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Permalink Reply by Steven S. Bammel on March 27, 2013 at 4:21pm

Thanks for the extra info, Anne!

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Permalink Reply by Chris Lott on March 27, 2013 at 5:22pm

Anne:

That's an interesting article you linked to.  From my experience, converting a $50K/D8 into a corporation, they required the FULL complete re-investiment of $100K, not just the difference.  I was in a slightly different boat, that is, I had a D8 partnership, not a sole-proprietorship, and therefore I didn't HAVE to change the company structure.  That might be part of the reason they were stricter on me.

That brings up something the article doesn't seem to mention, nor did any other resources I could find online.  They seem to be ignoring the D8 partnerships.  From what I can piece together, one other option that a D8 sole-proprietor has would be to take on a partner and become a partnership.  What I'm not clear is whether that would trigger immigration requiring the person to re-invest, since they could argue he is now making a completely new company (rather than just adding a partner to an existing one).  If it were me, I would be wary of that "solution" - if you extend the "logic" which resulted in raising the minimum FDI investment and also banning sole-proprietorships, it only seems to follow that banning partnerships will soon follow.  That's just my guess, however, not even a rumor.

Finally, I'm not sure why that article even mentions the holders F-series visas.  As I understand it, those people don't need any kind of visa endorsement to form and/or work in any company.  The only possible issue might be if their company needs he FDI certification for some other, non-visa, reason (i've heard there are a few instances where this is needed).  Shucks, I've known F-series foreigners who "have" a company that was entirely in their spouses name - officially during their time in Korea, they didn't earn one single won - all the profits were legally earned by the spouse.  That might be one way to avoid any new F-series visa work/company ownership prohibitions that this article hints at.

 

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Permalink Reply by Anne Ladouceur on March 27, 2013 at 6:47pm

Re the information page on K4E - it was posted back in September or October and was based on the government memo, so likely that included the F-visa references. While we can appreciate the problem the government is attempting to address, this may not be the most effective way of doing so. Some of the unintended consequences may be worse from their perspective than the current abuse they want to fix.

As for partnerships, to my knowledge these are usually (but not always) treated differently from foreign solely owned companies. Would be interested in hearing from others about their experiences.

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Permalink Reply by Chris Lott on March 27, 2013 at 9:08pm

That agrees with what we were told.  Had we wanted to, we were told that we could have continued our D8 partnership without any adjustments, reinvestment or anything (but we needed to change to a corporation for other reasons).  I just wondered why the immigration notice, which alerted D8 sole proprietors had to change, didn't also mention that making a D8 partnership was a third solution - unless for some unknown reason it is now impossible.

As I understand it, the rule banning D8 sole proprietors was kind of a separate rule from the one which is going to raise the minimum investment amount.  They may be connected in concept at the high levels of policy makers, but I thought they were two different (new) rules.

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Permalink Reply by Anne Ladouceur on March 27, 2013 at 9:24pm

Banning D8 sole proprietorships is one thing - charging a higher fee for non-Koreans to incorporate an existing business is another. Expect a lot more people who want to open businesses will be looking at marriage as the best 'partnership' option...one of those unintended consequences. Possible that as they evaluate the effects of the policy, they may discover that there are other, more effective, ways of solving the 'fake' business problem.

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Permalink Reply by Chris Lott on March 27, 2013 at 10:14pm

To be clear, they didn't charge us any extra to incorporate our existing company. Rather, the extra was in order to maintain our company's FDI certificate, and hence maintain my D8 visa.  That's a subtle distinction, but yeah, your point is well taken.

Even more subtle, there is a very slight but real difference between foreign investment for FDI certificate purposes and for visa purposes. These are almost always the same thing, but can be separate. For example, during my renewal process, for a few months it appeared we might get an FDI certificate from KOTRA without reinvesting any more money. But immigration said that if that happened, they would still likely deny the visa. I've heard that in theory the opposite could happen, a company could invest enough to satisfy immigration but not KOTRA, but stay spect that very rarely happens. 

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Permalink Reply by Ahmad Mian Sagheer on April 26, 2013 at 10:50pm

Dear friends

i have a news  about minimum capital for D-8 visa from new paper The Korea Times

please read check comment and share.......

 

thanx

 

 

2013-04-15 19:27
Park addresses foreign businesses' grievances
President Park Geun-hye smiles at National Security Office chief Kim Jang-soo (unseen in the photo) at a meeting with senior secretaries in Cheong Wa
Dae, Monday. / Yonhap

By Cho Mu-hyun

President Park Geun-hye is getting friendlier with foreign businesses operating here.

In the latest case, her administration has scrapped plans... to increase the minimal capital requirement for foreigners looking to start business here from 100 million won to 300 million won.

The move came after Park met with foreign business leaders Thursday and listened to their complaints about the business environment here. The Ministry of Trade, Industry and Energy (MOTIE) recently planned to increase the minimal capital requirement, but decided to retain the current one after the meeting.

The ministry is currently putting the last touches to revisions to the law on foreign investment, something it expects to finish this month. It aims to put it into effect starting in June after the revision is approved by the National Assembly.

Overseas businesspeople, who’ve voiced strong opposition to the increase, are showing slight optimism to “the start of change.”
James Rooney, CEO of Market Force, who has been doing business in Korea since 1996, personally attended the meeting at Cheong Wa Dae and said Park’s stance was “very constructive.”

“Let’s give credit where it is due. I think the style she has demonstrated during the meeting was positive, much similar to previous President Kim Dae-jung,” said Rooney. “The conversations were very constructive. All sides believed there were being listened to.”

According to Rooney, the past two administrations — accounting for a decade — lost the way for dialogue with not just the foreign community, but also people in general. He said Park’s gesture was the start of change.

“The problem with the previous administrations was that they didn’t engage properly both emotionally and logically in economic development,” said the CEO. “Foreigners meeting with Park felt they were on a level playing field to make an emotional connection with the new administration.”

You’re just shooting yourself in the foot if the new capital regulation had been passed,” said Bryan Hopkins, a professor at Sejong University business school.

The professor agreed with Rooney that the regulation would have had a bad effect on small- to mid-sized companies, businesses the new government has vowed to help.

“When a foreigner sets up a business elsewhere the first thing they look at is cost. They can go to Singapore; they can go to Myanmar and other Southeast Asian countries. The new regulation would have made them choose alternative markets that are friendlier towards starting business,” he said.

A ministry official directly involved in the matter defended the now discarded initiative.

“The ministry believed that considering the size of the Korean economy, 300 million won was the requisite amount businesses needed to function normally and contribute to the market,” he said.

The official said the government’s own survey drew the conclusion that most foreign businesspeople were self-employed, and moved out of the market as soon as they earned profits.

“Hong Kong is bigger than Korea. The U.S. is bigger than Korea. In any of these countries, they don’t have a minimal requirement,” retorted Rooney. “When an entrepreneur comes in, he will start small, and grow large and start hiring and open other business, which will ultimately help the Korean economy.”

Rooney stressed the need for Korea to engage more with the outside world to do better, and to do that the best way would be to connect with foreigners already here.
impale@koreatimes.co.kr,

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Permalink Reply by Steven S. Bammel on May 2, 2013 at 8:23pm

Thanks for this. I saw another email on this a couple weeks ago too, so it appears that the W300 million requirement has not been implemented. I haven't seen anything directly though; still waiting for something that would feel more official...

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