Report when acquiring overseas real estate with the funds for studying abroad

# Mr. A, who does business abroad, was imposed a fine from the Financial Supervisory Service for omission of reporting foreign direct investment after remittance of $30,000 to a local subsidiary in Vietnam.

Mr. #B was fined for spending 200,000 dollars remitted to his child studying abroad in Canada to buy real estate in Canada.

[사진=아주경제 DB]


Unlike general capital transactions, where reporting is exempted for both A and B, if the annual transaction amount is less than 50,000 dollars, foreign direct investment has been struck by a regulation that requires a report in front of the head of a foreign exchange bank even if only one dollar is invested.

The Financial Supervisory Service announced on the 25th that it has imposed administrative sanctions such as fines and warnings on 871 cases as a result of the inspection of 923 cases of violating foreign exchange transactions last year. The remaining 52 cases were notified to the prosecution.

By type, foreign direct investment was the largest with 51.8% (478 cases) of the total. This was followed by 13.6% (126 cases) of monetary loans, 8.9% (82 cases) of real estate investment, and 4.9% (45 cases) of securities trading. By obligatory matters, 55.8% of the total was violated for new reporting. This was followed by report on change (26.1%), report (14.6%), compliance with payment procedures, and others (3.5%).

[자료=금융감독원]


By transaction party, there were 515 cases for companies and 408 cases for individuals. As for the level of sanctions, warnings and fines were 436 and 435, respectively.

The Financial Supervisory Service distributed notes on reporting that individuals and companies were not aware of their reporting and reporting obligations under the Foreign Exchange Transactions Act.

First of all, under the current Foreign Exchange Transaction Act, individuals and companies (parties of foreign exchange transactions) must report to the head of the foreign exchange bank, the governor of the Bank of Korea, or the Minister of Strategy and Finance in advance when making capital transactions. Foreign exchange capital transactions that fall under this category include foreign direct investment, overseas real estate acquisition, monetary loan, securities acquisition, overseas deposit, and gift.

In the case of foreign direct investment and overseas real estate transactions, there is a reporting obligation for each transaction stage, such as acquisition and disposal, even after the initial report. In the case of foreign direct investment, financial reports, securities acquisition reports, annual business performance reports, and liquidation reports are required. In addition to the real estate acquisition report, overseas real estate must comply with the holding status report and disposal report every two years.

When making capital transactions through a bank, the purpose and details of the transaction must be informed in detail, and the bank must provide accurate information on the obligations to report and report under the Foreign Exchange Transactions Act. Particularly, in the case of in-kind investment and change of contract details, donation, and offset, if the transaction does not go through the bank without moving funds due to the nature of the transaction, it is necessary to separately inquire about the obligations to report and report to the bank where you usually do business.

An official from the Financial Supervisory Service said, “The bank will strengthen its foreign exchange handling business and guidance to customers, such as strengthening its own training for foreign exchange managers at each branch to prevent illegal acts of foreign exchange transaction customers.” “We plan to provide educational activities such as briefing sessions on foreign exchange transaction regulations for individuals and corporate employees who make foreign exchange transactions, by notifying the contents of related laws and financial consumers,” he said.

.Source