Korea corporate bank accounts in 2024
Since 2003, Healy Consultants Group helps multi-national Clients open multi-currency corporate bank accounts in Korea for both local and overseas companies.
Without bank signatory travel, our Asia team will project manage the multi-currency corporate bank account opening process, including preparing a quality business plan for our Client’s business.
We recommend our multi-national Clients read this web page to avoid bank surprises later!
Korea banking problems and solutions
No Korea banking problem Solution 1.
Bank refuses to onboard a foreign company which does not have a physical office in Korea, including Korean customers and suppliers.
- Healy Consultants Group will open an international corporate bank account with a top tier bank outside Korea (e g in New York, Germany, Liechtenstein, Austria, Bulgaria, South Africa, Australia, London, South America or Dubai).
- Healy Consultants Group has a guaranteed corporate bank account approval policy.
Bank insists that the bank signatory, shareholders or directors travel to Korea for a one-hour bank interview.
- We will negotiate with the bank for a travel exemption.
- Local banks trust and welcome our multi-national Clients. A quality business plan is a big help.
- Our staff will meet our Client in Korea and accompany our Client to the bank interview.
- If our Client must travel to Korea for corporate bank account opening, Healy Consultants Group will refund our Client US$950.
Global banks continue to tighten corporate bank account opening procedures, and their internal compliance departments complete more thorough due diligence of Clients. Consequently, our Clients should expect Korea bank account approval to take a minimum of four weeks.
If our Client requires a bank account at short notice, we recommend an immediate Korean solution (Asia shelf company plus already-approved international corporate bank account).
The majority of Korean banks only provide telephone support during Korea business hours, in the Korean language. This is inconvenient and challenging for multi-national Clients in Europe or the USA.
Healy Consultants Group staff assist our multi-national Clients with bank communication, regardless of time zones.
Our Client will need to download a few softwares to access the online banking platforms of the Korean banks, and make transactions through them.
Healy Consultants Group will provide our Client with a step-by-step guide to download the required software and effectively navigate the e-banking portal.
The Korean banking sector
Healy Consultants’ Group PLC summary view:
- The Bank of Korea has a reputation for being a competent regulator, ensuring the stability of the banking and monetary system.
- We believe Korea is better placed than most Asian countries to recover from the economic shock imposed by the COVID-19 pandemic. For example: i) in the third quarter of 2020 exports grew at 15.6% quarter-on-quarter, the fastest rate since 1986 ii) although Korea’s unemployment rate surged to a 10-year high of 4.5% in May 2020, hurting consumer sentiment, by August 2020 it had fallen to 3.2%, reducing the likelihood of bad debts and the ability of households and businesses to repay debts.
- That said, significant risks to the economy and banking sector remain. These include i) in the first half of 2020, company bankruptcy filings were at a record high ii) Korean household debt hit 1.6 trillion won (US$1.4 billion), up 4.6% from a year earlier, at the end of March 2020 iii) local households’ ability to repay debt worsened due to a reduction in income due to COVID-19 iv) Korea’s interest rate is at a record low, impacting bank earnings from lending.
- In addition, Korean government debt is forecast to balloon to i) more than 1,000 trillion won (US$842.9 billion) by 2022 and ii) 1,327 trillion won by 2024. Debt was 660 trillion won in 2017. Debt-to-GDP is also projected to rise sharply to i) 46.7% in 2021 and ii) 50.9% in 2022. This will cause the country’s credit ratings to fall. Korea’s sovereign credit rating, as of October 2020, is i) Aa2 (Moody’s) ii) Aa2 (Standard & Poor’s) and iii) AA- (Fitch).
- The country’s foreign exchange reserves hit a record high in August 2020 of US$418.95 billion, due to a rise in revenue from foreign asset investments amid the weakening of the US dollar, that has buoyed the value of non-dollar assets.
- We believe the government’s steps to support households and small businesses are positive, and will protect Korean banks. For example, in September 2020, parliament approved a fourth supplementary budget totalling US$6.72 billion to help households and small businesses.
- Korean bank accounts are insured up to 50 million won (US$44,368) per depositor, including principal and designated interest. This gives confidence to depositors.
- Despite the 2020 health and economic crisis, Healy Consultants Group therefore has confidence that our Clients’ deposits in Korean banks are secure.
