Hello, this is Attorney Kyusung Lee from WeOn Law.

There are approximately 18 million overseas Chinese residing around the world. More than 90% of them are concentrated in Southeast Asia, including Singapore, Hong Kong, the Philippines, and Malaysia. About 50,000 overseas Chinese with foreign nationality reside in Korea. Since the 1990s, regulations on overseas Chinese have been relaxed, and their numbers have been steadily increasing.

Most overseas Chinese have ventured into sectors such as distribution and finance, wielding considerable influence. So, can overseas Chinese and ethnic Koreans in Korea, who hold foreign nationality, establish a foreign investment corporation by investing a certain amount of capital?

Q. Can overseas Chinese and ethnic Koreans in Korea establish a foreign investment corporation?

A. The short answer is yes.

According to Article 2, Paragraph 1, Item 1 of the Foreign Investment Promotion Act, "foreigner" refers to individuals who hold foreign nationality, corporations established under foreign laws, and international economic cooperation organizations specified by Presidential Decree.

In other words, an individual with foreign nationality, whether overseas Chinese or an ethnic Korean, qualifies as a foreigner under the Foreign Investment Promotion Act. Therefore, even if born in Korea, they can establish a foreign investment corporation if they meet the relevant conditions.

However, to establish a foreign investment corporation, overseas Chinese or ethnic Koreans must comply with the standards for foreign direct investment set forth in the Foreign Investment Promotion Act.

✅ All investment funds must not be sourced from domestic funds,

✅ but must be remitted from abroad in foreign currency.

In this case, overseas Chinese do not need to obtain an investment visa and are not obligated to provide documents proving the source of funds. The key point is to remember that the funds must come from abroad in foreign currency.

Additionally, when establishing a foreign investment corporation, you must meet the criteria of investing at least 100 million won and holding at least a 10% stake. There are no exceptions just because someone is overseas Chinese, so it is crucial to understand these requirements thoroughly.

Q. Are there benefits for overseas Chinese in Korea when establishing a foreign investment corporation?

A. Yes, there are.

Once registered as a foreign investment enterprise, you can regularly receive dividends and remit profits abroad. This applies equally to both overseas Chinese and ethnic Koreans.

The process and documentation are not overly complicated. In fact, if you do not register as a foreign investment enterprise, you may face cumbersome procedures and might need to resort to unconventional methods to remit funds. Registering as a foreign investment enterprise simplifies the process and reduces subsequent hassles.

Besides the above advantages, there are also various tax benefits and other incentives.

Therefore, for overseas Chinese and ethnic Koreans who wish to operate businesses long-term in Korea, it is advisable to establish a foreign investment corporation legally.

However, even for overseas Chinese who have lived in Korea for a long time, preparing all these procedures alone can be challenging. Given the necessary documentation and procedures, seeking assistance from a lawyer experienced in this field can be a solution.

Many have faced difficulties trying to handle this process alone, so it is strongly recommended to obtain professional assistance to resolve any issues.

Attorney Kyusung Lee from WeOn Law provides a one-stop service for all procedures from establishing foreign investment corporations to applying for investment visas.

With extensive experience in establishing foreign investment corporations and handling international matters, you can trust in their services. They also address potential risks that may arise in the future.

If you have any questions related to this, feel free to contact us.

Contact 

이규성 변호사 Kyusung Lee

(010-9023-5665, kslee@weonlaw.co.kr)