Banking and Investing in Korea

You can be assured that you will benefit from various financial products and services including deposit, fund, and insurance through varied financial institutions in Korea. However, each and every financial transaction is subject to relatively strict local regulations so certain transactions by foreigners may be restricted in some cases. Since required documents and transaction limit can vary especially in case of foreign exchange transaction, advance notice of the applied regulations is advisable.

How Can Premier Help?

What You Need to Know

If you are a HSBC Premier customer, contact our International Banking Centre and we will help you take care of your banking as convenient and smooth as possible by helping you open a local bank account as well as providing financial management service meeting your needs. Contact our International Banking Centre on (822) 2004 0123 or Premier Call Centre on (800) 1577 3003 so that we can provide further assistance.

The following are some key local regulations you need to be aware of for banking in Korea.

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You should be well informed about market situation, funds, investment methods, local regulations and taxation if you plan to invest in funds in Korea.
Especially there is nationality limitation with buying fund products.

Visit HSBC for further information such as taxation on the interest income from fund investment. The above guide has been prepared based on Korean regulations valid as at end-March 2007. Regulations may vary in the country you intend to invest, so double-checking is essential.

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Real Name Verification Act

Real name verification act, which prescribed the verification of the person involved for every financial transaction, came into effect in 1993 and it applies to both Korean citizens and foreigners. You will need documentary evidence provided by the law for banking or any other financial transaction in the place of some other person.

Foreign Exchange Regulation

Foreign exchange regulation limits the foreign exchange transaction of foreign tourists, foreign residents and non-residents when:

- Buying KRW, you can buy the currency within the amount of foreign currency you brought into Korea. If you are foreign non-resident staying temporarily in Korea, your buying of KRW is limited to ten thousand US dollars.

- Selling KRW, you can sell the currency within the foreign currency you sold or to the amount you made in Korea. If record about your purchase of KRW exists, you can buy foreign currency equivalent up to ten thousand US dollars for travel expenses. Bring your passport if this is the case. The same regulation applies to overseas remittance.

15.4% of local withholding income tax will be imposed on foreign resident for the interest income from every financial transaction. Preferential tax rate is not applicable.

The taxation rate of your home country is applied to withhold financial income tax if you are a foreign non-resident.

The same regulations are applied to investment products such as mutual funds and unit trusts if interest income occurs.

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