[Consulting] Performing Foreign Exchange Transaction Reporting in Connection with Overseas Corporate Investment

Law firm Veat performs foreign exchange transaction reporting necessary in the process where domestic venture capital firms invest in overseas startups.

Domestic venture capital (VC) A Corp. requested Law firm Veat to handle foreign exchange transaction reporting business in the process of subscribing to new shares and converting existing SAFE investments in overseas startups. Law firm Veat utilized its diverse experience in foreign exchange transaction reporting to quickly perform foreign exchange transaction reporting to the Bank of Korea for VC A Corp. in the process of subscribing to new shares and converting existing SAFE investments in overseas startups, resulting in satisfactory feedback from the client.

Simple Agreement for Future Equity (SAFE) investment agreements, which refers to the acquisition of conditional equity, were introduced in August 2020 under the “Special Act on Promotion of Venture Companies” (Venture Companies Act). Due to the fact that the valuation stage of investment contracts takes a lot of time because the business models of early-stage companies have not been verified, many VCs and companies are utilizing SAFE investment agreements that allow them to skip the valuation stage.

However, when conducting investment agreements, such as SAFE investments, for overseas startups and companies, it is necessary to check whether they are subject to the “Foreign Exchange Transactions Act” and whether there is a reporting obligation under the “Foreign Exchange Transactions Act” before transferring investment funds overseas.

Law firm Veat provides assistance with not only advice on investment itself but also with all-around work, including reporting procedures necessary in the investment process, based on its diverse experience in investment legal advisory. If you need legal advisory related to the Foreign Exchange Transactions Act, such as overseas investment reporting and securities acquisition reporting, or foreign exchange transaction reporting, please feel free to contact Law firm Veat at any time.

Thank you. Law firm Veat.