1. Target of overseas direct investment report
Foreign currency securities acquisition
(Enforcement Decree of the Foreign Exchange Transaction Act Article 8, Paragraph 1)
When the share or investment stake acquired to participate in the management of a corporation established in accordance with foreign laws and regulations (including a corporation under establishment) accounts for 10% or more of the total number of issued shares or investments of the foreign corporation
In case of additional acquisition of stocks or investment shares of a foreign corporation that has already invested
Acquisition of foreign currency loans
(Enforcement Decree of the Foreign Exchange Transaction Act Article 8 (1) 4)
When a resident who has invested in a foreign corporation in accordance with the above foreign currency securities acquisition method lends money to the foreign corporation with a repayment period of at least 1 year
Establishment, expansion and operation of overseas offices or payment of funds for overseas business activities
(Article 8, Paragraph 2 of the Enforcement Decree of the Foreign Exchange Transaction Act)
When establishing, expanding, or operating a business office in a foreign country, or providing funds for conducting overseas business activities
▶ Installation fees and operating funds of foreign branches or offices
▶ Funds for residents to establish and operate a non-corporate enterprise in a foreign country
▶ Funds for overseas resource development projects or social overhead capital development projects pursuant to Article 2 of the Overseas Resource Development Business Act
However, research funds for overseas resource development and purchases of overseas resources are excluded.
※ Note: Those who are tax delinquent, who are subject to credit management, and who are undergoing overseas migration procedures are not eligible investors and cannot make direct overseas investment.
2. Obligation to report and report on foreign direct investment (Foreign Exchange Transactions Act Article 18, Regulations 9-5, 9-9)
In case of overseas direct investment, residents must report and report.
Violations may result in administrative dispositions such as fines for negligence or suspension of transactions, or criminal penalties such as imprisonment or fines, so be sure to be careful.
Obligation to notify in advance in case of overseas direct investment
For foreign direct investment and overseas real estate acquisition, you must visit a foreign exchange bank for consultation in advance, prepare the required documents, and report to the bank manager.
If you wish to change the previously reported information, you must notify the designated foreign exchange bank in advance.
Obligation to notify in advance for changes in report content
Investors must submit the specified report together with the attached documents to the post-management foreign exchange bank within the deadline.
3. Step-by-step performance obligations for foreign direct investment and overseas real estate acquisition
① Foreign direct investment and overseas real estate acquisition prior notification
② Remittance and investment
③ Acquisition report:
Overseas direct investment-within 6 months
Overseas real estate acquisition-within 3 months
④ Financial statements report:
Overseas Direct Investment-Within 5 months after the end of the annual accounting period
Overseas real estate-every 2 years
⑤ Occurrence of reason (stock transfer, liquidation, disposal)
Overseas Direct Investment-Immediate report of disposal and collection of funds
Overseas real estate-Report within 3 months after disposal
4. Foreign Direct Investment Report and Documents to be Submitted
① Common documents to be submitted
Foreign direct investment report, business plan
Investor confirmation document*
-Corporation: Copy of business registration card, tax payment certificate
-Individual business owner: Copy of business registration card, copy of resident registration, tax payment certificate
-Individual: Resident registration copy, tax payment certificate
② Additional documents to be submitted
Monetary loan contract: For loan investments with a repayment period of more than 1 year
Joint venture contract: In case of joint venture with foreign capital
In-kind investment statement: In case of in-kind investment
Other documents deemed necessary by the head of a foreign exchange bank
The content of the report must match the actual investment (as long as).
If the par value of the local corporation stock or equity that is to be acquired is different from the acquisition price, you may be required to submit an evaluation form (review) by a professional evaluation agency to confirm the adequacy of the difference.
Even if a local corporation that has already been established makes a capital increase (including increased investment, free increase, and in-kind investment), it must be reported to the foreign exchange bank in accordance with the new report.
5. Notification of changes to foreign direct investment related contents
① Documents to be submitted
Report on change of foreign direct investment details (including previous report)
Statement of reason for change of foreign direct investment
Subsidiary establishment contract and subsidiary business plan (if applicable)
Transfer agreement (Documents to be submitted for transfer between residents)
If there is any change in the content of the report, you must report it in advance.
※ Changes in the ownership ratio of local subsidiaries or the establishment of a subsidiary (grandchild) company, changes in investment amount, and liquidation are also subject to notification.
In the case of transfer of shares between residents, the transferor must report a change in content and the transferee must report a new foreign direct investment.
※ In the following cases, follow-up reporting is possible within 3 months.
-When the name of the investor, the representative, the location, the name of the local corporation, and the location are changed
-In cases where it is not appropriate to change after prior notification due to the merger or division of investors, urgent business circumstances, etc., and no additional amount is required.