「Korean Investment Contract and Foreign Exchange Transaction Reporting – Legal Advice from a Lawyer Specializing in Foreign Corporate Investment」
Law Office InPyeong was retained by K, a startup that was offered investment by an overseas company, to review and advise on legal matters related to investment contracts and foreign exchange transaction reporting for non-residents investing in overseas companies.
Our law firm has in-depth experience and know-how in drafting and reviewing investment agreements and foreign exchange reports from the perspective of investors and recipients of investment, respectively. Based on this, we conduct a thorough and comprehensive legal review from the beginning of investment negotiations to the completion of the foreign exchange report.
In particular, in addition to reviewing contracts by Korean lawyers, our senior foreign lawyers who specialize in overseas law also review the validity of the contract and the client’s requirements, and successfully lead the contract and negotiation from investment.
■ Reporting Securities Acquisitions by Non-Residents – What Documents Are Required?
We often receive questions about whether a non-resident acquisition of equity interests in a domestic company must be reported under the Foreign Exchange Act. Except for the following exceptions, which do not require reporting, you must report according to the following.
In Korea, if a non-resident wants to acquire securities from a resident, it must be reported to the Bank of Korea. Exceptions to reporting to the Bank of Korea are (1) Exceptions to Reporting under the Foreign Exchange Transaction Regulations and (2) General Foreign Exchange Bank Reporting.
■ Required Documents
1. declaration form
2. Explanation of securities acquisition
3. Documents confirming the identity of the declarant and the counterparty
4. Draft securities acquisition agreement
5. POA with consular confirmation or apostille
6. Written pledge
7. other documents deemed necessary by the head of the reporting organization
* The required documents may vary depending on the case, so please be sure to consult a lawyer or related organization before submitting.
■ What are the exceptions to reporting foreign currency transactions?
If a non-resident acquires shares in a domestic corporation from a resident, it must be reported to the Foreign Exchange Bank only if the acquisition does not constitute a foreign investment as defined in the Foreign Investment Promotion Act.
In addition, there are exceptions to the requirement to report foreign exchange transactions, such as when a non-resident acquires securities from a resident by inheritance or bequest, or when a non-resident who is a Korean national acquires Korean won securities from a resident.
When it comes to overseas corporate investments, overseas contracts, and foreign currency transactions, it is important to have a senior foreign lawyer with extensive advisory experience review the contract and build an effective solution based on the client’s strategy.
Law Office InPyeong operates a consulting service specializing in foreign investment and foreign exchange transactions. Based on the expertise and capabilities of a mid-sized law firm, our lawyers, who have a wealth of experience and know-how in their respective fields, provide customized legal services ranging from advising on differentiated investment contracts to reporting foreign exchange transactions.
If you need a legal review of Korean investment contracts and foreign currency transactions, please contact us.
Law Office InPyeong