“Legal review for securities acquisition reports and other foreign exchange transaction types requiring reporting.”

Law firm Veat conducted legal review for A Company, a software development company, regarding whether it was subject to foreign exchange transaction reporting, upon receiving a commission.

Law firm Veat examined the types of foreign exchange transaction reports required when foreign corporations that have previously invested, according to the report on overseas direct investment, needed additional investment, based on the Enforcement Decree of the Foreign Exchange Transaction Act, and meticulously reviewed the transfer of ownership interests of overseas companies between Korean residents.

In accordance with Article 8(1)(3) of the Enforcement Decree of the Foreign Exchange Transaction Act, when acquiring additional shares or capital contributions of a foreign corporation that has previously invested, it must be reported as ‘Overseas Direct Investment Subject’ to a foreign exchange bank, and in accordance with Article 9-5 of the Foreign Exchange Transaction Regulations, a ‘Report on Overseas Direct Investment Transfer between Residents’ must be conducted at a foreign exchange bank.

Key Provisions on Overseas Direct Investment

Article 8(1) of the Enforcement Decree of the Foreign Exchange Transaction Act

It is an investment of at least 10% of the total shares or total capital issued by a foreign corporation established in accordance with foreign laws (including corporations under establishment, referred to as ‘foreign corporation’ hereinafter).

2. Article 9-5 of the Foreign Exchange Transaction Regulations

When a resident (excluding individuals or business operators who are in the process of immigration or seeking to make payments for acquiring permanent residency or other qualifications, ) intends to make an overseas direct investment (including expansion investment), it must be reported to one of the following officials of a foreign exchange bank as specified in item 1 of the following:

As mentioned above, foreign exchange transactions and stock acquisition reports involve complex procedures and various reporting obligations under different regulations. In particular, when acquiring shares or capital contributions abroad or transferring ownership interests of overseas companies among Koreans, it can be a major concern for many companies and individuals.

Since the required documents and reporting methods vary depending on each investment procedure and require detailed review, including exceptions to reporting, and whether it is a reporting matter to a foreign exchange bank, it is recommended to obtain assistance from a legal expert with extensive experience in the Foreign Exchange Transaction Act and stock acquisition procedures.

Veat Law Firm’s Foreign Exchange Transaction and Stock Acquisition Reporting Center

Law firm Veat possesses extensive experience in numerous foreign exchange transaction reports, overseas investment reports, and stock acquisition reports. Based on this experience, we provide one-stop services, including determining the type of reporting required for each client, preparing and submitting the report, and handling the reporting agency.

If you have any inquiries regarding stock acquisition reports, overseas direct investment reports, foreign investment reports, or the Foreign Exchange Transaction Act, please contact Veat Law Firm’s Overseas Investment Center, a leading expert in stock acquisition reports.

Thank you.

Veat Law Firm