Académique Documents
Professionnel Documents
Culture Documents
2 Regulatory environment
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FDI companies' FAQs to Bank
2. Liquidity Management
Inter-company loan ( non-resident <=> resident )
Domestic cash pooling
Cross-border cash pooling – ‘ Consolidated Management of Funds’ under FETR ( Foreign Exchange
Transaction Regulation)
3. Repatriation : how to pull cash surplus out of Korea is the most interesting topic now!
Dividend
Capital Decrease
Domestic entity’s intercompany loan to overseas entity : prior approval from Bank of Korea
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FDI companies' FAQs to Bank
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FDI companies' FAQs to Bank
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Regulatory environment: Authorities and Regulations
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Cash Management-related Regulations
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Cash Management-related Regulations
Oversea deposit over 50,000 USD per entity is allowed subject to prior notification (i.e. approval) to
BOK with the following documents:
Notification (BOK format) and Explanation (free format) of oversea deposit
Copy of registration certificate of foreign-capital invested company (sealed)
Deposit application form with tenor and amount filled in
Financial Statements to prove origin of fund
Other documents which may requested by Bank of Korea
If deposit or credit balance is over 500,000 USD at the end of year , account balance report should be
reported by the end of January in following year
If previous year’s volume of import and export exceeds 5 mill USD, oversea deposit over 50,000 USD
per entity is allowed through notification to FX designated bank
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9
Loan Structure Overview
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Inter-Company Loan Regulations
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Inter-Company Loan Regulations
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Inter-Company Loan Regulations
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Inter-Company Loan Regulations
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Inter-Company Loan Regulations
Inter-Company Loan
Consolidated Management of Funds
by Non-Resident to Resident
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KRW FX Related Regulation - Derivatives under CMA
■ Under Capital Markets Act (“CMA”) commenced in Feb 09, corporate client is categorized into either
Professional Investor (PI) or General Investor (GI) when performing hedge trade (FX Forward / Swap / Option,
IRS, CRS, etc)
2. Product Summary Form : To be provided by the Bank / To be signed & returned by client
3. Underlying Hedge Document : Payment Invoice, Export/Import Balance, Financials, Loan Contract, etc
Requirements for PI
1. GI documents are not required : However, client needs to register with Korea Financial Investment
Association (KOFIA) and obtain a registration number
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KRW FX Related Regulation - Derivatives under CMA
- This regulation applies to all corporate clients performing only FX hedge – Applicable to PI
- This new regulation pertains only to KRW cross currencies : USDKRW, EURKRW, JPYKRW etc -Applicable to PI
(Not applicable to G10 currency pairs vs For GI, applicable to G10 as well)
- Clients can only hedge up to 100% of total hedge exposure – Applicable to GI, PI
Document Requirements
3. Underlying Hedge Document : once a quarter (GI) / year (PI) -most recent financial or export/import data
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Disclaimer
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