[Korean Venture Investment_Column] Overseas Subsidiary Conversion Flip (Flip), Prepare Like This

The most recent column by Veat Law Firm’s representative attorney, Choi Seong-ho, regarding overseas subsidiary conversion flips was featured in KB Venture Investment.

Startups or startup executives preparing to invest from companies looking to expand to the United States or receive investment from U.S. venture capital firms should definitely review Veat Law Firm’s overseas subsidiary conversion flip column by representative attorney Choi Seong-ho.

Image Source: KB Venture Investment

A flip, which involves quickly coordinating the positions of multiple shareholders and typically takes between 2 to 3 months even with the active cooperation of Korean law firms, Korean accounting firms, and U.S. law firms, is a complex undertaking that startups should carefully consider.

Furthermore, if a Korean entity has surpassed its break-even point, there is a risk of significant tax liabilities when existing Korean shareholders transfer stock to a U.S. subsidiary. It is advisable to determine whether a flip should be conducted before a Korean entity surpasses its break-even point.

Excerpt from the column.

Veat Law Firm’s Key Flip Cases

▶ A Company established a subsidiary in the U.S. and flipped it with A Company, creating A Company as the parent company and the U.S. subsidiary as a subsidiary.

▶ B Company newly established a corporation in the U.S. and flipped it with B Company, making the new corporation the parent company and B Company the subsidiary.

▶ C Company flipped its subsidiary in Singapore with C Company, making the Singapore subsidiary the parent company and C Company the Singapore subsidiary.

Veat Law Firm provides legal counsel to numerous venture capital firms (VCs) and startups. If you require legal review regarding overseas subsidiary conversion flips, please contact Veat Law Firm.

Thank you.
Veat Law Firm.