Key information on the Korea banking sector
- Korea imposes some currency controls. For example, funds transfers exceeding US$10,000 must be supported with relevant proof of origin of funds.
- The country is home to i) 52 commercial banks (including a) 8 nationwide banks b) 6 local banks and c) 38 branches of international banks) ii) 5 specialised banks and iii) 2 digital banks. The three government-owned banks are i) Korea Development Bank ii) Industrial Bank of Korea and iii) Korea Eximbank.
- Healy Consultants Group recommends our foreign Clients open a corporate bank account in Korea with a bank with which they are already an overseas Client. For example, Woori Bank operates branches on most continents, as well as branches across Korea. The bank also has four ‘foreigner friendly’ branches where English is spoken. Little English is spoken in most Korean bank branches.
- Of the international banks with branches in Korea, we recommend i) Standard Chartered and ii) Citibank. These international banks offer high levels of service, and banking in English.
- Korean banks offer services commonly offered elsewhere in the world. These include savings, deposits and checking accounts, online banking, currency exchange, foreign currency banking, wire transfers, ATM services, wealth management etc. Unfortunately, Korean bank regulations around online banking activation are complex.
- An estimated 60% of all purchases in Korea are made via mobile phone. The country’s transition to a cashless society is being accelerated by the COVID-19 pandemic. As well as local and international debit and credit cards, popular contactless payment methods include i) Cashbee ii) Culture Voucher iii) Egg Money iv) Happy Voucher v) OnCash vi) T-money vii) Kakao Pay and viii) PayCo.
- In 2020, Korean banks pay up to 1.45% interest on won currency fixed deposits.
- Digital banks are licensed to operate in Korea since 2020. These ‘virtual banks’ are an excellent alternative to conventional banks, with a similar range of services accessed via an app and lower account service fees.
- Most Korean banks do not charge an account opening fee. However, the account must be funded immediately after opening and our Client should ensure the account remains active to avoid closure. The minimum balance is US$10,000 and should be maintained monthly.
- As well as local currency accounts, Korean banks offer corporate bank accounts in currencies including US$, Japanese yen, euros, sterling, C$, Swiss franc, HK$, A$, NZ$ and S$.
- On average, Korean banks take four weeks to issue corporate bank account numbers and e-banking access.
- Securing finance for a start up in Korea is challenging. The start-up must have i) a sound business plan, including a well-researched feasibility study ii) sufficient collateral assets iii) audited background checks of key management officers and iv) at least three years of audited financial statements.
- Korea is a signatory to the Common Reporting Standard (CRS), a global initiative to clamp down on tax evasion. As a result, Korean banks share information on bank accounts and account holders with the tax authorities where the company/individual is tax-resident.
- Under the Foreign Account Tax Compliance Act (FATCA), since 2015 Korean banks report information on US account holders to the US Inland Revenue Service (IRS).
- It is important that our Clients are aware of their corporate and legal obligations in Korea and that they timely fulfil the same. Let us know if you require Healy Consultants Group’s assistance to timely and efficiently complete your legal and corporate responsibilities.
- Korean banks usually approve the appointment of bank signatories without travel. This can be done remotely by providing certified passport copies and proof of addresses to the bank.
- Securing multi-currency corporate bank accounts for a local company in Korea is straightforward, because:
- Korean banks usually do not require a face-to-face meeting with the bank signatories or directors;
- Korean banks also keep KYC document requirements to their minimum. Usually, a simple legalised copy of the passport and a proof of address of each shareholder, director and bank signatory is sufficient;
- Korean banks are predictable. If the front desk officer confirms his bank can board a company, there is usually little risk that the Compliance Department will thereafter decline the application;
- Because of all of the above, it only takes four weeks to secure corporate bank account numbers in Korea, from the submission of a complete quality application;
- While corporate bank account opening in Korea is easy, activating online banking is not. The same requires multiple passwords and login levels, as well as the installation of software which is unfortunately either available in Korean, or poorly translated into English.
- Korea is no longer a popular jurisdiction for cryptocurrency setup, mainly because local banks now systematically decline such businesses due to multiple frauds and scandals with cryptocurrencies and ICOs in 2019 and 2020.
- Unlike many countries, Korea allows for most government and bank forms to be submitted without a director’s signature. Instead, a simple stamp with the company seal is sufficient for them to be valid. Consequently, we always recommend our Clients store the company seal in a safe, to prevent any unauthorised use of this sensitive item;
- Korean banks are uncomfortable with onboarding entities registered outside of Korea, so securing Korean corporate bank account numbers requires a local branch or company.
