Measures to ease foreign exchange transactions regulations
Detailed easing measures, i.e., firm and resolute abolition of restriction on the overseas investment, will follow. Besides, in order to facilitate overseas business activities by Korean individual investors and companies, the government will explore drastic relaxation measures to further deregulate the current legal framework stipulating foreign exchange transactions.
The backbones of the softening measures are as follows.
A full-scale liberalization of the acquisition of residential-purpose overseas properties on real demand
Current acquisition ceiling of US$1 million shall be abolished. The disposal obligation of any overseas properties within 3 years upon returning to Korea shall also be scrapped.
The amount applicable to the mandatory compliance burden of reporting to the National Tax Service (NTS) shall be upward adjusted from the current US$200,000 and over to US$ 300,000 and over.
Softening restriction on the outbound direct overseas investment (DOI) and expanding financial support for overseas investment
The investment ceiling over outbound DOI by individuals, currently being set at US$ 10 million, shall be completely removed.
Investment in large-scale overseas resource development projects shall be backed up by boosting the foreign exchange loan-linked currency swap scheme of the Bank of Korea (BOK) and expanding financial support by the Korea Eximbank.
Promoting indirect overseas investment
The current restriction concluding which products and types of overseas securities to be legitimately permitted for investment by individuals shall be abolished. Also, investment restriction on the overseas funds by local funds will be further eased.
Softening the obligation to collect the foreign credit in a drastic fashion
The current threshold amount for being exempted from such collection obligation is US$100,000 per transaction, and shall be further upward adjusted to US$500,000.
Compulsory reporting of overseas deposits to the NTS shall be also relaxed from the current US$10,000 per year to US$ 50,000 per year.
Deepening the Korean foreign exchange market, the exchange position ceiling shall be expanded to 30% of the bank’s previous-month-end total value of equity capital, from the previous 20%.
IMF assistance will be seek in devising measures to facilitate the deepening and furthering of the Korean foreign exchange market.
The government will pursue the afore-mentioned regulatory revisions in parallel with short-term market stabilization measures to boost foreign exchange transactions and market stabilization.
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2008년 10월 6일 16:30
