Foreign Direct Investment Follow-Up Management - BusinesStaratup in South Korea

When a foreign investor or a foreign-invested company has completed payment of object of investment or acquired existing stocks, etc., he/she/it shall take procedures to register a foreign-invested company to the president of KOTRA or the head of a foreign exchange bank as prescribed by Acts and statutes of the Republic of Korea. The registration may be cancelled for certain reasons.
1. Alteration Registration of the Foreign-Invested Company
A foreign investor (an agent) or a foreign-invested company shall file an alteration registration of the foreign-invested company at a delegated institution within 30 days from the occurrence of any of the following cases.
bulletWhere he/she/it acquires stocks by mergers, free issue of new shares etc.
bulletWhere shares or investment ratio changes due to stock transfer or capital reduction of a foreign investor
bulletWhere shares or investment ratio of a foreign investor changes due to capital increase by a national of the Republic of Korea
bulletWhere trade name or title of a foreign-invested company or the nationality of a foreign investor changes
bulletWhere reported details such as foreign investment amount, foreign investment ratio, or the address of a foreign-invested company changes
blue bullet Required Documents 
bulletApplication form of a foreign-invested company registration (the existing registration certificate of a foreign-invested company shall be returned)
bulletCopy of the certificate of incorporation of a foreign-invested company (matters concerning cancellation shall be included)
bulletCopy of foreign exchange purchase certificate or foreign currency deposit certificate;
bulletShareholder's list (corporate seal, certified copy of the original) or documents certifying that payment of stocks is transferred
blue bullet Required Documents 
Additional documents required when necessary
bulletDocuments certifying object of investment
bulletCopy of documents certifying that the transfer of assets has been completed (where a foreign investor makes an investment in kind with capital goods)
bulletCopy of an investigation report by an inspector or a written statement by an appraiser, in accordance with the Commercial Act (where a foreign investor makes an investment in stocks or domestic real estate)
bulletOther documents pertaining to acquisition of stocks and documents certifying changes
bulletLetter of attorney where an agent makes the report
2. Report of Transfer of Stocks and Capital Reduction
A foreign investor (or an agent) shall make a report on a transfer of stocks, etc. within 30 days from the day when the relevant transfer contract is concluded; and capital reduction within 30 days from the day when the peremptory notice to creditors expires to a delegated agency. In cases where the foreign investor transfers stocks, etc. to a foreigner, the transferee is not required to report the acquisition of stocks. (The foreign investor shall attach the certificate of the nationality of the transferee, when he/she reports the transfer of stocks.)
blue bullet Required Documents 
bulletTwo copies of the report form of transfer of stocks, shares, etc. or capital reduction
bulletCopy of documents certifying transfer of stocks or capital reduction such as transfer contract and a certified copy of capital reduction change registration
bulletLetter of attorney where an agent makes the report
3. Report of Disposal of Capital Goods
Where a foreign investor or a foreign-invested company intends to transfer or lend capital goods which he/she/it introduced into Korea with their customs duties, etc. exempted or use them for purposes other than those already reported after five years from the day of receipt of the import declaration, he/she/it shall report such fact in advance to a delegated agency.
blue bullet Required Documents 
bullet Two copies of the report form of disposal of capital goods
4. A Foreign-Invested Company's Additional Business Operation or Acquisition of Another Domestic Company's Stocks
A foreign-invested company shall not operate an additional business beyond the allowed limit in business categories where foreign investment is restricted. However, such foreign investment is allowed where the foreign investment ratio is less than 10/100.
Though a foreign-invested company shall not acquire stocks of another domestic company, which conducts business in which foreign investment is restricted, beyond the allowed limit, the acquisition is exceptionally allowed in the following cases:
bullet Where a company, the foreign investment ratio of which is less than 50/100, and the largest shareholder of which is not a foreigner, acquires stocks of a domestic company
bullet Where a foreign-invested company engaging in financial or insurance business, all or part of business activities of which consists of acquisition of stocks, etc. of other companies, acquires stocks, etc. of other companies under other Acts and subordinate statutes
bullet Where not more than 10/100 of the total number of the stocks issued by, or the total equity investment of, a domestic company is acquired
5. Cancellation of Foreign-Invested Company Registration
A foreign investor shall apply for cancellation of the registration of a foreign-invested company, where the foreign investor has transferred all of the stocks, etc. held by himself to a national of the Republic of Korea of a Korean corporation, or has ceased to hold any of the stocks, etc. previously held by himself due to capital reduction, etc. of the foreign-invested company concerned.
A foreign-invested company or a foreign investor may file an application for cancellation to a delegated agency, and shall return the registration certificate of foreign-invested company to the delegated agency.
Where a foreign investor or any foreign-invested company falls under any of the subparagraphs, the Minister of Trade, Industry and Energy may revoke the permission or cancel the registration thereof:
bulletWhere a registered foreign-invested company has closed its business or has not conducted its business activities for two consecutive years or more
bulletWhere a registered foreign-invested company or a foreign investor who was granted permission to acquire existing stocks, etc. of a company in the defense industry has not complied with a correction order of the Minister of Trade, Industry and Energy or has not carried out other necessary measures
bulletWhere there are reasons for the dissolution of a registered foreign-invested company
bulletWhere a foreign investor has applied for the cancellation of registration under conditions as prescribed by Presidential Decree
bulletWhere he/she/it has transferred or lent the registration certificate of a foreign-invested company to another person
bulletWhere he/she/it has effected the registration of a foreign-invested company in disguise of the payment of the object of investment
blue bullet Required Documents 
bulletTwo copies of the application form of the cancellation of the registration of a foreign invested company
bulletOne copy of documents certifying the cancellation of registration (certified copy of liquidation, certificate of business closure, etc.)
bulletThe original copy of the registration certificate of a foreign-invested company


<Original Source : http://www.investkorea.org/ikwork/iko/eng/cont/contents.jsp?code=102040106>

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