Foreign exchange obligations in Korea
- While there are no restrictions on the transfer of capital, profits, dividends, royalties or interest into, or from Korea, certain industries, such as cryptocurrency transactions, have limitations on capital inflows.
Healy Consultants Group fees to help open a Korea corporate bank account
Healy Consultants Group guarantees Korea company bank account approval. Our fees for different banking services include:
Korea banking task Our Client travels US$ Korea bank account for a foreign company Yes 4,950 Korea bank account for a Korea company Yes 4,950 Korea personal bank account Yes 4,950 Crypto currency bank account opening services Yes 8,950
Our multi-currency corporate bank account opening fees cover the following:
- Creating a quality business plan for Korean banks, explaining the purpose of the business and future banking transactions.
- Securing welcome emails from multiple Korean banks, inviting our Client to submit a multi-currency corporate bank account application.
- Healy Consultants Group’s Banking Team completing, on our Client’s behalf, the multi-currency corporate bank account application forms (in Korean) and collating Know Your Customer (KYC) due diligence documents. Our Client’s due diligence documents need to be legalised at the Public Notary, or from Korean embassy, in their country of residence.
- Following successful completion of the above, the bank officer submitting a complete potential customer file to the bank Legal and Compliance Department. (Note that the bank In-house Legal and Compliance Department may revert multiple times for additional documentation and information from i) each bank signatory / director / UBOs of the companies as well as ii) our Client’s business and transactions).
- If a bank declines to board our Client’s business, Healy Consultants Group immediately informing our Client and actioning back-up banking solutions.
- In an average of four weeks following application submission, Healy Consultants Group securing multiple multi-currency corporate bank account numbers for our Client’s Korean company.
- Thereafter, Healy Consultants Group, or the banks, couriering mail and e-banking tokens to the bank signatory, who is expected to activate the internet bank account, with Healy Consultants Group’s assistance if needed.
- After corporate bank account numbers are secured and, if required, Healy Consultants Group assisting our Client to appoint more new shareholders and directors. However, the banks will usually only approve them as bank signatory after a face-to-face meeting and the review and approval of a bank signatory application.
Considerations when opening a bank account in Korea
- It is possible for both locally incorporated and foreign (i e non-Korean) companies to open a corporate bank account in Korea. However, it is increasingly difficult for foreign companies without a permanent establishment (i e physical office premises with lease agreement) in Korea to open a local account, unless they have existing Korean customers or suppliers.
- At the time of company incorporation, we recommend keeping the corporate structure simple by appointing our Client’s preferred individual shareholder(s) and director(s) and bank signatories. No corporate entity, nominee, trust, or holding company incorporated in a tax neutral jurisdiction.
- During the Korea corporate bank account opening process, it is common for each bank’s in-house Legal and Compliance Department to request additional due diligence documents from potential customers. These include i) regulatory licences ii) proof of business globally and in home country including evidence of contracts, invoices and agreements with local Clients and iii) additional KYC information on our Client’s business and place of residency, including nature and volume of transactions. Our Clients should expect the bank account approval period to take up to three months.
- Depending on our Client’s business and nationality, there is an 80% probability Korean banks will request a bank signatory to travel for a one-hour bank interview as part of bank AML/CFT obligations. We will try our best to negotiate with the bank for a travel exemption. Unfortunately, even if our Client travels to Korea to meet the bank, there is no guarantee that the bank account will be opened.
- If our Client must travel to Korea for corporate bank account opening, Healy Consultants Group will refund our Client US$950.
- If our Client is not comfortable with only a Korea corporate bank account, Healy Consultants Group can open an international corporate bank account outside Korea. Examples include New York, Germany, Liechtenstein, Austria, Bulgaria, South Africa, Australia, London, South America or Dubai. All banks will be top-tier banks in these countries, with excellent internet banking.
Documents required for Korea corporate bank account opening
Documents required to open a Korea corporate bank account include i) valid passport ii) proof of address and iii) company registration documents. For more information on corporate bank account opening procedures, visit this page.
Korea multi-currency corporate bank account opening is easy if you know how. Contact Healy Consultants Group if your Firm needs assistance navigating through the different banking solutions.