxes regarding the withheld income, but also about whether or not the profits from the business are subject to taxation.

Several conditions must be met to be acknowledged as a permanent establishment:
– Existence of a business location (place);
– Business location has to be fixed (duration);
– Business has to be conducted through that location (function).

Even if the above conditions are not met, a permanent establishment is also whe

– There is a person acting as a subordinate agent with the right to execute;
– A domestic liaison office actually executing business activities of the foreign company;
– A domestic liaison office conducting business activities not for the headquarters but for
an affiliate company.

According to Art. 18 of the Special Tax Treatment Control Law, a foreign engineer providing work to a Korean national is exempted from income tax for five years.Pursuant to Art. 16 of the Enforcement Decree of the Special Tax Treatment Control Law, the technology and the work provided by the foreign engineer has to be subject to deduction of corporate tax. 

The standard tax base for income tax is calculated by deducting the income tax and general income tax from the total income:

Yes. The application needs to be submitted separately at the Ministry of Finance and Economy. 

The following documents need to be submitted with a copy of the approval for tax deduction: